Libertarian Paternalism Is Not an (Ethical) Oxymoron

by plantain1998 on February 9, 2017 - 2:33pm

In 2003, economist Richard H. Thaler and lawyer Cass R. Sunstein co-wrote a seminal paper called Libertarian Paternalism Is Not an Oxymoron. It was this paper that led to the creation of the very first Behavioural Insights Team in the United Kingdom, or what they would later call the ‘nudge unit’. This team utilizes behavioural science to maximize public programs cost-efficiency and enrolment, and hope to help people make better and healthier choices. An example of this would be in taking advantage of social norms to get people to pay their taxes. By adding one line on the usual notice letter, reminding the reader that most people paid their taxes on time, they were able to increase payment rates by 15% (Benedictus).

This should be good news: changing a line in a letter already being sent out is not particularly costly and it has proven to have profitable returns. However, the real cost may very well be that these ‘tricks’ are covert, meaning they are done without the knowledge or the consent of the population. In this sense, a moral dilemma emerges, in which the benefits, as they have been studied up to now, do not outweigh the cost.


Firstly, from a deontological perspective, nudge units should not even be worth a consideration. While the ‘libertarian’ aspect of nudges doesn’t restrict the number and variety of choices left to the consumer, it still violates an important moral maxim: personal dignity. According to Kant, autonomy (or dignity) of a person should secure them from being used as a “means to an end” (White 5). This is broken by the ‘paternalistic’ aspect of nudges, which utilize people’s heuristics and biases to influence their behaviour towards a prearranged ‘good’ behaviour. First, subject’s interests are being replaced by the artificial interests determined by paternalistic researchers, which may or may not coincide with each other. In this sense, they are effectively interfering with the agent’s decision-making, and excluding them from the process overall (White 5). Second, agents all play a part in the ‘end’ decided by the researchers, that is the predetermined ‘good’ behaviour (for example paying your taxes on time). While this end may be beneficial to society as a whole, it should not come with the cost of the personal dignity of the agent.


Secondly, from the teleological perspective, there is an initial issue with ‘paternalism’. For John Stuart Mill, paternalism is wrong because he argues that agents are typically in the best position to know what is good for them (Kumar 3). While this should demonstrate a clear issue for utilitarians and nudges, studies have shown that people tend to agree that they should be eating healthier or saving more, which is in fact what behavioural scientists are trying to encourage. In this sense, the interest of the agent would align with the interests imposed by the paternalistic researcher. From a traditional teleological point of view, there are no clear issues with libertarian paternalism. In fact, it should be encouraged since it significantly improves happiness (meaning health and wealth) of a great number of individuals, but also of society as a whole since it increases the cost-effectiveness of public programs. 


While results from these programs to date have been wholly positive, the deontological perspective offers the most sound moral analysis of the application of behavioural science in public policy. ‘Nudging’ people towards smarter and healthier choices is not a novel idea, in fact it has been employed by the advertising industry for decades, and they have been morally criticized for doing so (Kumar 5). Furthermore, by focusing only on the outcome of the action, we discount the institutions or people behind those choices and come to rely on their goodwill. In a relatively sound and fair political system nudges are almost certainly always going to have better outcomes than costs, but this cannot be said for all. In plain terms, if we morally allow a ‘good guy’ to use nudges for the benefit of society, how can we argue against a ‘bad guy’ to employ nudges for what they will define as the good of society?


Works Cited


Benedictus, Leo. “The nudge unit - has it worked so far?” The Guardian, 2 May 2013, Accessed 8 Feb. 2017.


Kumar, Victor. “Nudges and Bumps”. Georgetown Journal of Law and Public Policy, forthcoming, Accessed 8 Feb. 2017.


White, Mark D. “We’ve Been Nudged: The Effects of the Downturn on Dignity and Responsibility”. Consequences of Economic Downturn: Beyond the Usual Economics. SSRN eLibrary, Accessed 8 Feb. 2017.