Review of Thaler & Sunstein 'Nudge: Improving Decisions about Health, Wealth, and Happiness' [Book Review]

The present book makes a particularly engaging case for a whole range of policy implications of behavioural economics. The rhetoric is highly compelling, and their approach is already having a significant impact. However, while the wider audience for whom the book is written may not be interested in the justification of the underlying principles, it is precisely the cracks in the foundations that pose the greatest threat to the project. For example, if Thaler and Sunstein are to have any chance of their 'libertarian paternalism' meriting ‘libertarian’ credentials, it is essential that the re-engineering of choice architecture not be guided by any particular political or moral agenda. Their claim here is that what makes a nudge beneficial is not that it steers people in the direction of behaviour that is objectively ‘good’ but rather in the direction of behaviour that they won’t regret. That said, there are a number of points where it is hard to shake the suspicion that Thaler and Sunstein help themselves rather conveniently to the idea that, if a person’s choices are largely a function of various framing effects, say, then overriding those choices violates no autonomy, since there was no autonomy there to be violated. In this review, I raise four concerns not adequately addressed in the book. (1) Thaler and Sunstein are misleading in their use of the term ‘paternalism’, which is standardly defined as a matter of interfering with a competent person’s choices out of a motivation to improve that person’s welfare. As Thaler and Sunstein use the term, however, it becomes equivalent to beneficence: when the government acts to improve people’s welfare by influencing choices in any way, according to them, it is engaging in paternalism. (2) Their appeal to the resistibility of nudges is a centrepiece of the account and particularly of its claim to be ‘libertarian’, but given what they themselves write about how effective nudges are and how poor we are at even noticing the influences to which we are subject, it is entirely unclear why we should expect nudges to be easily resisted. (3) Thaler and Sunstein generally align themselves with the perspective of planners who half-pose the presumptuously rhetorical question, ‘Who would really mind?’ But the question is not just whether people would object, if they were consulted. People also care about whether they are consulted and whether they understand the influences to which they are subject. Thaler and Sunstein advise choice architects against being secretive about nudges, but this espousal of principle, in a late chapter responding to objections, is not borne out by the discussion in the rest of the book, which focuses almost exclusively and rather effusively on the possibilities for channelling individuals’ choice-behaviour toward better outcomes. (4) Thaler and Sunstein tend to downplay alternative approaches to improving decision making that are perfectly compatible with the behavioural economics and social psychology discussed by Thaler and Sunstein, but less paternalistic. For example, there is a growing body of research on how to construct contexts of interpersonal deliberation to generate stable solutions to collective action problems, by improving people’s collective decision-making capacities, rather than subjecting them to nudges. More generally, one comes up with very different recommendations if one thinks of the problems to which nudges are supposed to be a solution not as a matter of human failings per se, but rather as a socially and historically contingent misfit between the decision-making capacities that particular policies and institutions require of individuals and the capacities that people actually have. Conceived in the latter way – in terms of what I have elsewhere dubbed ‘autonomy gaps’, it becomes an open question whether what is called for is a choice architecture that makes it easier to avoid regrettable decisions or, rather, various measures to improve individuals’ decision-making capacities, say, through education, ‘buddy’ arrangements, decision-making heuristics, etc.