"Why Nudge" has a shaky foundation that, like some Hollywood movie, requires suspension of disbelief to proceed. Once you get over that hump, the book makes great sense. The hump is John Stuart Mill's Harm Principle, which says that if something doesn't harm anyone else, you should be left alone to deal with it as you please. If no harm occurs, government should not be regulating or managing it. But it is easy to show, particularly in this litigious, liability-obsessed society, that virtually any action in a highly varied population has repercussions that harm others, if only through the expenditure of taxpayer dollars. Every traffic jam costs money in lost productivity (travel time), maintenance and pollution. Any sort of law requires enforcement (detectives, prosecutors, offices, jails ...). If you water your lawn, there's less water available to drink. It is easy to rationalize pretty much any action as harming someone else. Far from a zero-sum game, harm spreads geometrically, like the proverbial butterfly batting its wings in Brazil, causing a typhoon in Japan. But since this entire lecture series is built on the premise that paternalistic nudging of behavior can direct actions away from harm, you kinda hafta go with it. Sunstein finally dismisses this concern half way through the book, because he must. Ironically, it is Sunstein's stated purpose to "cast doubt" on Mill's Harm Principle.
His main concern is whether nudges are paternalistic. He categorizes paternalism in four neat boxes; it is either soft or hard, means or ends. They are self explanatory (well named) and really easy to visualize. The least objectionable road to success is soft and means, in which gentle nudges like ratings, warnings and data help people decide for themselves. The biggest problem is that people make the wrong decisions, often choosing against their own best interests. Giving them data makes a big difference. Even just the existence of surveys colors consumers' choices. Knowing that, a skillful nudge could improve a life.
But characterizing nudges as paternalism is not so easy. Consider the French Bonus-Malus, a real life program Sunstein does not examine. If you bought a small car with good fuel economy, you got a bonus of hundreds of euros towards the purchase. If you bought a poor mileage vehicle, you paid an extra fee, up to 3000 euros. The theory was it would be zero-sum, ie. self financing. "Unfortunately" it was so successful at promoting smaller cleaner cars, it bankrupted itself. This was clearly nudged behavior. The question is, was it paternalistic? In a cohesive society, the question is meaningless.
At some point, America changed. From the time of hunter-gatherer societies, paternalism had been sought after. People willingly agreed to it in exchange for some sort of protection, some sort of advantage. But today, Americans view government as the problem, not the solution. This makes nudging unnecessarily controversial. If the pendulum swings back, this whole argument goes away.
That this one thin volume can elicit such thoughts is a good indication of its import. Nudges, while inherent and unavoidable in many cases, need to be recognized and better employed. Sunstein has furthered the discussion with intelligent analysis. In other words, he is nudging us to appreciate nudges.
on January 7, 2015
I got this book because I needed it for research purposes, and thus I maybe would have given it a little higher grade elsewise (a 3.5 maybe, if I could). It is pretty short (few, small pages, with few words per page) read and you could finish it within a few hours.
The writing is simple and relatively consistent, although there are various problems with specifics, from definitions to concepts, to literally a ton of stuff. However, for someone who wants an introduction into the subject, it is quite good. Sunstein does provide footnotes, which is great, and he explains everything thoroughly.
For someone who wants to harvest the ideas fast, he could only read the first chapter, and probably the conclusion, and be okay. After that, the book does get repetitive, and this is because it seeks to examine details.
Having read Sunstein previous works, I can say that there are two probable reasons for this book. To earn some extra money, and to try to persuade libertarians. I sincerely don't know which is worst, because the second reaches the level of obsession.
All in all, I would recommend this book to those who don't have previous readings on the subject. If you do have relative readings, then just read the original paper (co-authored by R.Thaler).
on July 15, 2014
Sunstein's intial premise seems harmless, almost benevolent. But underneath the surface of his philanthropy is a totalitarian nightmare. I doubt Sunstein would like to be "nudged" with a 5.56 round, but he asks that we welcome it. Sunstein would start with sweet little suggestions, that end up as government regulations enforced at the point of a gun. Of course, detached as he is from reality, it never occurs to Sunstein that government is one of the obvious and major reasons people make irrational decisions, that are actually quite reasonable and rational from an individual perspective.
Thanks to Sunstein and his ilk, this is truly "The Golden Age of the Anti-Intellectual." Government-sponsored propaganda has been refined and perfected to a point that would have made the Bolsheviks and Nazis marvel. Never in history have so many bad, unworkable ideas been so cleverly packaged and presented so as to be accepted by so many. The key to acceptance of [il]Liberal ideas is manipulation of emotions and promises of goods and services.
As long as they receive government benefits and hand-outs, most citizens will not look behind the "wizard's curtain." Nevertheless, modern U.S. Government is unlike any before. Citizens can observe that government is now nothing more than an unsustainable Ponzi scheme. A broad tax base of new taxpayers is needed every year just to pay basic government expenses. Yet, each year, the tax base shrinks (population of taxpayers decreases) and government expenses rise. In the face of this disaster, has government made an all-out effort to cut expenses? Of course not. Government is raising taxes to dangerous and debilitating levels, borrowing huge amounts of money from foreigners, and INCREASING EXPENSES. Obama has quadrupled-down on failure, creating the largest deficit ever. If a private citizen or corporation ran its affairs in this manner, it would be criminally prosescuted for fraud.
Citizens have internalized the government's ongoing propaganda-of-irresponsibility, and they observe the government's example of irrationality and emotionalism. And now the People are behaving just like their government. This is what government "nudging" has created.
Our government has increasingly alienated people from individual responsibility and from other citizens, and it has taken the risk out of making decisions. For over 60 years now, citizens have been detached from the effects of their negative decisions, whether concerning lifestyle or the effects of bad financial choices. With a constant barrage of government-sponsored propaganda; emotionalism and group-politics have replaced rationality as the bases for decision-making. And modern U.S. government propaganda is the most effective in history, as it employs all the lessons learned and techniques of behavior manipulation from the disciplines of sociology, psychological warfare, and psychology over the past 100 years. There are ongoing propaganda programs promoting and encouraging government provided medical care, unemployment insurance, welfare and social security benefits, free monthly income even for young people, and the chance of filing a lawsuit or getting the government involved when investments go bad. The government conditions citizens to incorrectly believe that correlation is the same as causation; and that appearances and emotional intent are the same as results. The government's goal: promote reliance on government and avoidance of individual responsibility, thought and judgment. Why? To insure ease of public manipulation and the political power of certain groups. Sunstein, of course, refers to this conditioning, manipulation and control as "nudging."
For example, during the recent "subprime mortgage crisis" all parties behaved rationally and reasonably, EXCEPT the supposedly rational U.S. Government. Homeowners who could not afford houses knew the government was guaranteeing the loans and, given their minimal down payments, they knew they had little to lose from foreclosure if they could not make payments. Thus, it made perfect sense from their perspective to risk buying homes they could not afford. Similarly, lenders knew the loans were government guaranteed, and the government was threatening lenders with lawsuits and fines if they did not make loans to unqualified buyers, so the lenders knew they had little risk in making imprudent loans. In fact, lenders faced greater risk from government harassment if they did NOT make imprudent loans. Investors in those loans also acted rationally. They understood, correctly, that the government would not allow homeowners, lenders and investors to lose billions or trillions of dollars on a program the government forced on the country. Thus, investors bought loans they knew would probably go into default, because, even if they received no payments from borrowers, the government would rescue financial institutions and investors, which it did. Finally, the only party that did not act rationally was the U.S. government. First, it "incentivized" imprudent economic activity by taking the risk from lenders, borrowers and investors. Then, to make matters much worse, it actually rewarded and has now promoted imprudent financial activity by rescuing all parties to the government created mortgage "crisis."
Over the past 60 years, governments have aggressively promoted irrational risk-taking (which is actually rational for the individual, since he risks nothing), which has spread to all areas of individual human endeavor. Citizens are increasingly losing their good judgment, since the world in which they live is a fiction created by the government, bearing no relation to the real world of finance, economics, and survival based on good decisions. Thus, irrationality is a necessary part of modern government. In fact, many of the programs created by the government have the irrational and exact opposite effect than the one intended. For example, the 1960s "Great Society" and "War on Poverty," created more poverty. The War on Gun Ownership has resulted in more violence by criminals. The welfare system designed to help families, destroyed families, and created several generations of illegitimate children. Despite billions spent on education; Math, Science and intelligence testing scores are in decline. This is because foolish government bureaucrats and academics have confused correlation with causation. Education does not make people successful. Rather, successful, intelligent people are more likely to finish their education and continue on with their successful lives. It is a waste of money to try to over-educate unintelligent individuals, who should be directed to trade training. Instead, politicians tell us it is preferable that students receive diluted, fake degrees. Amazingly, not only does the government not encourage the most intelligent and productive citizens to have children, but instead, the government now subsidizes and promotes the breeding of the least intelligent inhabitants of the country. In many cases, the people receiving these breeding subsidies are not even citizens! There is insufficient space here for a complete list of government irrationalities.
It is enough to note that modern government employs techniques similar to the "Cargo Cult" islanders who, by using sympathetic magic, thought that creating the superficial appearances of a successful system (fake airport and planes), would bring material reward (delivery of cargo). (See Richard Feynman). Like modern politicians, the Cargo Cult confused correlation with causation. Citizens have learned the lessons of government irrationality and it has conditioned individual behavior. Many academics and intellectuals, such as Sunstein, have lost sight of the fact that human beings are animals that respond in ways that are similar to organisms and other animals. That is, they seek the easiest path to satisfaction of needs and emotions, and avoid effort and thought whenever possible. This is particularly true of individuals subjected to prolonged government propaganda campaigns. The hard lesson we have learned is that there is no such thing as "Social Darwinism," there is only Darwinism. Government cannot force one to be successful, but it can set up conditions promoting irrationality and failure, as the U.S. has done. The best antidote to predictable government irrationality is to place individuals back in touch with reality, that is, with the true effects of their decisions. Despite Sunstein's faulty analysis, he does unwittingly show the many ways in which government directly and indirectly promotes irrationality.