The Contractarian Perspective

Chapter 3 proposes a contractarian approach to normative economics. Instead of taking a view from nowhere, a contractarian analyst addresses citizens as individuals, advising them how to reach mutually beneficial agreements. I identify early contractarian arguments in Hobbes’s Leviathan and Hume’s Treatise of Human Nature. I argue that contractarianism is appropriate if politics is understood as primarily about negotiation, rather than executive action or debate. I discuss the ‘libertarian paternalist’ (or ‘nudging’) approach to policy-making recommended by many behavioural economists. Although paternalistic recommendations can legitimately be addressed to social planners or to assemblies of public reasoners, they are out of bounds to contractarian reasoning. A contractarian has to show that her recommendations are in the separate interests of each individual, as that individual perceives those interests.

Coercive paternalism and the intelligence continuum

Thaler and Sunstein advocate ‘libertarian paternalism’. A libertarian paternalist changes the conditions under which people act so that their cognitive biases lead them to choose what is best for themselves. Although libertarian paternalism manipulates people, Thaler and Sunstein say that it respects their autonomy by preserving the possibility of choice. Conly argues that libertarian paternalism does not go far enough, since there is no compelling reason why we should allow people the opportunity to choose to bring disaster upon themselves if sometimes they will make the wrong decision. She defends ‘coercive paternalism’. The present paper argues that errors in reasoning are not due only to cognitive biases. People also make errors because they have an insufficient level of general intelligence. Intelligence is distributed on a continuum. Those who fall on higher levels of the continuum have greater abilities, in certain contexts, to reason about both their own and others’ interests. Coercive paternalism may sometimes be appropriate to prevent less intelligent people from engaging in self-destructive behavior due to errors of reasoning.

Libertarian Paternalism

This chapter examines the so-called nudge ideas based on libertarian paternalism and asymmetric paternalism, both of which seek to provide a practical approach to the trade-off between well-being and autonomy. Nudge policies are government interventions that seek to change the context in which people make choices—the “choice architecture”—so as to nudge them to make decisions in the direction that the government wants. “Libertarian” paternalism is paternalism because the policies involve government intervention in individual decision making with the intention of promoting the individual's own good, but libertarian because the individual maintains a range of choices similar to those that he/she had without the intervention. After considering the relevant definitions, the chapter considers the case for and against libertarian paternalism and concludes by highlighting the principal defense of libertarian paternalist policies: their effectiveness in terms of their impact on well-being and autonomy when compared to alternative paternalistic policies.

A Nudge in the Right Direction? Towards a Sociological Engagement with Libertarian Paternalism

Interventions framed through a behavioural lens, particularly ‘Nudge’, are gaining credence in US and UK policy circles, not least around healthcare. Key tenets of this ‘libertarian paternalist’ approach are discussed and related to sociological theory. The influential position of nudge begs sociological engagement, indeed its recognition of ‘choice architecture’ is partially congruent with sociological conceptions of structure-embedded agency. Though recognising the significance of norms, the analysis of nudge fails to appreciate their depth in terms of time, materiality and the socio-cultural. The potency and variable consequences of these social factors are emphasised through Bourdieu's concepts of habitus and field. This framework alongside various sociological approaches to risk and uncertainty are proposed as potentially fruitful paths of critical engagement.