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The Role of Soft Paternalism in America

Monday, August 12th, 2013

Drawing on behavioral psychology research and Cass Sunstein’s new book Nudge, David Brooks argues that a form of soft paternalism may be beneficial to the American public. Writing for the New York Times, Brooks suggests that there is a middle ground between government mandates and fully uninhibited consumer decision-making, which would improve society’s well-being.

Recent behavioral economics research has uncovered a wealth of common cognitive biases that prevent consumers from acting in their best interest. People are unable to calculate risk accurately and favor short-term utility over the long-term consequences of actions, Brooks argues. As a result, Brooks considers the efficacy of programs that frame decision-making differently for the public.

For instance, the government could transition to opt-out clauses where the default option is to save more for retirement. This form of government action Brooks calls “libertarian paternalism” where “government doesn’t tell you what to do, but it gently biases the context so that you find it easier to do things you think are in your own self-interest,” Brooks writes.

Such policies raise concerns as some envision soft paternalism becoming hard paternalism, with more government restrictions on behavior. In practice, however, Brooks argues that this worry is misplaced:

Most of us behave somewhat decently because we are surrounded by social norms and judgments that make it simpler for us to be good. To some gentle extent, government policy should embody those norms, a preference for saving over consumption, a preference for fitness over obesity, a preference for seat belts and motorcycle helmets even though some people think it’s cooler not to wear them. In some cases, there could be opt-out provisions.

These days, we have more to fear from a tattered social fabric than from a suffocatingly tight one. Some modest paternalism might be just what we need.

AEI