Nudge, Choice Architecture, and Libertarian Paternalism

By all external appearances, Nudge is a single book-two covers, a single spine, one title. But put these deceptive appearances aside, read the thing, and you will actually find two books-Book One and Book Two. Book One begins with the behavioral economist’s view that sometimes individuals are not the best judges of their own welfare. Indeed, given the propensity of human beings for cognitive errors (e.g., the availability bias) and the complexity of decisions that need to be made (e.g., choosing prescription plans), individuals often make mistakes. Enter here the idea of the nudge-the deliberate effort to channel people into making the selections that are best for them. The key thing about a nudge is that it’s noncoercive and there’s always an opt out. Then there’s Book Two. This book is also about nudge. Nudge on steroids. This is the book where Nudge-the insight about how to improve delivery of services-turns into the full-fledged ideology that Sunstein and Thaler call “libertarian paternalism.” In its libertarian moment, libertarian paternalism eschews command-and-control regulations in favor of regimes designed to allow individuals to “go their own way.” In its paternalist aspect, libertarian paternalism nonetheless allows the government to structure the regime with a view to achieving set government goals. The defining characteristic of this ideology (besides its origins in Nudge) is a persistent drive to find the middle ground between libertarians and paternalists, Democrats and Republicans. This is what makes Book Two different: In Book Two, Sunstein and Thaler are not simply interested in correcting for cognitive error or improving the choice architecture of government programs, but in displacing ideological competitors on the right and the left. They are quite deliberately looking to flesh out that elusive “Third Way.”