Protecting the People: When a Nudge is a Push
A discussion of “Nudge: The Final Edition” and how governments can use ‘nudging’ principles in an ethical, productive way.
Richard Thaler and Cass Sunstein published the first edition of Nudge in 2008, titled Nudge: Improving Decisions about Health, Wealth, and Happiness. In response to a widespread misunderstanding of human decision-making in economic sciences, Thaler and Sunstein propose governmental adoption of ‘nudging’ techniques. They call this new political philosophy “libertarian paternalism”. According to Thaler and Sunstein, a nudge is: “any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid.”[1] Government nudges range from putting nutrition facts on food packaging (to help people eat healthier (US)) to publishing an app that links users to the nearest e-waste locations (to encourage recycling (China)).[2] While nudge policies offer governments a simple and effective solution to their constituents’ irrationality, a darker side has emerged. Across the world, corrupt governments have used nudging to manipulate voters, encourage unnecessary spending, and control public opinion. Even in countries like the US, where corruption is rare, the government may be acting undemocratically. More specifically, some nudging techniques undermine their citizens’ rational agency, or autonomy, violating their constitutional rights. In response, I recommend the US government develops a legal definition of nudging, drawing a policy line before they can cross it in a meaningful way. This would ensure a democratic and transparent use of governmental nudging that would increase the welfare of citizens while respecting their right to choose.
Thaler is the first to acknowledge that nudging is not a new concept. Private sector companies embraced nudging — before it was called ‘nudging’ — when they realized nudges could help them achieve financial, engagement, and environmental goals.[3] For example, Amazon offers ‘frustration-free’ packaging, which uses no extra plastic or wires when shipping a product. The purpose of ‘frustration-free’ packaging is to reduce Amazon’s environmental footprint. However, just saying ‘environmentally friendly packaging’ isn’t very effective. Instead, by presenting this packaging as a more fun, or ‘less frustrating’, alternative to typical packaging, they can increase the number of people who use this option.[4] Thaler was one of the first people to study how these nudges could be applied in other areas of our economy and began to research them as a professor at the University of Chicago.
Thaler found success after about a decade while applying these nudging principles to governmental policies, earning the title “The Father of Behavioral Economics.” Thaler would then publish the first edition of Nudge.[5] In the thirteen years since Thaler published the first edition, over 400 ‘nudge units’ — or nudge policy task forces — have been established in the public- and private-sector.[6] His proposals, like default enrollment in retirement savings plans and school lunch programs, or his ‘save more later’ spending policy, were so widely celebrated that Thaler won the Nobel prize for economic sciences in 2017.
However, the Final Edition, published in August of this year, is not a just victory lap for Thaler. Instead, Thaler wrote the Final Edition to discuss the validity of political criticisms, theoretical developments, and the harmful misuse of his principles. For example, Wales, England, and Germany recently switched to presumed consent for organ donation, where people were classified as willing donors by default.[7] This meant that people needed to opt out of this classification if they did not want to be organ donors. This policy significantly increased the number of organ donors because it took advantage of their inaction, or “inertia”. According to Thaler and Sunstein, this application of presumed consent — a variation of a default nudge — failed to consider all parties involved (patients, potential donors, and the families of donors) and should be improved to “accommodate competing interests, preferences and rights.”[8] In other words, simply maximizing the number of organ donors is a one-dimensional and immoral application of a nudge. Thaler and Sunstein continue to discuss how different types of nudges may be undemocratic. For example, more aggressive variations of organ donation policies, such as “routine removal,” represent an overly authoritarian policy while more passive policies like “explicit consent” could be morally irresponsible.[9] This revision of nudge policies is a discussion point in a budding field of debate called ‘nudge ethics.’ Nudge ethics aim to balance the welfare of all parties with the constitutional powers afforded to a democratic government.
Topics when discussing nudge ethics fall into two vaguely defined categories, a government’s role in society (dignity) and a citizen’s constitutional rights (autonomy). Let’s start with the former. To some, nudging is moralizing and arrogant.[10] A government’s ability to nudge can create an unnecessary hierarchy among decision-makers. No matter the nature of the nudge, the government is influencing people to do what the government thinks is correct. It does not matter whether the nudge is morally justified; A government that is controlling a person who can make their own decisions could be seen as overstepping its boundaries. Peter Wilby points out that our (or the U.K.’s) government may be systematically unfit for nudging.[11] Wilby criticizes nudging by saying it can incorrectly attribute ‘irrationality’ to behavioral flaws instead of systemic shortcomings.[12] This builds a picture of a government buck-passing systematic problems to their citizens and then fixing them using temporary and ineffective nudges.[13] While not obvious, Wilby’s argument is an extension of the first one. By allowing a government to nudge we are assuming limited fallibility. After being declared infallible, a government can impose its will, indirectly diverting responsibility for systematic social issues. Thus, a government could continue influencing its electors based on a perceived moral compass.
These arguments concern the dignity of a government’s people. Consider a more theoretical example: A public campaign against obesity that stigmatized and embarrassed the policy’s target group.[14] With this example, we can see why the ability to institute a nudge may not be valid just because it doesn’t require people to do anything. Even though this scenario is possible to imagine, it seems unnecessary to concern ourselves with a subjective discussion of the extreme. You say it’s a bad thing that is unacceptable and I say we must accept these consequences as welfare-focused members of society, and around we go. Further study of this dignity perspective and a government’s role in society extends to political philosophy but is not any more relevant to this review (although debating libertarian paternalism is certainly valuable in a different context.)
The second argument is one in favor of protecting autonomy. The difference between the autonomy and dignity discussions is 1. Autonomy could be considered a constitutional issue where dignity could be considered a preferential one (at least in the context I present). 2. Real-life violations of autonomy are much easier to imagine and are more harmful once allowed. Like the argument defending a person’s dignity, it is crucial to highlight the importance of circumstance. It could be said that some nudges increase autonomy. Sunstein says, “autonomy requires informed choices, and many nudges are designed specifically to ensure that choices are informed.”[15] I agree. I do not believe there is harm in putting up a sign at a beach that says “SHARKS IN WATER. SWIM AT YOUR OWN RISK” as long as there are actually sharks in the water. If used to increase knowledge about something, or correct behavioral biases and systematic mistakes, nudging promotes a person’s agency.
However, with default options, while freedom of choice is technically preserved, there is a threat to autonomy. This threat comes when the default choice option does not track peoples’ likely choices. Take, for example, a default that says all your belongings go to your brother after you die or even that your organs would only go to your family members.[16] This could be seen to violate a person’s autonomy because it would not reflect the choice a person would make with all available information. If a default option does not represent a rational decision someone would make given all available information, then the default option could be said to be manipulative or coercive.
In his paper on nudge ethics, Cass Sunstein cites Joseph Raz, who says: “Manipulation, unlike coercion, does not interfere with a person’s options. Instead, it perverts the way that person reaches decisions, forms preferences or adopts goals.”[17] One could imagine how a government could misleadingly frame a problem that takes advantage of peoples’ aversion to loss, oversimplify a medical study to scare people into action, or even just lie to achieve a goal that they deem morally correct. Those would be examples of manipulation, and even coercion. As Raz says, manipulation or coercion are blatant violations of autonomy, especially when a person makes a decision not because it is the best decision but because it is presented in a certain way by someone else. This clearly undermines a person’s decision-making ability and freedom of choice.
Perhaps the most critical part of this discussion lies in the most fundamental applications of nudging. Thaler talks about putting certain foods at eye level in cafeterias to encourage people to choose a healthier option or using a graphic picture of lung cancer on the front of a cigarette box to discourage smoking. Is there an attempt to ‘subvert’ a person’s ability to decide? Sunstein says yes. But where Sunstein disagrees with the autonomy-defending critics is when he says that these examples of choice architecture are valid and justifiable in the pursuit of societal wellbeing.[18] I agree with him to some degree. However, I think that there should be legislation in place that makes it difficult for governments to use excessive nudging that undermines peoples’ rights.
Any proposed legislation must balance the role of the government with the rights of its people. The first step to protecting people from harmful nudging is transparency, especially with default nudges.[19] While the validity of a default nudge should be judged circumstantially, a government should always be transparent about how they use nudging. If they are going to institute a series of nudge reforms to combat climate change, they should be clear about how they will do it and why they are doing it. Additionally, when possible, governments should make every effort to prioritize active and prompted choice.[20] Default choices are tricky. Whether it is health insurance or organ donation autoenrollment, the choice that many would come to with all available information isn’t always representable by one choice. By prioritizing active and prompted choice, a government is giving people the opportunity to choose for themselves. Only in cases where people continuously forget or are unwilling to choose, should governments resort to a default option. In which case, they should make a good-faith attempt to choose the option that the person would make given all available information. Finally, and perhaps most importantly, there should be a legal definition of an appropriate nudge policy that would serve as a guide for policymakers going forward. I propose Thaler’s definition vision of nudging.[21] It is not a new definition; it simply clarifies how we should restrict nudging so that people can hold the government accountable for their policies. I think that through a mix of public scrutiny and regulatory guidelines, nudge policy can operate as a valuable and effective tool for policymakers looking to maximize welfare.
[1] Thaler, Richard and Sunstein, Cass. “Nudge: Improving Decisions about Health, Wealth, and Happiness”. Penguin Books. 2008. Page 6.
[2] Rohaidi, Nurfilzah, “Six ways governments are ‘nudging’ citizens”, GovInsider
[3] Thaler, Richard and Sunstein, Cass. “Nudge: Final Edition”. Penguin Books. August, 2021. 26–29
[4] Fusaro, Roberta and Sperling-Margo, Julia, “Much anew about ‘nudging’”. McKinsey & Co. August 6th, 2021.
[5] Richard Thaler, Faculty Website. Booth School of Business, University of Chicago.
[6] Fusaro, Roberta and Sperling-Margo, Julia, “Much anew about ‘nudging’”. McKinsey & Co. August 6th, 2021.
[7] Thaler, Richard and Sunstein, Cass. “Nudge: Final Edition”. Penguin Books. August, 2021. Page 254.
[8] Ibid.
[9] Routine Removal: “In this regime, the state owns the rights to the body parts of people who are dead, and their organs can be removed without asking anyone’s permission.” Explicit Consent: “People have to take some concrete steps to state that they want to be donors.” Also known as the opt-in approach. This could be morally irresponsible because it would result in the lowest amount of organ donor enrollments (inertia.)
[10] Behavioral Economics. “Autonomy of the Nudged” Behavioral Economics.
[11] Wilby, Peter. “The kindly words of Nudge are Cameron’s idea veneer,” The Guardian. Aug 15, 2010.
[12] Ibid.
[13] Blog admin, “Think before you nudge: The benefits and pitfalls of behavioural public policy.” LSE blog.
[14] Sunstein, Cass. “The Ethics of Nudging”. Yale Journal on Regulation . 2015, Page 441
[15] Sunstein, Cass. “The Ethics of Nudging”. Yale Journal on Regulation . 2015, Page 437
[16] Ibid.
[17] Sunstein, Cass. “The Ethics of Nudging”. Yale Journal on Regulation . 2015, Page 444
[18] Ibid.
[19] Ibid. Page 428
[20] Active Choice: A person is simply asked to make a choice. Prompted Choice: A person is asked to make a choice why the choice architect has their attention (asking someone if they want to be an organ donor while they are getting their driver’s license.)
[21] “choice architects should strive to pick defaults that are consistent with the choices people would make if they had all the relevant information, were not subject to behavioral biases, and had the time to make a thoughtful choice.”
Sources:
Behavioral Economics. “Autonomy of the Nudged” Behavioral Economics. https://www.behavioraleconomics.com/be-academy/courses/behavioral-science-ethics/lessons/nudge-ethics-part-1/topic/autonomy-of-the-nudged/
Blog admin, “Think before you nudge: The benefits and pitfalls of behavioural public policy.” LSE blog. March 17th, 2011. https://blogs.lse.ac.uk/politicsandpolicy/nudge-designing-behavioural-public-policy/
Fusaro, Roberta and Sperling-Margo, Julia, “Much anew about ‘nudging’”. McKinsey & Co. August 6th, 2021. https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/much-anew-about-nudging
Green Alliance blog, “The problems with nudge” Inside Track, March 31, 2011. https://greenallianceblog.org.uk/2011/03/31/the-problems-with-nudge/
Rohaidi, Nurfilzah, “Six ways governments are ‘nudging’ citizens”, GovInsider. https://govinsider.asia/innovation/six-ways-governments-nudging-citizens/
Schubert, Christian, “On the ethics of public nudging: Autonomy and agency.” EconStor. 2015 https://www.econstor.eu/bitstream/10419/125535/1/837886600.pdf
Sunstein, Cass. “The Ethics of Nudging”. Yale Journal on Regulation . 2015, https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=1415&context=yjreg
Thaler, Richard and Sunstein, Cass. “Nudge: Final Edition”. Penguin Books. August, 2021.
Thaler, Richard and Sunstein, Cass. “Nudge: Improving Decisions about Health, Wealth, and Happiness”. Penguin Books. 2008.
Wilby, Peter. “The kindly words of Nudge are Cameron’s idea veneer” The Guardian. Aug 15, 2010. https://www.theguardian.com/commentisfree/2010/aug/15/nudge-cameron-veneer-thaler-dogma
