Richard H. Thaler & Cass R. Sunstein, “Libertarian Paternalism Is Not an The idea of libertarian paternalism might seem to be an oxymoron, but it is both. Libertarian Paternalism. By RICHARD H. THALER AND CASS R. SUNSTEIN*. Many economists are libertarians and con- sider the term “paternalistic” to be. Libertarian Paternalism. By RICHARD H. THALER AND CASS R. SUNSTEIN’. Many economists are libertarians and con- sider the term “paternalistic” to be.

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The authors make their case in paternalis, by rhetoric, not argument: Also, they do not present any evidence that choices of this kind are flawed by their criteria.

A smoker does not want a pack of cigarettes as an end in itself. If you do not believe that defaults matter, because you believe that people will make rational decisions about something as important as retirement saving, then you should not care about the default rate.

Countries that have an “opt-out” system for voluntary organ liberatrian anyone who did not explicitly refuse to donate their organs in the case of accident is considered a donor experience dramatically higher levels suntein organ donation consent, than countries with an opt-in system.

Thaler and Cass Sunstein. But what if the purchaser has a strong aversion to paying for repairs when an appliance has broken down?

Libertarian paternalism

This article is about the concept of liberal paternalism, which is sometimes described as lobertarian form of soft paternalism. Home Mises Library Libertarian Paternalism. What right have other people to a say in the matter? Instead, the state needs to step away entirely and allow people to dispose of their organs as they wish.

As if this were not enough, people often lack the information required for an informed choice. People often make mistakes in logic. Archived from the original on 4 July Unless, though, they have filled out a donor card, doctors who wish to transplant organs must secure the consent of whoever has legal custody of the body.

The possibility to opt-out is said to “preserve freedom of choice” p. After all, doing so may enable libertzrian better to achieve what lubertarian “really” want — as libertariann, suitably instructed by Thaler and Sunstein, determine. His faulty reasoning does not count as part of his free choice. People often do regret their choices. Those who are making an informed deliberate choice to put aside zero percent of their income in tax deferred savings still have this option, but those who were not saving simply out of inertia or due to procrastination are helped by higher default contribution rates.


If people do not “really” choose their actions, why not forcibly restrict them? There is a problem here that Thaler and Sunstein fail to note. Though the authors cite two papers by Epstein, they do not respond to this book or even mention it in their bibliography. So far, I have not questioned the evidence Thaler and Sunstein offer that people act irrationally but have instead tried to show that, accepting their evidence, their case for libertarian paternalism has not been established.

It is also asymmetric in the second sense: What he “really” wants is that his preferences be fulfilled in the way best fitted to do so. For other uses of “soft paternalism”, see paternalism. But libertarians can support it, because it forces no one to donate. Until recently, the default contribution rate for most tax-deferred retirement savings plans in the United States was zero, and despite the enormous tax advantages, many people took years to start contributing if they ever did.

Given these uncontroversial characterizations of the two positions, is it not obvious that they cannot be combined with each other? For example, it has been argued that it fails to appreciate the traditional libertarian concern with coercion in particular, and instead focuses on freedom of choice in a wider sense.

To return to the transplant case, if the state says to people that their organs will be taken from them unless they explicitly direct otherwise, it is claiming to set forward the terms under which people can retain control of their own bodies. The authors consider a related objection, but they do not fully grasp the key point. Thaler and Sunstein thus have yet another way to question people’s choices: Thaler and Sunstein published Nudgea book-length defense of this political doctrine, in new edition Their proposal endeavors to be both libertarian and paternalistic: For a sense of Thaler’s views on government interventions in the marketplace, we have posted below David Gordon’s review of one of Thaler’s more well-known books.


Richard Epstein has written a detailed response to many of the arguments for irrationality that Thaler has advanced on previous occasions: Rather, he wants certain feelings, e. Raising default contribution rates is also an example of asymmetric paternalism. Suppose an employer has a voluntary plan that allows workers to save for retirement.

Thaler and Sunstein offer a further argument for the nudges they favor.

Libertarian Paternalism | Mises Institute

Related concepts Behavioral economics Social proof Default effect Libertarian paternalism Choice architecture Social engineering Design for behaviour change. Is it not obviously true that people often act impulsively or illogically, in ways that they later come to regret? The term was coined by behavioral economist Richard Thaler and legal scholar Cass Sunstein in a article in the American Economic Review.

Force may be used only in response to aggression. It is libertarian in the sense that it aims to ensure that “people should be free to opt out of specified arrangements if they choose to do so” p. But not all cases are like this, as the transplants example illustrates. Smokers, putting aside the issue of secondary smoke, do not violate others’ rights: This is hardly libertarian.

There is thus practically unlimited scope for the libertariam to suppress liberty: They do not favor doing so; but this leaves them free to support a less exigent variety of paternalism. By using this site, you agree to the Terms of Use and Suhstein Policy. He has a choice: Given the authors’ wide net, few actions count as rational choices.