‚ÄòNudge’ by Thaler & Sunstein is one of the in books of the moment. I agree with this (page 10):
The false assumption is that almost all people, almost all of the time, make choices that are in their best interest or at the very least are better than the choices that would be made by someone else. We claim that this assumption is false – indeed obviously false. In fact, we do not think that anyone believes it on reflection.
They are right about the assumption – of course it is false. We quite clearly do not have the capacity to make all the decisions that are required of us to manage a modern life. Without others taking most of them for us (others often, but by no means always, being backed by government) chaos would ensue and the quality of life for all would be vastly lower, however defined, than that most enjoy now. Thaler & Sunstein are right, of course, in that respect. It is why they quite openly promote a system of paternalism.
They’re wrong to say that on reflection everyone would agree with them. Far too many professional economists still base their work on the assumption that not only is it possible for an individual to make all the necessary decisions required to determine their well being, but that we should assume that this is what actually happens and we should base our economic planning on this assumption – however false it clearly is. Worse, they so clearly think this possible they are quite unable to identify the influence of others on their own work – and so claim they are objective when making this absurdly wrong claim – and at the same time suggest that anyone who challenges their obvious error is casting aspersions on their objectivity. Of course those who make that challenge are doing just that – because the claim of objectivity is as false as the claim that Thaler & Sunstein identify.
The situation they create is worse than that though. Because these economists now dominate their profession – and allow no one into it who disagrees with them – those who hold this belief influence government, the media, politics and society. Hence we get a false agenda of ‚Äòchoice’ – which is seen as the prime virtue of desirability – when it is now known that choice is often crippling and most people simply want something that works – nothing more or less.
There is something more sinister still about their agenda though.These people openly promote the idea that government is wrong because it supposedly denies people choice. So tax is a bad thing because it denies people the choice about how to spend their money – even though the vast majority of people are clearly happy that we have an NHS, state education, security forces, and much more besides that they could never enjoy without having passed over the decision making authority on these issues to government – knowing the government will (most of the time, but not always) decide on these issues better than they could themselves – which is why we have had so few changes of government in the last 30 years.
Why sinister? Because this economic viewpoint – invariably right wing – feeds straight into the libertarian views of the likes of the Taxpayer’s Alliance – an organisation with no intention of representing taxpayers at all but with every intention of undermining the vey process of government which underpins our well-being by denying it the revenues it needs and by deliberately undermining its working by turning those for whose benefit it works against it by spreading false accusation of maladministration – almost none of which stand up to real scrutiny.
Day in day out that same message is seen in papers like the Daly Mail and Express – suggesting that government is daily undermining the freedom of their readers. And yet, the moment the government really does threaten to return a decision to the readers of such papers there is uproar – as the Express yelled on Monday when saying that a charge to visit a GP would be outrageous – although clearly any libertarian would have to support that market based logic.
What this therefore says is that Thaler and Sunstein are right again – no one can actually hold these views upon serious reflection, but that the capacity to reflect in that way has been drummed out of many professional economists and their slavish, non reflecting journlaitisc followers who promote this cause out of what is, in this case, clearly misguided self-interest, but who do in the process provide a platform to fanatics who do immense damage to many in this country.
That though is ultimately the flaw in the logic of Thaler & Sunstein’s ‚ÄòNudge’ thesis. They call it ‚Äòlibertarian paternalism’. I’ll agree with the latter. The former is pure pretence. It is about providing the illusion of choice when the reality is that either none is available, or it is incredibly constrained, or in fact (as fashion evidences day in, day out) the desire to make ‚Äòchoice’ is actually all about the need to conform under a veneer of difference.
That is the reality of much of life. Advertising sells the lie of choice when it is actually selling a person dissatisfaction with their state of compliance with societal norms. Economics as taught at present says we are all free to choose when that is absurdly and obviously wrong. And Nudge offers the appearance of choice whilst saying its really only exercised at the very margins of service supply.
In which case let’s be honest. Let’s say in this complex modern world some things can’t be done with choice on the agenda. There is room for only one health service if we want a truly excellent one – as the contrast of the UK’s NHS with the US debacle proves only too clearly. There is room for only one education system if all children are to get access to excellence. We can only have one police force in an area, one fire service, one provider of refuse services – and only one regulator of an activity if it is to be done properly.
Of course we can have choice on a great many issues. Many consumer goods, despite their obvious similarities in many cases, can be offered in a bewildering variety of options if that does not result in waste (a big proviso, I might add). And, for example, there is no reason why the country cannot support the vast number of market based service organisations it enjoys without apparent problem of any sort. That’s all fine.
But let’s not pretend one size fits all – and that we can choose on everything. We can’t. We don’t even want to. And if we did we’d probably get it wrong. So it’s up to the state to do the most complex things – to take the stress of these decisions away from us – but to then supply these services at an excellent standard.
Which is what actually happens, by and large. Most people are big fans of the NHS, their local school, the police, our troops and much more besides. Which gives a lie to the claim that people don’t like what government does. They do.
I know the Left is looking to redefine its purpose right now – James Purnell, Jon Crudas, Alan Simpson and others are planning to do this at Demos. I hope others join in. But James Purnell, at least (but not the other two, who I know somewhat better) is making a serious mistake when he claims the left is about ‚Äòequality of capability’ (which sounds horribly like equality of opportunity when we do want greater equality of outcome – and should be honest enough to say it). He’s right that the Left is about a belief in equality – but one way of evidencing that is by saying we believe in the State supplying first rate services equally accessible to all that ensure that individuals have the freedom to devote time to the choices they face in other dimensions of their lives that matter to them sure in the confidence that in many key areas where they do not have the competence or resources to decide the job has been well done for them.
This requires tax.
This requires us to believe in democracy.
It requires pride in public services.
It requires that those services be well managed.
But most of all it requires us to have the conviction to say we can decide to do this. That we believe that collectively a government can make good decisions for others. That this is a significant part of what government is about. This is why it deserves support. This is why we fight for excellence in these services. Because on the basis of that excellence – which with renewed confidence we can deliver better then ever before – can be built better lives for all people in this country – lives which will include the freedom to decide on those things which as individuals are best reserved to us alone.
So no nudging please – let’s go out there and be explicit about what we believe in, what we want and what we stand for.