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The value of nudging

December 1, 2010

Laurie wrote yesterday about how the new health white paper draws extensively on “nudge” theory: the idea, derived from behavioural economics, that people can be influenced to make more positive decisions by the way in which the “choice architecture” is presented to them (e.g. by having to opt out rather than in to a pension scheme). This follows news over the summer that David Cameron has established a “nudge unit” within Downing Street.

So nudging (or liberal paternalism to give it its posh name), seems to have established itself as one of the most influential political ideas of the last couple of years.

There are three key features of the discussion around nudging that are particularly interesting.

The first is the debate about what sort of issues nudging best addresses and at what level. (The Health White paper offers a view on this)

The second is the persistent uncertainty about whether this is an idea that sits more happily on the big-state left or the small-state right (libertarian paternalism may not be an oxymoron but it does seem to encourage this debate).

In part this derives from the fact that nudging appears to be non-ideological, simply a means of helping us more easily to achieve rational ends.

This leads to the third element: it is often suggested that nudging is a way of “fixing” adaptive discrepancies between the way we evolved and the way the world now is. So for instance we evolved to crave sugar in an environment in which sugar was scarce and have not adjusted to a context in which it is plentiful. Hence obesity and hence our need for nudging.

This again, underlines the non-partisan aspect of nudging – it simply helps us to become better suited to the environment we live in and who could take issue with that?

This is perhaps why politicians of all political persuasions have been keen to latch on to this way of thinking. It has two obvious attractions: its safely non-ideological nature and its technocratic appeal, the promise that a technical solution can be found to complex social problems.

But both of these are based upon an illusion. Nudging is not free of values, it simply defers them. If I am nudged to save money for the future and improve my health, it is only because we have as a society decided that health and prosperity are values that we want to pursue. There’s nothing rational about the choice of ultimate ends and Libertarian paternalism has nothing to say about it.

At LGiU we believe in local politics and local debate. It is for communities to argue over the ends they seek to achieve and the means by which they achieve them. Behavioural economics cannot do this for us. Nudging may be a useful tool is some circumstances but it is no substitute for the political process.

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