Who Are You Calling Irrational?

Kovvali, Aneil | April 25, 2016

Nudges are interventions that encourage people to make particular choices by shaping the context in which the choices are made. These interventions can have major impacts because of quirks in the way that human beings process information. Cass Sunstein places nudges at the core of a regulatory philosophy of “libertarian paternalism,” which suggests that while the government should generally preserve the freedom of citizens to make their own choices, it should also intervene to improve on the choices it deems self-destructive. In Why Nudge?, Sunstein defends libertarian paternalism against John Stuart Mill’s Harm Principle, which holds that the government is only justified in coercing a person when it is acting to prevent harm to others. This Review uses an analogy to voting paradoxes to show that the type of quirks exploited by nudges can occur whenever people attempt to reconcile multiple, inconsistent goals. The fact of inconsistent goals also means that regulators deploying nudges must select their own objectives. Absent a harm to others, the legitimacy of such a selection is open to question. Legislatures are also structurally prone to many of the same quirks as individuals, meaning that governments must adopt troubling institutional arrangements to root out irrationality. Given the breadth and flexibility of the Harm Principle, there is little reason to abandon it.