Obama's Regulatory Chief Believes in Paternalistic Government

The old joke runs, “I’m from the government and I’m here to help.” Most Americans are appropriately skeptical of such a claim, just as they are skeptical when told that they’ve won $10 million in a Nigerian lottery. But President Obama’s selection of Harvard Law professor Cass Sunstein to direct the Office of Information and Regulatory Affairs threatens to turn this joke into grim reality.

Sunstein is most famous for his approach to government regulation known as “libertarian paternalism,” detailed in his book Nudge: Improving Decisions About Health, Wealth, and Happiness (co-authored with Richard Thaler).

The basic premise of libertarian paternalism is that the government should use its power to “nudge” people into acting in their best interest, while leaving them the choice to “opt out.” If the government decides that saving money is good, it would automatically divert a percentage of your paycheck into a savings account in your name unless you explicitly declined. Supporters claim that this preserves freedom because government is only changing the default, while leaving individuals the final choice. It is merely a gentle “nudge,” not a hard push.

However, nudging represents an assault on freedom, because it undermines man’s basic tool of survival — his mind. By creating a default, libertarian paternalism in essence says, “Don’t worry — we’ll do your thinking for you.” Sunstein’s book explicitly compares Americans to a bunch of Homer Simpsons in need of such guidance. If Americans surrender their minds to the government, they become easy prey for demagogues and dictators.

Once we concede the legitimacy of “nudging,” nudges will inevitably escalate. Over time, libertarian paternalism will become less “libertarian” and more “paternalistic.” The government that initially nudges you to save 5% of your income may next nudge you to save 25%. Or buy more vegetables. Or drive fewer miles. And once a default is set, government could make opting out increasingly difficult, then impossible.

Nudges will also become juicy prizes for lobbyists. If General Motors needs a bailout, perhaps Americans should be “nudged” into buying a new GM car every two years. Of course, we wouldn’t be forced to buy them. The government would still allow us to buy a Toyota — if we filled out the right paperwork.

“Nudge” supporters presuppose that one of the proper functions of government is to tell adults how they should be spending their time, energy, and money — i.e., how to live. That is completely wrong. The proper function of government is to protect individual rights. Unless we violate others’ rights by force or fraud, the government should leave us alone to pursue our own lives and happiness according to our best rational judgment.

Of course, it’s entirely legitimate for individuals to voluntarily “nudge” themselves to achieve their long-term goals. Parents saving for their kids’ college expenses might have their bank automatically deduct a portion of their paychecks into a separate account, thus removing the temptation to spend that money now. A dieter might put the chocolates in the back of the pantry to put them out of mind.

But an individual must make these choices for himself, based on his rational assessment of his needs and goals. These choices are his responsibility — and his right. The government cannot and should not be making those choices for him. Government should never tell Americans to choose between slavery and freedom, with slavery as the default but an option to select freedom. The only proper function of government is to protect our freedoms.

Every child knows that if you let a schoolyard bully get away with one seemingly harmless “nudge,” he will then escalate into shoving, then punching, then regular beatings. At least the bully doesn’t pretend that the first nudge is for the victim’s own good. The new nudgers actually believe that “they’re from the government and they’re here to help us.” If we listen to them, then the final joke will be on us.