Thaler and Sunstein’s Nudge and the Spread of Libertarian Paternalism

Richard Thaler and Cass Sunstein’s Nudge seems to be grabbing a lot of attention, including Barack Obama’s and David Cameron’s.

“There can be a rather pious approach to it all, which I find off-putting,” she said. “What I like about the Wattson is that it just tells you what you are using. It’s not trying to make you feel guilt. I’m a great one for carrots, not sticks.”

That is a theme whose time has come, according to David Cameron. While Gordon Brown bludgeons us with top-down targets, on-the-spot fines and endless regulation, the Conservative leader wants to adopt a subtle new approach: the power of “social norms”, a phenomenon making waves thanks to a book called Nudge, which is published in Britain this week.

At the heart of social norms, Cameron says, is the idea “that one of the most important influences on people’s behaviour is what other people do”. The majority, it seems, don’t want to be very different from those around them.

Instead they want to belong, and they want to be on the side of the good guys. Give them proper information about the acceptable norm, plus a gentle push in the right direction, and they will change behaviour of their own accord.

The ideas have been mooted before, but some behavioural economists believe the potency of this phenomenon has been underestimated. Now leading politicians, such as Barack Obama, the Democrat candidate for the US presidency, are taking an interest.

Cameron appears to have taken the ideas to heart. “We’ve got to stop thinking that if government tells people what to do, they’ll do it,” he said in a speech earlier this month. “Instead we’ve got to harness the power of social norms to bring about social change.”