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Written by Ore-Oluwa Fayemiwo
Behavioural Economics is one of the many subdisciplines of economics, combining psychological factors with the decision-making procedures involved in economic principle. Unlike conventional economics assumes, this branch of economics takes into consideration the fact that the choices that individuals make are not always rational and that we do not always exhibit behaviour that is in our best interest (or even in the interest of society as a whole). So, how exactly do we make better decisions for ourselves? What steps are necessary for us to take in order to make optimal decisions? In this article, not only will I be answering these questions, I will also be safeguarding the concept of libertarian paternalism.
First of all, we need to be sure of what libertarian paternalism is. As mentioned above, we as individuals do not always make optimal decisions and that is simply because we are not very good at doing so. For the most part, we lack self-control, focusing on the short-term benefits instead of what actually matters: the long term effects of our actions. It is for this reason that we must be ‘nudged’ in the direction of making these better choices when it comes to crucial situations. This usually comes in the form of intervention from authorities, whether they be from public or private institutions (such as the government and private companies). Paternalism implies that these institutes take on a “fatherly” role, encouraging members of society to make well-informed decisions rather than quick and ill-considered ones. A libertarian position, on the other hand, advocates an individual’s right to freedom of choice despite the fact that this could potentially result in negative outcomes. Academics such as Richard Thaler and Cass Sunstein have argued that there can actually be elements of both involved for the decision-making process. This is what we know today as libertarian paternalism.
There are two common misconceptions about paternalism. One being that there are practical alternatives to it, such as budging and shoving (which are not at all simple interventions to use). The other, more important misunderstanding is that there is some form of coercion involved. As Thaler and Sunstein have clearly outlined in their writings, this view is incorrect.
For instance, if a group of speakers were to be invited into a secondary school to inform their Year 10 and Year 11 students about the negative externalities associated with and surrounding the consumption of illegal drugs and alcohol (whilst possibly including their own experiences if any), their intentions would be to guide them on a path of deterrence; one that steers clear from any trouble. In this scenario, the information being provided by the speakers are ‘nudges’ because whilst the advice is genuinely to benefit the students, it should not be forgotten that these students are also at liberty to ignore these nudges if they wish; whether they choose to follow or ignore what has been shared with them is ultimately their own choice.
Currently, in the United Kingdom, it is easy to recognise the many interventions that the government has put in place because of motivations driven by paternalism in our everyday lives. From the never-ending warnings about wearing seatbelts to the banning of particular drug substances, we can appreciate that these rules were put in place for our own wellbeing! However, if we look back at the previous example, we can acknowledge that some students will unfortunately choose to ignore the advice shared with them most likely due to their young age and ignorance they clutch onto, inevitably leading to health issues in the long run if they fail to quit. For situations such as this, it is fair to say that perhaps the strength of paternalism is not firm enough and that the regulations regarding alcohol are far too lenient. Others may disagree and argue that it is better for such regulations to remain the same so that individuals can maintain their liberty without fear of authority and without that same authority taking advantage of their powers.
Moving away from such domestic issues and onto more global and pressing ones, we can all agree that paternalism should be far more drastic and dramatic than it currently is. Considering human action and the effects of it on the environment, we cannot deny the horrific circumstances that we have left marine life to.
Cambodia, being less developed than the UK, naturally has less resources and less opportunities to tackle environmental issues. The overuse of plastic and its presence in Cambodian oceans makes it almost impossible for marine life to survive, let alone to thrive. In 2010, approximately 87% of the country’s plastic waste was inadequately managed, highlighting the drastic effects of plastic in their oceans (even when the government had been relatively strict about Solid Waste Management (SWM)).
Inadequate waste management, being one of the key factors that plays a massive role in the dramatic volumes of plastic entering these oceans, was investigated by Fauna & Flora International (FFI) in 2018. Their investigation revealed that almost ⅓ of household waste from one island community consisted of plastic and that an astonishing 96.5% of household waste (both plastic and non-plastic) was then disposed of into the oceans or onto the shoreline. The nudges considered to alleviate the effects of plastic waste for the nation included reducing the use of plastic (especially in coastal communities), improving residual management and to take on opportunities that promote more of a circular plastic economy (i.e reducing, reusing and recycling).
Although these nudges are ideal, they are not so easy to implement due to the weakened forces of paternalism. If authorities were so strict and serious about the issue, there wouldn’t be such a problem surrounding plastic waste in our oceans. Therefore, in this case our liberty should be overcome by paternalistic notions in order to sustain the planet.
To conclude, libertarian paternalism should not be viewed in a negative light! Instead, we should come to understand that nudges and paternalistic measures are sometimes deemed unnecessary in domestic circumstances. However, it is only fair to agree that our liberty should be shelved when it comes to the protection of our planet and the environment around us that we are responsible for.
Photo by Volodymyr Hryshchenko on Unsplash