Response to Mark Schmitt

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December 17, 2009

Alan Wolfe, Professor of Political Science, Boston College

Let me say how grateful I am to Mark Schmitt for taking my argument seriously and responding to it so thoughtfully. He is one of the smartest DC political junkies around.

Incipient totalitarianism? Hardly. I though I had a catchy title with “All Power to the Choice Architects.” I was not aiming to compare Cass Sunstein, one of the most independent-minded and subtle thinkers of our time, to Lenin.

Wolfe and Schmitt engage in a dialogue
about Wolfe’s
recent essay critiquing
libertarian paternalism.  Read Schmitt’s
original response to Wolfe.

But I do worry more than Sunstein, and more than Schmitt as well, about the “hidden persuader” aspects of behavioral economics. The retirement options or mortgage tax credit policies Mark cites are not very problematic, and I for one would be strongly in favor of opt-out rather than opt-in pension plans. But there is no greater obstacle to a robust liberal agenda in the U. S. today than public skepticism toward government. Perhaps nudging people will help liberalism, because the public role in any new programs would be diminished and therefore attract less attention. More likely, though, is that the public may become even angrier at government when those who hate government use election campaigns to show how manipulative such programs are. We may be better off with a flat-out endorsement of government than public programs that rely on private incentives.

Mark is right to say that we already rely on private incentives, and he is equally right to say that some public programs–think economic stimulus–have to be big and bold. We can’t nudge our way to health care, he says, and I agree. But the need for big and ambitious public programs is overwhelming. Compared to the United States that overcame a depression and fought a world war, we are now destroying our environment and not rebuilding our infrastructure. I can remember no period in my lifetime during which my country needed so much and was getting so little. There are so many things to be done–huge, bold things– and here we are with political institutions that can barely function and politicians unable to overcome the pettiest of motives.

In short, while behavioral economics may have an insight or two, this is the worst possible time to be relying upon it. The fact that we are says much about the gap between what we need and what we have. Liberalism ought to be expanding, not contracting. For that to happen, we need the sense of collective public purpose upon which behavioral economics looks with such suspicion.