Nudge: Improving decisions about Health, Wealth and Happiness
Richard Thaller and Cass Sunstein
Yale University Press, 293pp, £18
A story in the Guardian a few weeks ago contained intriguing hints of what gets David Miliband’s goat. Explaining the foreign secretary’s decision to pen an article widely interpreted as a mini-manifesto for a future Labour leadership contest, the piece claimed: ‘Miliband himself was furious about an article by the shadow chancellor George Osborne earlier this month that he regarded as vacuous, adding to his sense that the Tories were not being challenged.’
The article in question saw Osborne praising Nudge, a much-discussed new book by American academics Richard Thaler and Cass Sunstein laying out a theory of ‘libertarian paternalism’. It has fast become this year’s wonky must-read.
Why the hype? Thaler and Sunstein discuss breakthroughs in behavioural economics and psychology. These, they claim, provide politicians with a range of ingenious new wheezes to ‘nudge’ citizens into changing their behaviour. This academic circle-squaring is illustrated with plenty of neat examples, such as opting people into pension schemes to encourage saving and putting smiley faces on electricity bills to encourage energy efficiency. And all of this without resort to illiberal prohibitions, or irritating nannying.
The book is both readable and fascinating. Its vision of a state delicately able to massage away social problems without nasty heavy-handedness is understandably politically attractive. But eye-catching examples explaining how ‘choice architects’ can quietly manipulate the masses don’t fully explain why Thaler and Sunstein have captured the moment.
Two factors help explain. First, Nudge taps into cross-party concerns about behaviour. A range of pressing issues are fundamentally unsolvable without persuading citizens to eat less, exercise more, drink responsibly, drive sparingly, cut down on smoking, and so on. The stakes are high. Without behaviour change the NHS will go bust, the pension system insolvent and the planet under water. But it’s all easier said than done – hence why an analysis claiming to provide seemingly magic solutions to intractable problems gets people excited.
Second, the book hits a nerve because of an unresolved political debate about the role of the state. Osborne’s article claimed Nudge’s notions for the right, and both he and David Cameron claim nudge-like interventions as part of their new vision of a ‘post-bureaucratic age’ – a half-thought-through but nonetheless intriguing vision of a leaner, technologically-enabled state, relying much more heavily on the private and third sector.
Implicit within this idea, and also within Nudge’s distaste for excessive paternalism, is a criticism of the reality of the state under Labour. This government has beaten back those who argued for rolling back its frontiers. They have also forced Conservatives to campaign on progressive ground, pledging awkward fealty to the NHS, poverty reduction and social justice. But Labour has failed to respond adequately to growing concern about a state that remains too distant, too disengaged, and too unresponsive to the demands of its citizens.
So was Miliband right to describe nudge-like ideas as vacuous? Yes and no. Some of Osborne’s specific ideas for putting libertarian paternalism into practice don’t stand up to close scrutiny. But it is undeniable that the right have been more open to a vision of the state that seeks to use information to empower citizens. This matters because, if anything, the critical reaction to Nudge has underplayed the potential of a future ‘information rich’ vision of the state.
For sure, nudge-like interventions don’t always work. They aren’t always as effective in changing behaviour as, say, fast-rising petrol prices or cigarette bans. But, in its defense, ideas exploring how public services can better use information to help change behavior have barely begun to be explored.
Going to see your local GP remains a fundamentally disempowering experience, with shockingly little information provided before, during and after a visit. Parents who want detailed information about their children’s progress in school can’t get it.
Just as Nudge highlights disquiet with the managerialist state, so it suggests a new vision of a state providing high quality, useful information to its citizens. Companies like Amazon show how organizations can take information about their users, and provide it back to them in helpful ways. Britain’s schools, hospitals, and job centres should be able to do the same.
The real problem, then, becomes one of equity. Policies designed to provide better information are most likely to persuade those at the margin. These are unlikely to be from hardest to reach, disadvantaged groups. Indeed, the Conservatives tacitly admitted this recently when Michael Gove portrayed an eminently sensible but ultimately traditional scheme to expand the number of state-provided health visitors as a means of ‘nudging those who would benefit towards the services that Sure Start provides’.
A conservative vision of the state that relies only on information provision will be half complete. But a progressive vision of the state that doesn’t put serious effort into developing innovative, rich forms of information for its citizens – and provide them with a means of sharing information between themselves – will be just as poor. To this extent, Nudge gives glimpses of a future information rich state that both Cameroons and progressives can support.