Supernanny insists you have the right to opt out

27th October, 2007

FT Comment, 27 October
An economist once dubbed “champion of choice” by The Guardian newspaper would like your employer to organise an exercise hour for you and your colleagues. Professor Julian Le Grand was once a social policy adviser who had the ear of Tony Blair.

Now he has everybody in Britain sitting up (sorry) and taking notice. Even though Prof Le Grand intends to offer an opt-out to anyone who doesn’t much care for the idea of doing a bench-press with the boss as spotter, that doesn’t make the idea appealing.

Prof Le Grand – who emphasises that these are just ideas for discussion – has also suggested a ban on salt in processed foods and on the sale of cigarettes except to holders of a smoker’s permit. That permit would cost £200 and require a doctor’s signature.

Most worryingly of all, he has been observed brandishing the best oxymoron since “military intelligence” – “libertarian paternalism”.

An unsympathetic reading of all this is that a respected policy wonk has lost the plot. But the professor’s prescriptions – and the libertarian paternalist philosophy behind them – make more sense than you might think. He is not crazy. He is just wrong.

Behind all three schemes lies the same idea: to influence behaviour without restricting choice. If you want salty food, you can add salt. If you do not want to do jumping jacks with your colleagues, just sign the excuse note. If you want to buy cigarettes, no problem – just sign up for the smoker’s permit. The £200 fee and the doctor’s signature, admittedly, take that particular proposal rather a long way from libertarianism. But the heart of the idea is the permit, not the fee or the doctor’s note. It could be free to any adult.

In each case, the state hopes to guide our choice, hence “paternalism”. In each case, the final decision is our own, hence “libertarian”.

Libertarian paternalism makes some sense because we make different decisions in the short term than in the long term. You flush the cigarettes down the lavatory, vowing not to make a widow of your spouse and, before you know it, you have popped out to the corner shop to buy another pack of Marlboros. Who could not sympathise with your better, more patient self’s desire to quit? If Prof Le Grand gets his way, it could not be easier for the state to help. Just rip up your smoker’s card. If you do not want to quit, that is your choice – hold on to the permit.

It is not only the smoker who allows her impatient self to get the upper hand. In one psychological experiment, participants were offered a choice of different films, some with cultural pretensions and others with mass appeal. Whether the subjects chose something highbrow, such as Three Colours: Blue, or something lowbrow, like Mrs Doubtfire,depended on whether the film was to be watched immediately or in a couple of weeks. (Having chosen to watch Three Colours: Blue in a fortnight’s time, the subjects reversed their choice if offered Mrs Doubtfire at the last minute.)

Perhaps Prof Le Grand should take charge of Blockbuster Video to ensure that my profound desire to appreciate the magnitude of Krzysztof Kieslowski’s achievement is not frustrated by my superficial urge to snigger at Robin Williams in a dress.

But hang on. My choice of film should be no business of the government. That is true whether I am a hyper-rational utility-maximising agent or whether I am a weak-willed creature of flesh and blood. The word “libertarian” is being used carelessly here. Libertarianism is not a statement about a free choice between salty and salt-free food. Libertarianism is a philosophy that states that the government should keep its nose out of my affairs unless I invite it to get stuck in.

The libertarian paternalism programme can boast some real achievements. Studies have shown that making people opt out of contributing to a company pension rather than opt in almost doubles the enrolment rate. More important, it seems to motivate people to make exactly the contributions they always wanted to make, but more quickly.

But it is not usually so easy to identify what people really want, nor guide them to it so unobtrusively. That means that libertarian paternalism is a licence for the government to second-guess my desires and to employ a new army of persuaders and regulators to change my behaviour to something more acceptable.

If a new softer paternalism makes the government’s influence harder to spot, that is hardly an unmixed blessing. Ed Glaeser, a Harvard-based economist, is right to point out that it is not only smokers, film buffs and couch potatoes who make mistakes. Civil servants and politicians do, too. Just because we are sometimes foolish does not mean that the government is any wiser.

Perhaps these objections are churlish. The British government has already banned smoking in private clubs populated only by consenting adults. It is also confused over the difference between global warming, which is the result of a collective- action problem, and obesity, which is not. The choice is not, it seems, between freedom and libertarian paternalism. It is between libertarian paternalism and the Supernanny state.

So I suppose you can sign me up for the libertarian paternalism programme as the lesser of two evils. What’s that? I’m already signed up, by default? That figures.

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