A Critical Assessment of Libertarian Paternalism

This paper tries to assess to what extent libertarian paternalism lives up to its libertarian credentials, and whether this “softer” version of paternalism is more or less desirable than the traditional, more coercive (but also more transparent) form. Since much is made in the libertarian paternalistic programme of the ease of reversibility of “nudges,” it is argued that the distinction between effective and nominal ability to reverse a nudge is more important than its theoretical ease of reversibility—the more so, if anchoring, framing and status quo bias are as powerful as the libertarian paternalists maintain. If the libertarian paternalistic nudges are effective, but not always transparent, it is argued that this raises some questions (which do not seem to have been adequately addressed in the current literature) about the legitimacy of the interventions; about how the true preferences of the “consumer” can be guessed by the choice architect (and the role played by rationality in this process) and about the effective respect of her autonomy. Finally, this paper highlights some alternatives to “nudging” which place a greater emphasis on the full process of choice—rather than just on its outcomes—and can therefore better preserve true autonomy of choice.