I recently wrote a piece describing the band Tool, arguing that we often prefer our short-term desires at the cost of our true desires. This, of course, is widely known by theologians, psychologists and philosophers. But economists are just catching on, and politicians are far behind. The ultimate question is, do we really want what we want? The question influences public policy in numerous ways.
Slavov Zizek writes,
The large majority – me included – wants to be passive and rely on an efficient state apparatus to guarantee the smooth running of the entire social edifice, so that I can pursue my work in peace. Walter Lippmann wrote in his Public Opinion (1922) that the herd of citizens must be governed by “a specialised class whose interests reach beyond the locality” – this elite class is to act as a machinery of knowledge that circumvents the primary defect of democracy, the impossible ideal of the “omni-competent citizen”. This is how our democracies function – with our consent: there is no mystery in what Lippmann was saying, it is an obvious fact; the mystery is that, knowing it, we play the game. We act as if we are free and freely deciding, silently not only accepting but even demanding that an invisible injunction (inscribed into the very form of our free speech) tells us what to do and think. “People know what they want” – no, they don’t, and they don’t want to know it. They need a good elite, which is why a proper politician does not only advocate people’s interests, it is through him that they discover what they “really want.”
If we accept Zizek’s argument, which I do, the question then becomes, “who, or what, should shape our decisions.” The question was raised recently by Cass Sunstein and Richard Thaler in their wildly popular book, Nudge. They argue that people are better off if the government “nudges” people towards the right decision. For example a nudge might make the organ donor option an opt-out rather than an opt-in, dramatically increasing donor rates and saving lives. While such moves are uncontroversial, newer “nudges” are.
Mayor Bloomberg may well be the nudger-in-chief. His newest smoking proposals are rather controversial. He proposes requiring stores to put cigarettes out of sight. He proposes further,
He also proposed a second bill that would raise penalties for retailers who evade tobacco taxes by selling smuggled cigarettes, prohibit them from redeeming coupons and require them to sell cheap cigars and cigarillos in packs of at least four. It would also create a minimum price of $10.50 per pack for cigarettes and little cigars, as a further disincentive to smoke.
What’s surprising is that many smokers actually approve of such measures.
Two weeks ago I cited research by Steven Rhodes, who discovered that most smokers favour stronger restrictions on smoking. Russians, for example, widely supported legislation to ban smoking in public. Their rational self wants the government to protect them from their impulses. Recent research supports this conclusion: Abel Brodeur of the Paris School of Economics finds that smoking bans not only save lives, they increase utility. They help chronic smokers control their impulses and make spouses happier. While Mayor Bloomberg’s proposal may seem insignificant, I expect it to actually have an impact. Critics, like Mr. Jim Calvin argue, “I’m disputing the far-fetched assumption that because young people see a product in a store, the sight of it compels them to start smoking.” He’s really dodging the question.
If someone is trying to quit smoking, seeing a pack of cigarettes will begin to wear down will power, and Roy F. Baumeister has developed some ingenious experiments to show how weak we truly are. When their will is fatigued, individuals are far more likely to engage in deleterious or anti-social behavior. Anyone who has ever tried to diet knows how much harder it is to avoid a doughnut prominently displayed before them.
In many ways this idea is in a sense, profoundly undemocratic. In some cases, however, such “libertarian paternalism” may be warranted. Smokers and obese people impose heavy costs on others, and themselves. Their “choice” to light up is anything but, and most would prefer to quit.
Many of us are unaware how important organ donorship is, and misunderstand the process (some people, for instance, think a doctor will be aware of their donor status and treat them differently, which is untrue). Thus mandating an opt-out system can save lives. Many people misunderstand saving for retirement, so making the default option to put aside a larger portion of their income would make them happier. In these cases, there is no “default option,” either way, we incentivize behaviour. The question is which behaviour to incentivize.
Bloomberg’s smoking proposals will be moderately successful. The moves make it easier for smokers who wish to stop smoking to quit and harder for young people to begin smoking in the first place. It’s the quintessential case of the government acting in our real, rather than perceived interests.