The Dark Side of Nudging: The Ethics, Political Economy, and Law of Libertarian Paternalism

Libertarian paternalism, as advanced by Cass Sunstein, is seriously flawed, but not primarily for the reasons that most commentators suggest. Libertarian paternalism and its attendant regulatory implications are too libertarian, not too paternalistic, and as a result are in considerable tension with ‘thick’ conceptions of human dignity. We make four arguments. The first is that there is no justification for a presumption in favor of nudging as a default regulatory strategy, as Sunstein asserts. It is ordinarily less effective than mandates; such mandates rarely offend personal autonomy; and the central reliance on cognitive failures in the nudging program is more likely to offend human dignity than the mandates it seeks to replace. Secondly, we argue that nudging as a regulatory strategy fits both overtly and covertly, often insidiously, into a more general libertarian program of political economy. Thirdly, while we are on the whole more concerned to reject the libertarian than the paternalistic elements of this philosophy, Sunstein’s work, both in Why Nudge?, and earlier, fails to appreciate how nudging may be manipulative if not designed with more care than he acknowledges. Lastly, because of these characteristics, nudging might even be subject to legal challenges that would give us the worst of all possible regulatory worlds: a weak regulatory intervention that is liable to be challenged in the courts by well-resourced interest groups. In such a scenario, and contrary to the ‘common sense’ ethos contended for in Why Nudge?, nudges might not even clear the excessively low bar of doing something rather than nothing. Those seeking to pursue progressive politics, under law, should reject nudging in favor of regulation that is more congruent with principles of legality, more transparent, more effective, more democratic, and allows us more fully to act as moral agents. Such a system may have a place for (some) nudging, but not one that departs significantly from how labeling, warnings and the like already function, and nothing that compares with Sunstein’s apparent ambitions for his new movement.

Letter from the Secretary of War, transmitting a return of the arms and military stores furnished to the respective states, under the provisions of the law of one thousand eight hundred and twelve.

At head of title: [107].

Letter from the Secretary of War, transmitting a return of the arms and military stores furnished to the respective states, under the provisions of the law of one thousand eight hundred and twelve

At head of title: [107]. 15th Congress, 1st session, 1817-1818. House. February 20, 1818. Read, and ordered to lie upon the table.

Commentaries on the law of municipal corporations

UANL

The law of psychic phenomena : working hypothesis for the systematic study of hypnotism. spiritism, mental therapeutic, etc.

UANL

The law and economics of good faith in the civil law of contract

Good faith plays a central role in most legal systems, yet appears to be an intractable concept. This article proposes to analyse it economically as the absence of opportunism in circumstances which lend themselves to it. One of the objectives underlying the law of contract on an economic view is to curtail opportunism. In spelling out what this means, the paper proposes a three-step test: bad faith is present where a substantial informational or other asymmetry exists between the parties, which one of them turns into an undue advantage, considered against the gains both parties could normally expect to realise through the contract, and where loss to the disadvantaged party is so serious as to provoke recourse to expensive self-protection, which significantly raises transactions costs in the market. The three-step test is then used to analyse a set of recent decisions in international commercial transactions and three concepts derived from good faith: fraud, warranty for latent defects and lesion.

A treatise on the law of evidence

UANL

Commentaires on the law of municipal corporations

UANL

The Law and Economics of the Civil Law of Mandate

Présentation à la Annual Law & Economics Conference 2007, Université de Bologne.

The book of nature

UANL

The Civil Law Of Contract

Cet article sera publié dans Ghent Encyclopedia of Law and Economics, Gerrit De Geest (General Editor), 2nd edition, Cheltenham, Edward Elgar, 2010.