Libertarian Paternalism

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1.Introduction. Discussions always arise when the two topics “nudges” and “libertarian paternalism” are mentioned. These topics have also become more popular in the recent years. First, it is important to understand the definition of the two terms. According to Richard Thaler and Cass Sunstein (Nudge – Improving Decisions about Health, Wealth and Happiness,2008), a nudge is “any aspect of the choice architecture that alters people’s behavior in a predictable way without (1) forbidding any options or (2) significantly changing their economic incentives.” Libertarian paternalism is “the idea that it is both possible and legitimate for private and public institutions to affect behavior while also respecting freedom of choice, as well as the implementation…show more content…
First of all, some economists are in favor of the application of libertarian paternalism. Their goal is to defend this concept by saying that it is an approach that ensures freedom of choice and at the same time allows institutions to push them in a certain direction. The approach of libertarian paternalism is being used by the government to affect people’s choices to improve their well-being. It is also closely related with nudges. Thaler and Sunstein also talk in their book about the nudges theory as “a concept in behavioral science, political theory and economics which proposes positive reinforcement and indirect suggestions to try to achieve non-forced compliance to influence the motives, incentives and decision making of groups and individuals.” It is being used in UK, USA, Australia, etc. Even asymmetric paternalism has been used to help people from making decisions that are harmful to them. Most of the time, even though information about the consequences of a decision is given, it doesn’t stop people from still making that decision. So asymmetric paternalism uses another method. It exploits the same biases that ordinarily contribute to self-harmful behavior instead to promote healthy…show more content…
On the other hand, some people oppose this point of view by saying that there are misconceptions, false assumptions and contradictions on this term. The term of nudging itself provided by Thaler and Sunstein and its relation to incentives and libertarian paternalism is not clear. It is difficult to tell apart what counts as nudging and what doesn’t. The approach of libertarian paternalism says that it is not encouraging people to make a certain choice. However, in some cases, people are uncertain about their preferences and do not have a clear understanding of the situation. So, they are in fact easily influenced by institutions without even realizing. It is in a way manipulating their decisions. Even nudging has been sparking discussions. Tammy Boyce, part of The King's Fund, who works in the public health foundation, has said: "We need to move away from short-term, politically motivated initiatives such as the 'nudging people' idea, which are not based on any good evidence and don't help people make long-term behavior
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