Many have written here at C4SS about how our choices are artificially limited under the current system, as have many anti-capitalists throughout history. This often leads our critics to brand us as political malcontents, full of complaints about the ills of capitalism but ultimately unable to offer a satisfactory alternative that fixes our current problems.
In some cases I have to concede that this is a valid criticism, as sometimes the solutions we radicals propose just straight up don’t address the problems we aim to solve or are fundamentally limited in their impact. This is an issue amongst proponents of markets as well, as we sometimes make sweeping assumptions about human decision-making ability in our pursuit of decentralization; in one moment we might assume the infallibility of the consumer in a freed market, in another we may assume the unwavering selflessness of non-capitalist firms, both pitfalls our critics could use against us.
Drawing from the work of “mainstream” economists occasionally helps to break these rhetorical habits, assuming we take advantage of the radical implications of their arguments. Nudge: Improving Decisions about Health, Wealth, and Happiness is a work that contains some of that potential.
A soft manifesto for what Richard Thaler and Cass Sunstein call “libertarian paternalism,” Nudge attempts to reconcile the demands of free-marketers and progressives by proposing a series of “Nudges,” choice-preserving alterations in consumers’ available options, to make people “better off.”
Key to the authors’ position is the concept of “choice architects,” people who have “the responsibility for organizing the context in which people make decisions.”
If you design the ballot voters use to choose candidates, you are a choice architect. If you are a doctor and must describe the alternative treatments available to a patient, you are a choice architect. If you design the form that new employees fill out to enroll in the company health care plan, you are a choice architect. If you are a salesperson, you are a choice architect (but you already knew that).
This observation should sound familiar, as most libertarian perspectives (both left and right) are informed by a recognition of how our actions can be influenced by entities in charge of arranging our options as consumers. We see this behavior within governments, corporations, schools, and any other hierarchical organization that involves the deliberate manipulation of individuals’ available options. The core of our disagreements lie in how we think those “choice architects” should behave; Thaler and Sunstein consistently hold that people in this position have an obligation to rearrange consumers’ available options to make them “better off, all things considered,” arguing that such behavior preserves freedom of choice and improves people’s lives.
My intent isn’t to endorse Thaler and Sunstein’s conclusions, in fact I think they’re worth dismissing entirely. In effect, their general proposal isn’t libertarian in any meaningful sense and ultimately should be rejected as an attempt to reconcile two dangerously myopic perspectives — liberal paternalism and a centre-right conception of “free choice.”
That being said, the book does have its shining moments. The first section, “Humans and Econs,” addresses the numerous ways that real human beings behave differently than the perfectly rational “econs” present in many models and axioms used by economists. The authors make a point of emphasizing the importance of “defaults” in guiding behavioral trends. Defaults, an option or set of options that “will obtain if the chooser does nothing,” constitute the path of least resistance, hence they usually become the most commonly chosen option. Thaler and Sunstein argue that defaults are ubiquitous, powerful, and unavoidable in any system involving choice architecture; this is reinforced, the authors continue, if these options are presented as the “normal” course of action:
When you download a new piece of software, you will often have numerous choices to make. Do you want the ‘regular’ or ‘custom’ installation? Normally, one of the boxes is already checked, indicating it is the default. Which boxes do the software suppliers check? Two different motives are readily apparent: Helpful and self-serving. In the helpful category would be making the regular installation the default if most users will have trouble with the custom installation. In the self-serving category would be making the default a willingness to receive emails with information about new products. In our experience, most software comes with helpful defaults regarding the type of installation, but many come with self-serving defaults on other choices… [Note] that not all defaults are selected to make the chooser’s life easier or better.
The underlying force behind the defaults, in some sense, controls the general direction of the invisible hand. While single individuals probably won’t find themselves in a position where they alone can influence the behavior of large groups of people, assuming anarchic conditions, there is always going to be some means by which available options are arranged, and within that arrangement may exist deliberate paths of least resistance or purely accidental defaults.
In the case of market actors, the application of this concept is simple. Drawing from the previous example from Thaler and Sunstein, firms may act selfishly or in the interests of consumers, influencing the ways in which they enable their customers to make choices (how they allow you to compare services, how they present payment plans, what products
they advertise first, etc.). If we understand which types of default options enable consumer autonomy and minimize the influence of individual firms, then we can explain our general vision of post-capitalist organizations more clearly.
Though institutions in a freed market are obviously worth considering, the role of defaults and choice architecture on the consumer end is equally important. Assuming truly anarchic conditions, it’s fair to assume that most people will have a large range of options for most goods and services and will likely have a greater degree of bargaining power in whatever marketplace they inhabit. In searching for the best provider, however, there has to be some mechanism by which to easily compare options.
People certainly will use search engines, but how are the results going to be organized? Which links are going to get to the front page, and what’s going to happen to the sites that don’t get the same amount of traffic? Even if we leave the digital realm, the problem persists in any situation where multiple producers coexist. In a hypothetical farmer’s market, for example, a baker near the entrance might have more customers than a florist on the other side of the market; no matter how the order of the shops was decided, defaults will exist, and the behavior of customers will generally be informed by those paths of least resistance.
The influence of default options will persist even in the absence of human “choice architects,” as the problem doesn’t arise from human error on the part of architects, but as a consequence of genuine freedom of choice. Lots of people sometimes don’t partake in the act of choosing at all, if Thaler and Sunstein’s sources are to be believed, but that inaction doesn’t necessarily mean nothing will happen. If anything, the opposite is true: something usually does happen when we abstain from making certain choices, often by the will of entities which seek to benefit from our tendency to do what requires the least effort.
While a “libertarian paternalist” would advocate for the deliberate manipulation of defaults for the purposes of social engineering, I think it’s in our best interests as anti-authoritarians to use this knowledge to oppose such efforts. A key element of preserving autonomy is dismantling the means of social control that currently exist, but we also need to consider how these coercive structures might be sustained in a stateless society. By acknowledging the existence of choice architects, we can create counter-incentives that limit the ability of individuals to deliberately alter behavioral trends, allowing us to create a more sustainable vision of a genuinely liberated economy.
My goal in writing this piece is to start a dialogue about the role of choice architecture and defaults so we can more effectively realize our general vision of a post-capitalist economy. I don’t want people to come away from this with the assumption that I’ve written a comprehensive introduction to the core concepts of Nudge, and I definitely don’t want this to be the end of the conversation surrounding these concepts. There are folks at the Center much better equipped to approach this subject than I am, and I sincerely hope more people start talking about this.
If we want our ideas to last, we have to acknowledge that people are imperfect, our choices are limited by subconscious biases, and we often lead ourselves to make bad decisions. None of this is reason to think we can’t have control over our own lives, but it is a challenge we have to address in good faith. Embracing everyone’s limits is necessary to make the case for everyone’s freedom.