Our Nudge in Chief

The radio talk-show host Glenn Beck has named Cass Sunstein, a professor at Harvard Law School, “the most dangerous man in America.” Given the number of men currently serving life sentences or sitting on death row for serial murder or terrorist acts, not to mention the fugitives on the FBI’s most-wanted list, this is quite a charge. In his own defense, Sunstein, undoubtedly the most prolific legal scholar in the United States, has collected 11 of his most controversial articles—on subjects as diverse as conspiracy theories, climate change, same-sex marriage, animal rights, and “new progressivism”—in one volume, Conspiracy Theories and Other Dangerous Ideas. The first sign that these writings might not be so dangerous is their provenance. They originally appeared in such journals as the Stanford Law & Policy Review, The Journal of Political Philosophy, the Harvard Law Review, and The Journal of Legal Studies. Then again, one is drawn from a book titled The Behavioral Foundations of Public Policy.

What could have inspired Beck’s assessment? Sunstein served in the Obama administration, but he’s not especially liberal. In Conspiracy Theories, he defends free markets and criticizes “command and control” planning. He favors soft government interventions like warnings and default rules, which leave people freedom of choice, over outright bans on dangerous behavior. He questions minimum-wage laws and argues that the United States has no particular obligation to enter into climate-change agreements that might impose domestic burdens even if such moves were to benefit the rest of the world. He does call for a social safety net for the poor, protections against animal cruelty, and, disturbingly, government subterfuge to counteract conspiracy theories. But if this is the most dangerous man in America, we can drastically reduce our homeland-security spending right now.

In fact, Sunstein often seems to go out of his way to avoid controversy. He is careful, deliberative, and painstaking. He favors “minimalism,” by which he means taking small steps and resolving disputes narrowly. He distrusts bold measures and central planning because he worries about unintended consequences. And he is virtually always ready to identify counterarguments, not simply to knock them down but to credit them for raising important caveats and concerns. These are all good qualities in a lawyer and a law professor, to be sure, but it’s a good bet that he won’t be leading a revolution anytime soon. In 2012, Sunstein stepped down from a government position that might best be called “chief bureaucrat.” As the man in charge of the Office of Information and Regulatory Affairs, he reviewed, and in many cases rejected, regulations and rules proposed by the nation’s administrative agencies. This is not a post from which one could pose much danger. Nor, the last time I checked, is a Harvard Law School professorship.

Sunstein’s current overarching project is the opposite of revolutionary. He seeks to tame our impulses and intuitions, to counteract the irrational and emotional errors we often make, in order to help us reach better decisions through deliberation and rational thinking. (Of course, to a fiery talk-show host, that may be precisely what makes him so dangerous.)

For roughly the past 15 years, Sunstein has sought to apply the lessons of behavioral economists to difficult legal and policy questions. Their findings have shown what most of us already suspected—that the “rational actor” upon whom classical economics is based is a myth. In reality, people’s decisions are determined not by careful comparison shopping and cold, calculated reason, but by emotions, fears, unwarranted confidence, aversion to loss, acute susceptibility to peer influences, and all sorts of other cognitive biases. In Conspiracy Theories, as well as another new book, Why Nudge?, Sunstein maintains that such insights can assist us in resolving a variety of social problems.

Drawing on Daniel Kahneman’s Thinking, Fast and Slow, Sunstein explains that our brains essentially have two “cognitive systems”—helpfully called System 1 and System 2. System 1, in Sunstein’s words, is “emotional and intuitive. When it hears a loud noise, it is inclined to run,” and it won’t say no to temptation: “It certainly eats a delicious brownie.” System 2, by contrast, “is deliberative. It calculates. When it hears a loud noise, it assesses whether the noise is a cause for concern … It sees a delicious brownie and makes a judgment about whether, all things considered, it should eat it.”

The goal of much of Sunstein’s work is to identify ways to counteract the impulsive influences of System 1 when they lead us astray. If people are inclined to overlook the consequences of certain behaviors, for example, he suggests that the government require warnings and disclosures—such as fuel-economy labels on cars and calorie information on restaurant menus. Because irrational tendencies to focus on the short term and to procrastinate dissuade us from saving for retirement, Sunstein advocates default rules, such as automatically enrolling workers in retirement plans, leaving them the choice of opting out. He calls such measures “soft paternalism,” to be distinguished from the “hard paternalism” of flat bans or mandates, which do not leave people free to decide for themselves.

Sunstein has laid out these arguments before, most prominently in two books, Nudge and Simpler. In Why Nudge?, he covers much of the same terrain—repeating some passages from his earlier books almost verbatim. But here he deploys behavioralism to take on John Stuart Mill’s famous case against paternalism. In On Liberty, Mill argued that paternalism was unwarranted in large part because individuals know better than others do what will serve their interests. For that reason, unless an individual’s actions harm someone else, Mill maintained, the state should stay out of her business. This “harm principle” is one of the foundations of modern liberalism.

Mill’s case against paternalism is undermined, Sunstein says, by man’s propensity to err and sabotage his own interests. If we know that people make predictable mistakes, then paternalistic interventions designed to mitigate those mistakes may increase people’s welfare overall. Even when our actions harm no one else, government intervention may therefore be justified. And because the way that choices are presented to us inevitably influences our decision making (for example, people are more likely to choose the first item on a list over subsequent items), Sunstein advises the government to design “choice architecture” in ways that nudge us toward choices that better serve our ultimate ends.

The behavioral findings that Sunstein invokes provide a much-needed corrective to legal and public-policy reasoning based on erroneous assumptions about rational decision makers. But not all of his ideas about implementing these scientific insights are equally persuasive. For example, he notes that when people are asked to make decisions in a foreign language “that they speak, but in which they are not entirely comfortable,” System 2 takes over, and common impulsive errors are significantly reduced. Sunstein contends that the same advantages might be obtained by engaging in cost-benefit analysis—on the grounds that such analysis is like a foreign language and will eliminate cognitive biases. Yet if human beings fail to support climate-change regulations because they’re wired to downplay long-term risks, overreact to immediate dangers, and resist change in general, won’t those same tendencies infect their cost-benefit analysis of the regulations?

Sunstein is surely right that conspiracy theories can take root when like-minded groups hear only what circulates in their echo chambers. It is disturbing that many Americans, and many more Muslims abroad, think the U.S. either played a role in or actively chose not to stop the 9/11 terrorist attacks. But his policy prescription vastly overreaches. He proposes that, at least when there are compelling concerns about terrorist threats, the government send undercover agents into chat rooms and other social settings, real and virtual, to spread official counternarratives—a strategy that is at best creepy, and likely to backfire.

The truth is that a Millian anti-paternalist could quite readily support virtually all the proposals Sunstein defends in the name of paternalism, because they respond to conduct that inflicts harm on others. Promoting fuel economy does more than serve a consumer’s self-interest; the approach reduces damage to the environment and conserves scarce energy. Similarly, warnings about smoking and texting while driving address behavior that often directly endangers others, and nearly always imposes indirect harm, through insurance costs. Even the failure to save for retirement generally has negative consequences for others, who are forced to pick up the tab.

Whether or not you call it paternalism, Sunstein’s soft version of government intrusion is often preferable to hard bans or directives. Who could be against disclosure rules, at least when there is good reason to believe that added information will enable better judgments, and not simply overwhelm us? At the same time, in the spirit of taking seriously the behavioralist insights Sunstein invokes, further System 2–style scrutiny is in order. If cognitive biases cause private individuals to err in making decisions, won’t public officials be prone to similar errors? If public officials have the power to subtly nudge us to the “right” conclusions through “choice architecture,” what makes us confident that we will know when and how they are nudging us? And if the behavioralists are right that we are primed to stick with the status quo, isn’t the vaunted “freedom to choose” promised by default rules largely illusory in many settings?

In the deliberative mode Sunstein encourages, he raises some of these considerations himself, even if he doesn’t reckon with all of them thoroughly. In any case, they do not undermine his fundamental message—that behavioralists offer an important challenge to entrenched assumptions that have long skewed legal and economic thinking. Sunstein has done more than any other scholar to bring cognitive insights to bear on basic questions of law and public policy, and for that he deserves our thanks. If at times he gets a bit carried away with the practical applications of experimental discoveries, I’m sure the behavioral economists have an explanation for that as well.