Summary
Rizzo and Whitman (R&W) begins with a primer on the “new paternalism” – the influential policy reform movement powered by the engine of behavioral economics.
For most of history, paternalists have drawn their support from religious or moral notions of goodness. They have claimed special knowledge, from God or some other source, about how people ought to live. The overtly religious character of temperance movements in the nineteenth and early twentieth centuries exemplifies this kind of “old” paternalism. Given their moral convictions, the old paternalists did not usually appeal to the preferences and desires of those whose behavior they wished to regulate. The very desire for alcohol – or drugs, or deviant sex – was condemned directly.
[…]
Behavioral economists, like most economists, still accept subjectivism. However, they have rejected the notion of accurate preference revelation. Experimental evidence suggests that individuals may systematically deviate from the behavior that would best satisfy their own preferences. The list of alleged deviations from strict rationality includes – but is not limited to – status quo bias, optimism bias, susceptibility to framing effects, poor processing of information, and lack of willpower or self-control. To the extent that these phenomena cause people to make errors, paternalist policies can in principle help them to do better – not by some exogenous standard, but by their own standards. This is the defining feature of new paternalism that distinguishes it from the old: the new paternalists claim to help people better achieve their own preferences, not someone else’s.
Cass Sunstein and Richard Thaler are the popular and intellectual leaders of the new paternalists. As R&W succinctly explain:
Cass Sunstein and Richard Thaler, coming from an economic perspective, support policies that will make people better off “in terms of their own welfare.” That welfare is best advanced by the choices people would make “if they had complete information, unlimited cognitive abilities, and no lack of willpower” (Sunstein and Thaler 2003, 1162). In other words, Sunstein and Thaler define the correctness of choices in terms of what people would choose for themselves – if only they were not afflicted with cognitive biases.
New paternalists then present novel rationales for a wide range of government interventions. For example, they advocate “sin taxes” to help not society, but the “sinners” themselves. Fat taxes help fat people weigh what they “really want to weigh.”
R&W close the chapter by explaining their multi-stage argumentative strategy.
Our case will consist of a series of challenges – in effect, hurdles that behavioral paternalist proposals must clear in order to be justified as a matter of policy. We will begin with the most abstract and conceptual, then proceed to more pragmatic and applied challenges.
The most abstract: Behavioral economists take simple models of rational choice too literally.
We refer to the traditional economic definition of rationality, adopted by mainstream and behavioral economists alike, as “puppet rationality.” It is a brand of rationality well suited for building models of how the world works. Models are not unlike stage plays, and puppets are the players. The puppets are always well behaved. They play the roles they were designed to play. They follow the rules. They have no motive force of their own. Real human beings, however, are not puppets. Their preferences and behavior may deviate from what is expected of agents in a model. But such deviation does not provide sufficient warrant for deeming them irrational.
But even if standard notions of rationality are solid, the much-hailed experimental evidence is sorely lacking in external validity:
Much of the evidence for “failures of rationality” derives from experimental settings that are effectively context-free. Such experiments may identify “raw” or unmodified propensities in human behavior in the laboratory. But they do not tell us how strong those propensities are “in the wild,” where people make real decisions…
We also argue that people are often (though not always) aware of their cognitive biases, and sometimes they act to counteract or control them. People “self-debias” in myriad and idiosyncratic ways…
Pragmatically, R&W argue that the new paternalism suffers from a massive yet neglected knowledge problem. Most fundamentally: “If actions do not reveal preferences, then what does?”
Last, the book explores public choice and slippery-slope problems with paternalism in great detail.
This is only Chapter 1. In Chapter 2, R&W appeal to “inclusive rationality” to critique behavioral economics at its root.
Are human beings rational? …But it is not easily answered, because the word “rational” has many meanings. Rationality can simply mean purposefulness, that is, trying to use the best means available to satisfy your goals or preferences given your beliefs about the world. It can mean taking an abstract approach to solving problems, applying universal systems of thought and inference, and following scientific methods. It can mean avoiding errors of logic and reasoning. It can mean revising one’s beliefs in accordance with Bayes’ Rule. It can mean having preferences that conform to certain axioms – transitivity, completeness, and so forth – which together guarantee the preferences are internally consistent and have a certain structure. In neoclassical economic theory, it has historically meant all of the above.
[…]
In this book, we will defend what we call inclusive rationality. Inclusive rationality means purposeful behavior based on subjective preferences and beliefs, in the presence of both environmental and cognitive constraints. This notion of rationality preserves the core notion of purposefulness, and in that sense it should seem familiar. But unlike other notions of rationality – many of which were invented for modeling purposes but have since taken on a life of their own – inclusive rationality… allows a wide range of possibilities in terms of how real people select their goals, form and revise their beliefs, structure their decisions, and conceptualize the world.
They continue:
[R]eal people may do all of the following and still qualify as inclusively rational:
- Experience internal conflict that has not yet been (and may never be) resolved;
- Have preferences that change over time;
- Have preferences that are indeterminate or incomplete – i.e., that do not specify attitudes over all possible decisions at all possible times and states of the world;! Have preferences that are in the process of being created or discovered;
- Have preferences that depend on context, including both the options available and the way in which decisions are framed;
- Hold beliefs that serve purposes other than truth-tracking, such as providing motivation or intrinsic satisfaction;
- Make inferences based not on the strict rules of classical logic, but on contextual and linguistic cues they have learned from human interaction;
- Indulge “biased” modes of decision-making when the costs are low and rein them in when the costs are high;
- Economize on scarce mental resources by refusing to impose perfect consistency on their preferences and beliefs;
- Structure their environments, possibly in ways that constrain their own choices;
- Adopt personal rules and resolutions that create internal incentive systems;
- Enlist the help of friends, family, and other groups to assist in attaining goals;
- Rely on institutions, social customs, and market structures to assist in attaining goals;
- Employ heuristics that minimize cognitive effort and/or informational input.
R&W are well-aware of the methodological objection:
Because our notion of inclusive rationality is very broad, we might be accused of offering a theory that cannot be falsified. We should therefore clarify that we do believe positive claims should, in principle, be falsifiable. But some claims are more easily tested than others, and there is no guarantee that the most easily tested claims are also normatively relevant.
In Chapter 3, R&W flesh out this critique in great detail. To take one example: In real life, people often seem to change their preferences. Yet behavioral economists either refuse to consider this possibility, or treat changing preferences as ipso facto “irrational.”
The second interpretation is that the agent’s preferences have simply changed over time. In other words, if someone chose A over B on Monday but B over A on Tuesday, that could be the result of consistent (complete and transitive) preferences on Monday, and a different set of consistent (complete and transitive) preferences on Tuesday.
In general, economists resist preference change as an explanatory strategy because it feels ad hoc. Virtually any change in behavior can be rationalized as resulting from changing preferences, but economists usually wish to show the reasons why behavior may change even if tastes do not – for example, because of changing relative prices. To resort to saying preferences have changed seems like cheating. These are valid concerns from a positive perspective. But from a normative perspective, they hold little weight. There is no reason a person’s preferences should remain fixed. Rational people may change their minds – and we have not encountered anyone arguing otherwise.
Critical Comments
1. Escaping Paternalism focuses almost entirely on the “new paternalism.” Yet the more I read the book, the more I concluded that “new paternalism” is largely an attempt to repackage “old paternalism” for an elite, secular audience. Even today, no more than 5% of people who want to forcibly reduce alcohol consumption think they’re helping heavy drinkers “achieve their true preferences.” Instead, they seek to give drinkers “what they need, instead of what they want.” The main audience for the new paternalism is: meddlers who also have an ideological ax to grind against the want/need distinction.
2. On present bias, behavioral economists don’t go far enough. It’s not enough to have exponential discounting rather than hyperbolic discounting. Instead, I say the rational discount rate for utility is no time discounting at all. Contrary to what you may have heard, this would not lead you to starve to death. And you should still discount for uncertainty, finite life, and so on. But, pace Hume, ’tis contrary to reason to prefer a present pleasure to a future pleasure solely because the present is now and the future is later.
3. R&W repeatedly mention behavioral economists’ support for mandatory “cooling-off periods.” I wonder how many behavioral economists have ever examined how often people even take advantage of this opportunity to cancel a contract. The last time I refinanced, we had to sign paperwork apprising us of our right to renege. When I asked the banker how often people exercised this right, he furrowed his brow and laughed, “Never.” I believed him.
4. R&W repeatedly discuss behavioral economists’ support for “employee-friendly” labor contract defaults. Given all the evidence that unemployment breeds misery, a wise paternalist would strive to “nudge” labor’s total compensation down, not up!
5. R&W insist that “inclusive rationality” is falsifiable, but I don’t think they name a single concrete counter-example. This is arguably intentional, for they often say things like:
We do not, however, claim that everyone is always fully rational. We are happy to concede that they are not. But it is one thing to say people make mistakes; it is another to clearly and definitively identify which actions are, in fact, mistakes.
Strikingly the word “opioid” does not appear in the text. (“Heroin” does, but sans empirics). I sincerely wish they had provided an “inclusive rationality” take on the putative opioid crisis.
6. One of my favorite passages:
We don’t expect that every reader will find all of our challenges to paternalism equally compelling. Some may find our conceptual objections persuasive, others may see the knowledge problem as definitive, etc. But our hope is that, taking the gauntlet of challenges as a whole, readers will recognize just how tenuous the entire new-paternalist enterprise is. Behavioral paternalism’s proponents often present it as just common sense – a set of smart, simple, straightforward corrections that will make us all better off. All we’re trying to do is correct some mistakes; who could be opposed to that? But the reality is far more difficult, complicated, and even dangerous.
As you’ll see, I find the conceptual objections only moderately persuasive, but the rest of their critique is strong indeed.
7. R&W go through a lengthy list of defensible “mistakes” people make in experiments. Let’s consider them one-by-one:
When real people take tests designed to test neoclassical rationality norms, they do not leave their inclusive and contextually shaped rationality at the testing room door. Instead, they may behave as they do in the real world. For example:
- They may assume, in accordance with ordinary conversational norms, that experimenters provide only information that is relevant to solving the problem – i.e., no irrelevant or “tricky” information. They do not immediately assume the experimenters are trying to fool them.
Reasonable.
- They may resist the distinction between the validity of a syllogistic inference (e.g., “People with red hair are Martians, John has red hair, therefore John is a Martian”) and the truth of a conclusion itself (John is not a Martian). Normally, in everyday life, it is the truth that is more important.
This isn’t entirely wrong, but the ability to recognize such logical errors really is a crucial real-life skill. Anytime you propose an explanation for anything, logical reasoning opens your theory up to testing. Even for an explanation as simple as, “If I go to McDonald’s before 7 AM, the line will be less than 5 minutes long.”
- They may not assume that prior probabilities about something – such as the likelihood that someone has a disease – must be equal to the “base rates” from the population provided to them. Instead, their priors may be affected by their evaluation of the significance of the base rates to a particular problem in front of them – say, whether a specific person who chose to visit the doctor and chose to take a test has the disease. Treating priors in this way is fully consistent with the subjectivist Bayesian view that prior probabilities are subjective – a fact frequently ignored in the rush to deem subjects “irrational.”
Reasonable.
- They may not agree with model-builders on the informational equivalence of different descriptions of a situation. Instead, they may infer implicit information or advice from how a problem is presented. For example, they may perceive an important difference between a stated probability of success equal to 0.7 and a stated probability of failure equal to 0.3. Perhaps the former conveys greater optimism, despite the formal mathematical equivalence of the two statements. Conversational norms and expectations do not always align with logic and probability theory. The former can be adaptive in the real world while the latter is adaptive on experimental tests. Which is more important?
Seems pretty crazy to me. Sure, if you’re marketing a product, you’re better off saying “70% success” rather than “30% failure.” Yes, the former phrasing suggests “greater optimism.” The only reason such rhetoric works, however, is that some potential customers are confused.
- They may attach satisfaction or utility to things other than what the analysts expect. For instance, they may value an object more because it is theirs already. Or they may care about feelings of gain and loss experienced during the experiment, not just how much money they have when they leave the laboratory. Or they may gain satisfaction purely from having a particular belief, irrespective of its truth (“My wife is beautiful and my children are gifted”).
Somewhat reasonable, though it’s usually tempting to call such behaviors “childish.” Picture a kid who wants his teddy bear, not an identical teddy bear that’s a hundred miles closer.
8. While we’re on the subject, R&W never discuss children. Are they, too, “inclusively rational”? If so, should parents stop treating them paternalistically? Or what?
9. Suppose someone has inconsistent preferences. How are we supposed to identify their “real” preference? While this might seem like nitpicking, R&W show that behavioral economists have been cavalier at best.
Some defenses have been offered for favoring some preferences over others in cases of conflict, but we find these defenses weak:
Verbal Statements and Survey Responses: When asked, people may say they would rather behave differently or have different preferences. For instance, smokers may say they would rather not smoke, and overweight people may say they would like to eat less. It is indeed possible that these statements reveal “true” preferences. However, the incentives for speech differ from the incentives for other kinds of action. Behavioral research has cast doubt on many economic principles previously taken as given, but the principle that talk is cheap remains intact. Speakers who say one thing while doing another may simply be expressing what they regard as socially approved attitudes – a phenomenon known as social desirability bias (King and Bruner 2000; Grimm 2010). Or their statements may simply reflect “experienced opportunity cost,” i.e., the dissatisfaction that always results from options the agent has forgone.
Note: If we take Social Desirability Bias seriously – as I think we should – we can readily identify the “real” preference. Namely: Contrary to the new paternalists, the real preference is what people really do!
Regret: A person may feel, and express, feelings of regret about the choices they have made: “I wish I had not done that.” Although regrets are real, they do not necessarily reflect all costs and benefits associated with an action. specially for intertemporal choices, such as getting inebriated last night and having a hangover today, the regret is typically experienced while the cost is being experienced in the present and the benefit is already in the past. That does not mean the costs outweighed the benefits at the moment of choice – only that the remaining costs outweigh the remaining benefits. In addition, it’s worth noting that regret can also be felt about the kinds of choices that behavioral paternalists favor. When approaching death, people often express regret at not having lived a more spontaneous and present-oriented life (Ware 2012).
They’ve got them there!
If regret may be experienced regardless of the action taken, then it offers little guidance to the paternalist about which preferences are “true.” As with verbal statements, regret can simply reflect the experience of opportunity cost…
Self-Constraint and Commitment Devices: People will often use various devices and strategies to try to keep their vices under control: planning automatic deductions for savings, avoiding locations where they will be tempted to smoke or drink, etc. These activities do provide further evidence of conflicting preferences, and we will discuss them more in future chapters. They do not, however, show which preferences are superior. Commitment devices reveal one set of preferences at work – but other choices show other preferences at work. Furthermore, the outside observer has no means of knowing whether the right amount of self-constraint has been performed.
Planned versus Unplanned Choices: Behavioral paternalists often favor the preferences of a “planning self” over the spontaneous or “acting self.” The idea is that the planning self is more likely to take all costs and benefits into account and render a considered decision. But the planning self does not necessarily represent a disinterested party; rather, the planning self may represent only the longer-term and more self-denying parts of one’s personality (Cowen 1991). This becomes most apparent in the case of extreme behaviors such as anorexia, where the planning self dominates an acting self that might wish to indulge more often.
10. When I began Escaping Paternalism, I skipped over chapters 1-5, fearing they’d be long-winded, half-baked Austrian philosophy. I was so impressed with chapters 6-10, however, they I started reading the book from the beginning as soon as I finished chapter 10. I swiftly concluded that unlike so many other Austrian-inspired works, Escaping Paternalism was not only conceptually thoughtful, but eager to engage with an array of empirical literatures. If you’re impatient with economists waxing philosophical, I urge you to make an exception here.
READER COMMENTS
Scott Sumner
Jul 14 2020 at 12:23pm
The New Paternalism is the worst possible system, except for 99% of the alternatives (including modern America.) Think of the boon to human welfare of replacing the war on drugs with sin taxes on drugs. And multiply that example 10-fold. Paternalism has its problems (and I’m not a fan) but there are much, much worse alternatives. We have one of them.
Regarding time discounting, keep in mind that the young have much greater capacity to enjoy a dollar’s worth of consumption. (Especially the 90% of people who are not intellectuals.) What may look like hyperbolic discounting may actually be a rational awareness of physiological changes that occur as one ages. I shake my head when I see people claim that NFL players might be making a mistake because they’ll have medical problems when they are old. So they’d be better off driving a garbage truck when young, rather than being a rich sports hero?
Thomas Hutcheson
Jul 15 2020 at 8:05am
I think that the “Wars” on drugs, crime and terror are more political posturing than miscalculations of the neo-liberal cost-benefits of the policy.
mark
Jul 15 2020 at 9:33am
Right on spot! (Though I do enjoy the book club.) – About time and money of the young: I have two sightly spoilt kids 22 and 16. The older burnt through a few thousand $ of my money, and I pretend to be angry. But, hey, he really did have a lot of fun with that money, more than I would get from spending double on it today. – My small kids would be aghast at the notion that this new teddy-bear (even fav. Barbie) should be “same” as their teddy left at home! Childish, really? – Reminds me of story from the purges: When Stalin purged a woman, who was the wife of a “good comrade”, Stalin gave him a new woman, allegedly younger and prettier. The comrade was not so childish as to utter regrets.
Glen Whitman
Jul 15 2020 at 6:16pm
With respect to the use of behavioral paternalism to justify *less* intrusive interventions than the status quo, here’s what we say in the book:
“If behavioral paternalists take up the cause of rolling back drug
prohibition in favor of softer paternalist measures, we will happily applaud
them. Though we have our doubts about the efficacy of those softer
measures, we have no doubt about the harms of the harder ones. In the
existing literature, however, behavioral paternalism has almost always been
deployed to advocate more intervention, not less.” (p.428) There is also a footnote to this passage, as follows: “The major exception seems to be Thaler and Sunstein (2008, 215–226) in the chapter ‘Privatizing Marriage.’ The chapter ‘Privatizing Social Security’ (pp. 145–156) advocates allowing people to choose among investment vehicles for their Social Security funds, but does not go so far as to advocate allowing them to opt out of the Social Security system entirely.”
Why hasn’t behavioral paternalism been used more often to support roll-backs? It could be that the leading behavioral paternalists simply have little interest in doing so. But more importantly, while they *say* that their approach could justify some roll-backs, their intellectual framework does nothing to support that. Its primary thrust is not to *gird* the case for the efficacy of individual choice, but to *undermine* it. Only the school of Gigerenzer and his colleagues (largely ignored in the paternalist literature) has offered anything to support the idea of people making *better* choices than might be expected.
Garrett
Jul 14 2020 at 1:10pm
Finally, an economic model of Taco Tuesday!
Laron
Jul 15 2020 at 2:07am
I just wanted to say this is a quality insight that nearly made me spit up my drink and got me an odd look from my wife.
Jason Ford
Jul 14 2020 at 10:19pm
Here are some thoughts from someone who has never taken a graduate-level economics class. I acknowledge that I may not grasp all the nuances of what I’m addressing.
After reading the book, I thought that Dr. Rizzo and Dr. Whitman were addressing a part of a larger issue that Dr. Caplan also addressed in two of his books. The issue is an extension of an idea from F. A. Hayek. Hayek wrote that “The Fatal Conceit” is that “man is able to shape the world around him according to his wishes.”
The extension of this idea is that not only can’t people shape the world around them but they can’t even shape other people at an individual level. As Dr. Rizzo and Dr. Whitman aptly point out, people are not puppets. The issue is that people are very complex and can’t be easily changed or controlled.
Rizzo and Whitman apply this issue to modern paternalism. Caplan applies this idea to child raising in his book “Selfish Reasons to Have More Children” and to education in his book “The Case Against Education.”
You can’t make people better off by putting a tax on fatty foods. You can’t make a child happier by making her practice piano. You can’t make a student more knowledgeable or happier by making him take a history class he has no interest in.
Do you agree there’s a larger idea underlying the three books? Has any economist endeavored to write a general theory of the failure of trying to shape people at the individual level?
Mario J Rizzo
Jul 17 2020 at 10:27am
I am not aware of a general theory of the failure to mold people. But it seems to me that Adam Smith’s statement about the “man of system” thinking, incorrectly, that he can move people around like chess pieces is a good general statement (not a full fledged theory) of the claim. More recently, I have discovered an article by the psychologist-philosopher William James, “On a Certain Blindness in Human Beings.” This article basically says that we don’t normally appreciate or understand the sources of meaning in other people’s lives and therefore we are incompetent to direct or correct them.
Jason Ford
Jul 17 2020 at 9:34pm
Interesting! Thanks!
Alexander Turok
Jul 14 2020 at 11:44pm
I don’t think you could pass an ideological turning test as an advocate of higher taxes on alcohol. Most would say that drunks do want to stop but lack the self-control to do so. I think they’re overrating self-control as an explanation and that, indeed, around 80% of drunks drink because they prefer stupor to sobriety, with only a minority really wanting to quit.
My view on it is that if you divided 1945 Germany into two states that differed only in that one imposed high sin taxes and the other no sin taxes whatsoever, with other taxes raised slightly to make up for the lost revenue, the German at the margin would prefer the sin-taxed Germany. He would probably be unable to explain why, agreeing with your objection that “how does it hurt you if other people are fat or abuse alcohol?” But he’ll have an answer, just not one he’ll admit to: he does not want to marry a woman who is fat or a drunk or may become fat or a drunk later. He won’t admit to this because that would mean admitting he isn’t the top-flight man with the pick of the litter he wishes himself to be. But it will be there and it will affect his behavior, though not nearly to the same extent of the two Germanys of our time.
Matt
Jul 14 2020 at 11:50pm
Really enjoying the book, thanks Bryan for holding the book club. I have a question for the authors/Bryan:
A friend of mine seems to have willpower when she really values something in the future, and by prioritising that long-term goal, she moves towards it and attains it. She has therefore used willpower and acted rationally. But consider if she has a future goal that she holds with only moderate enthusiasm. She tends not to sacrifice things in the short run for it, even if the future goal may be, in some objective sense, desirable (such as exercising to achieve a great body). Behavioural economists may call the latter example, ‘irrational’. But I tend to think of this through Henry Hazlitt’s view on willpower, and I’d be interested in Rizzo/Whitman/Caplan’s perspective on this.
Hazlitt takes an economic model of willpower. The will is simply that which we choose to do at one time and which has won out over competing desires. Given many short term desires may conflict with long term goals, the difficulty lies in keeping the long term vision/goal front of mind so that acting that way is not ‘dethroned’ by shorter term desires. So far, this seems like a fairly standard view. We aim at the best, but trip up on the way. This would be deemed irrational – we haven’t chosen correct means to achieve our ends.
But Hazlitt doesn’t call this irrational behaviour. It is not, as Rizzo and Whitman describe the behavioural economists’ view, a failure to choose effective means to achieve given, subjective ends. In Hazlitt’s view, it is that the long-term goal was poorly chosen. If, when the time comes to pay the price – to sacrifice by giving up something – and we choose not to give up that thing, we have chosen a goal that we were not willing and able to pay the price for. That is, we desired the long term goal, but did not demand it. Therefore, willpower is about what we demand – which is the product of how we value some things relative to others. Are we choosing goals in alignment with our values?
So, is a preference only useful in considering whether behaviour is rational or not if we are willing to pay the price for it, ie that we demand it? Are preferences assumed to be the things we demand, not desire? How does this idea relate to Rizzo and Whitman’s book? Thanks.
Thomas Hutcheson
Jul 15 2020 at 8:01am
I hope the author of “Escaping Paternalism” clearly distinguishes regulation based on paternalism (limiting the size that sugary soft drinks can be sold in), economies of scale (better one city inspector checking the restaurant kitchen for cockroaches than each patron needing to do so), externalities (taxing the net emissions of CO2 into the atmosphere) income transfer (restrictions on trade and immigration), and problems of good faith instances of each compared to regulatory capture (occupational licensing).
Mario J Rizzo
Jul 15 2020 at 12:10pm
Yes, we do.
Mario J Rizzo
Jul 15 2020 at 10:17am
I may have more to say on this later. However, I have an article on “deficient willpower” in the Georgetown Journal of Law and Public Policy, vol 14 (2017), pp. 789-806. There is an SSRN version here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2731818
SaveyourSelf
Jul 17 2020 at 2:02pm
Isn’t that like ignoring compounding interest? Wouldn’t that be irrational, or at least unintelligent?
Ha! Now there is an argument I’ve never heard before, but it’s solid!
Agree. I’ll try and take up the challenge in their place. It’s important.
Dopamine is supposedly the brains internal reward mechanism. It’s released whenever we perform activities that improve self-survival like peeing, pooping, suckling, eating, drinking, cooling off when hot, covering up with a blanket when cold, having sex, moving our bodies, etc. It creates a kind of internal compass or heuristic/rule-of-thumb. The heuristic we learn from consistent dopamine release over time is that the more dopamine let loose following an action, the better that activity is for us. Interestingly, the one important survival activity that isn’t typically associated with dopamine release is focused, intense, prolonged thinking. And that, in itself, is a survival strategy too.
Opiates, and indeed all addictive drugs, trigger massive releases of dopamine in the brain, encouraging and reinforcing the use of those drugs through the dopamine heuristic. Unfortunately, the release is sometimes so large that it overwhelms the typical release of dopamine associated with normal activities of survival, which can lead addicts to prefer the use of those drugs over all other activities of survival like childrearing, working, bathing, sleeping, and even eating.
Given this dopamine heuristic model, is drug use rational from the individual drug users perspective? Yes. Addicts are getting what they want. What’s more, what they want is in a very real way “rational”. They are seeking that which their own brain tells them is optimal for their survival. In order for drug use to be subjectively irrational, it must be judged outside the heuristic but still inside the individual decider. And that requires thinking logically, stepping outside of the dopamine heuristic, and asking if the dopamine release associated with the drug use is actually improving survivability rather than just implying that it does. But, as I said earlier, focused thinking is work. Worse, it is work that cannot be sustained. So “thinking your way out of addiction” is not possible. At least not in the long run. Thus the only truly consistent rational approach to drug addiction is to avoid getting addicted in the first place.
Mario J Rizzo
Jul 17 2020 at 8:56pm
As to the limited issue of zero discounting of utility. This is a view that was supported by Pigou and others. But, as far as I am concerned, it is meaningless. We do not observe the discounting of pure utility (whatever that is). We observe the discounting of particular goods in particular and varying circumstances and under conditions of uncertainty.
SaveyourSelf
Jul 18 2020 at 8:35am
Mario J Rizzo, thanks. I love the caveats in your sentence “in particular and varying circumstances and under conditions of uncertainty.” I thought your book did a particularly good job dealing with the unavoidable issues of uncertainty in decision making. I look forward to engaging with you regarding some of your other ideas.
SaveyourSelf
Jul 17 2020 at 5:58pm
Continuing: Regarding the question of paternalistic and putative responses to the opiate crisis.
Because drug use co-ops the brain’s own mechanisms for determining and weighting opportunity costs and breaks that mechanism; because the problems of addiction are permanent so that “relapse is the norm”; because the negative consequences of drug use is experiences long after drug use is first started; and because first use of drugs is typically in childhood when people are still considered minors, paternalistic policies are reasonable. The universal goal of those policies should be (a normative claim) avoiding first use. I think the best intervention for achieving this goal would be frequent and continuous education and reminders to young people regarding the real negative consequences of drug use. That would avoid the problems of forgetting and minimize the reduction in freedom compared to alternatives. Severe punishment for drug users like capital punishment would also help reduce the number of children who start drugs, but at a terrible cost to freedom. Less severe punishment is unlikely to reduce drug use and may even increase it. That said, legalizing drugs is still the worst of all ideas in a socialist country that steals from the healthy to give to the sick and likewise steals from those who chose not to use drugs and gives to those who do. Legalizing drugs also removes the rule-of-thumb avoidance of drug use for those who are “law abiding”. Finally, the drugs that kill the most people in the world, alcohol and cigarettes, are not coincidentally also the most legal. Legalizing other drugs would absolutely increase their death toll. Maybe more deaths is worth more freedom and, admittedly, keeping drugs illegal is not required for some paternalistic interventions (constant, frequent reminders and education), but, regardless of legal status, behavioral paternalism is justified against drug use.
SaveyourSelf
Jul 18 2020 at 8:17am
With regards to the book itself. Escaping Paternalism is full of interesting insights. I’d like to discuss a lot of them. This one was my favorite:
Heuristics are rules of thumb. They are quick and dirty rules applied to categories of problems. Ideally, they produce good outcomes most of the time quickly and at low cost. But sometimes they get it wrong. The likelihood of the heuristic “getting it wrong” is risk. The behavioral paternalists endeavor to find systematic ways to help people reduce the risk inherent in the use of particular heuristics. But what Rizzo and Whitman point out once is that the paternalists’ “systematic ways to reduce risk” are also heuristics! Thus the centralized solutions endorsed by paternalists have the same weaknesses (and strengths) as the heuristics they are trying to correct. And as such, their “solutions” carry their own risk!
Now, that fact alone is not enough to discredit paternalism. But consider if a personal-heuristic had a 30% risk of getting it wrong. But by applying a second, paternalistic-heuristic before or after the first, that risk could be reduced an additional 66%. That would imply the two rules used together improved a 70% success rate to a 90% success rate. Which sounds great, but is overly charitable. It implies the paternalistic rule has only positive impacts on the results in question. It assumes the risk of each heuristic is the same, and thus they are additive rather than overlapping. Because if distinct or overlapping risks of different types is acknowledged as a possibility, then the very real prospect of increased risk of undesirable outcomes occurring by applying two heuristics to a single problem becomes an issue. A big one.
For example, when someone comes to my front door selling magazines, my default heuristic is to say “no thank you” before they even start their advertisement speech and close the door. That policy carries a risk that I might turn away someone who might have sold me something I want if I taken the time to listen to their speech—a subscription to The Independent Review. And I don’t want to miss out on that! Now imagine a paternalist passes a law that makes it illegal to shut the door on a salesman before they have made their full pitch. That paternalistic policy would, optimistically, reduce the risk of my missing out on a magazine subscription I care about to zero. Perfect! Right? Except there are new risks following the paternalist policy that didn’t exist before. For one thing, my old heuristic no longer works. So I’m going to abandon it. My new heuristic for dealing with salesmen at the door is to never answer the front door no matter who is there. That way I still can avoid the annoying sales pitch. But my new heuristic carries a new risk that I will now also miss information from non-salesmen like Amazon delivery or the postal service or my neighbor coming over to inform me a thief stole my car the night before. Thus even a paternalist policy that would likely reduce the risk of my personal heuristic, by my own admission, to zero, could actually produce worse outcomes for me than just leaving me alone to take my own calculated risks. That’s a different kind of risk and one that, on average, makes me worse off than if I’d just been left alone to make my own calculated risks!
Thanks for doing this book club, Brian.
Frank
Jul 18 2020 at 10:25am
I’m glad you mentioned points 5 and 8. I’ll be interested to see how the authors respond.
This part of the book made me notice a perhaps obvious tension in the New Paternalist position. The more content you pack into “rational” (so you can draw conclusions), the more it tends to become the Old Paternalism.
(I suspect there is a similar phenomenon in a certain sort of meta-ethics: professing to know nothing about virtue, and to be neutral among “conceptions of the good”, one needs to be very opinionated about “rationality” in order to be able to say something interesting.)
Mario J Rizzo
Jul 18 2020 at 11:24am
This subtle (and not-so-subtle) shift from new to old paternalism is important. One way it manifests itself is at the policy stage. Because of various knowledge problems that we discuss there is a tendency for policy goals to become blunt. For example, theoretically, there is an optimum (non zero) amount of junk food consumption because of the pleasure provided. This the behavioralists admit. (Indeed, it is part of the essential difference between an economically-oriented approach and a moralistic approach.) But because of knowledge problems the policy-maker doesn’t know what it is. So practically, the optimum is viewed as zero. Paternalists will not be satisfied until consumption of junk foods is reduced to almost nothing. At this point the claim that policy is just getting people to their “true preferences” recedes into the background. New paternalism becomes indistinguishable from the old. As a side-point — I have always found it odd that “true preferences” always seem to be socially-approved preferences. The behavioralists seem either unwilling to say or are unable to conceive that true preferences might be “bad” for the individual.
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