The unit’s work is described by them as “libertarian paternalism”, a phrase coined in the 2008 book Nudge: Improving Decisions About Health, Wealth and Happiness by Chicago University professor Richard Thaler and Cass Sunstein (now required reading for the Coalition front bench). And yet while their language might sometimes seem worryingly close to management-speak – using “choice architecture” to create “rational economic optimisers” – it belies some basic common sense.
Cass Sunstein, a friend of Obama’s from his University of Chicago Law School days, spent the last four years running the Office of Information and Regulatory Affairs (OIRA). It’s an obscure but exceedingly powerful perch that enabled Sunstein to put his imprint on everything from fuel efficiency standards and the redesign of the food pyramid to the rules for the landmark health care and Wall Street overhauls.
Sunstein used his office as a laboratory for his brand of “libertarian paternalism” — his self-described and seemingly paradoxical approach to structuring prompts for people that promote their welfare by protecting them from their more self-destructive impulses.
I suppose we are bound to hear more and more about libertarian paternalism. This is not new to those of you who just took Comparative Economic Systems, and neither are the warnings of Harvard’s Ed Glaeser on the dangers of “soft paternalism.” That leaves just one last question: What would Hayek say? Economics student Ryan Kottman answered that question for the Comparative Economics crowd in his presentation on “libertarian paternalism:” Hayek would worry very much about the government’s nudging leading to less individual responsibility. Kottman quotes Hayek’s Constitution of Liberty: “We assign responsibility to a man, not in order to say that as he was he might have acted differently, but in order to make him different.”
The Spring Economics Reading Group will feature the astonishing Winners, Losers, and Microsoft: Competition and Antitrust in High Technologyby Stan Liebowitz and Steven Margolis. The book is more about competition in high technology than it is about Microsoft itself, and it was written back when people still used VHS players and Apple was a bit player in the computer market (pun possibly intended).
Oh, how times have changed.
This book is tried-and-true. Last year students gave it rave reviews as the featured reading for the Economics Senior Experience, and we also read it in my Industrial Organization this past term.
If you happened to have already read it, don’t despair, I am compiling an auxiliary set of readings to complement (and update) the Liebowitz and Margolis book. Indeed, the group discussion might be the ideal setting for you to augment your knowledge of the knowledge economy.
We will meet Thursdays from 11:10 to 12:15, provisionally in Briggs 217.
You might be interested to know that a new 200-level economics course has been added to the schedule for the quickly approaching spring term. ECON 225, Decision Theory, will be taught by Professor Galambos MWF 1:50 to 3:00. He has offered this course in the past as “Game Theory and Applications.” The new title reflects a greater emphasis on the decision theory foundations, after which game theory and its applications will follow in the second part of the course. If you’d like to get an idea of what the course is like, take a look at last year’s syllabus. This year’s offering will not be exactly the same, but it will be very similar. The course is now listed on Voyager, so you can register any time.
In the previous post, I mentioned the Robert Whaples survey of American Economic Association (AEA) members on their public policy views. Of course, Whaples isn’t the only one with access to Survey Monkey, and with the help of some of my colleagues, we gave the same survey to students in Freshman Studies, Economics 100, and Economics 300 courses.
The Freshman Studies sample (n=26) should be fairly representative of incoming freshman population, as every student takes freshman studies and these students are allegedly distributed randomly across the sections. I have data from two sections with a 90% response rate. The Econ 100 course is predominantly freshman as well, but is a much different cross section of the University, with 70% planning to major in economics or some other social science. The Econ 300 is, of course, generally for students taking the first “major” step to joining Team Econ down here on Briggs 2nd. It is well-worth noting that the Econ 100 (n=35) and Econ 300 students were surveyed at the beginning of the course,* not the end. Perhaps next year we will switch that up.
The survey participants rate the questions on a 1-5 scale, with 1 being strongly disagree and 5 being strongly agree.
Here are selected results, sorted by the scores of AEA members: