Paternalism, Deservingness, and Dependency

Paternalism, Deservingness, and Dependency

In his book Tell Them Who I Am Elliot Liebow writes about homeless women and how society tries, but ultimately fails to truly help the women survive and rejoin society. Our system for helping those in need, especially the homeless, is inefficient, ineffective, overly invasive, and ultimately fails to provide what people actually need. We have a system that provides limited government support that is hard to access and hard to understand. We provide what we think homeless people and people in need want, or what we want to provide them, not what they necessarily need.
Liewbow has an explanation for why we have a system that operates so poorly, “That we tolerate these system malfunctions can be understood in part as the end point of two streams of public thinking about the poor. One is that many poor people are not deserving of public support; the other is fear of giving them too much support and encouraging dependency.”
One of the things I have noticed in my own efforts to help support those in need is that what I think I should give people is not always what they actually need and want. Rather than giving panhandlers money, I prefer to give them some type of in-kind donation, often some type of non-perishable food item. I used to buy nutritious and calorically dense granola bars, but what I learned is that people who are asking for money often don’t have teeth or don’t have good oral hygiene and cannot actually eat a granola bar. Nor can they eat apples, healthy sandwiches, and other food items that I would prefer to give them rather than cash that I fear they may spend on alcohol. I’ve settled by providing Nutrigrain bars and similar soft yet somewhat nutritious food items that I can keep in the car.
My story shows how there is an element of paternalism in the way that we approach the homeless. We assume we know what is best for them and provide what we think they need, we don’t always take into consideration what they can actually use, carry with them, and what they would prefer. For me, this has been a learning process to be more useful with my support, even if I am still not giving them money which would be most useful. However, for many people, homeless people are not seen as deserving of any aid, and consequently those who help them become overly paternalistic. Any aid is provided on the conditions of the donor, with little consideration for the needs of the poor and homeless. If someone won’t take that aid then it further demonstrates that they just are not worthy. I think my experience of trying to give the homeless apples and granola bars demonstrates that this paternalistic approach and calling people unworthy demonstrates the shortcomings of such a view and approach.
The second aspect of Liebow’s quote is that we don’t want homeless to become dependent, so we chose to give them the minimal support necessary to survive. The theory suggests that we shouldn’t allow them to be too comfortable, or they won’t try to fix their own lives. We don’t want to offer them too much support, or they may just come to expect aid and assistance rather than accepting that they must work and be productive. Somehow we think that desperation, starvation, and the pain and shame of homelessness is the right way to get people to work and be productive. We would rather see people wasting away on the streets than living in acceptable conditions and receiving food, money, and shelter provided by the  government. Dependency runs against the American ethos that so many of us adopt, and we are unwilling to help those need beyond the bare minimum that we can do to keep them from dying in the streets.
Asymmetric Paternalism

Asymmetric Paternalism

While writing about the book Nudge by Richard Thaler and Cass Sunstein, I have primarily focused on an idea that the authors call Libertarian Paternalism. The idea is to structure choices and use nudges (slight incentives and structural approaches) to guide people toward making the best possible decision as judged by themselves. Maintaining free choice and the option to investigate or chose alternatives is an important piece of the concept, as is the belief that we will influence people’s decisions no matter what, so we should use that influence in a responsible way to help foster good decision-making.

 

But the authors also ask if it is reasonable to go a step beyond Libertarian Paternalism. Is it reasonable for choice architects, governments, and employers to go further than gentle nudges in decision situations? Are there situations where decision-making is too important to be left to the people, where paternalistic decision-making is actually best? Sunstein and Thaler present an introduction to Asymmetric Paternalism as one possible step beyond Libertarian Paternalism.

 

“A good approach to thinking about these problems has been proposed by a collection of behavioral economists and lawyers under the rubric of Asymmetric Paternalism. Their guiding principle is that we should design policies that help the least sophisticated people in society while imposing the smallest possible costs on the most sophisticated.”

 

This approach is appealing in many ways, but also walks the line between elitism, the marginalization of entire segments of society, and maximizing good decision-making. I hate having to make lots of decisions regarding appropriate tax filings, I don’t want to have to make decisions on lots of household appliances, and I don’t really want to have to spend too much time figuring out exactly what maintenance schedule is the best for all of my cars. However, I do want to get into the weeds of my healthcare plan, I want to micromanage my exercise routine, and I want to select all the raw ingredients that go into the dinners and lunches that I cook. On some decisions that I make, I want to outsource my decision-making and I would often be happy with having someone else make a decision so that I don’t have to. But in other areas, I feel very sophisticated in my decision-making approach, and I want to have maximum choice and freedom. Asymmetric Paternalism seems like a good system for those of us who care deeply about some issues, are experts in some areas, and want to maintain full decision-making in the areas we care about, while exporting decision-making in other areas to other people.

 

Of course, prejudices, biases, and people’s self-interest can ruin this approach. What would happen if we allowed ourselves to deem entire groups of people as unworthy of making decisions for themselves by default? Could they ever recover and be able to exercise their freedom to chose in important areas like housing, retirement, and investment spaces? Would we be able to operate for long periods of time under a system of Asymmetric Paternalism without the system devolving due to our biases and prejudices? These are real fears, and while we might like to selectively trade off decision-making when it is convenient for us, we also have to fear that someone else will be making decisions for us that are self-serving for someone other than ourselves.

 

The point, according to Sunstein and Thaler, would be to maintain the freedom of decision-making for everyone, but to structure choices in a way where those with less interest and less ability to make the best decisions are guided more strongly toward what is likely the best option for them. However, we can see how this system of asymmetric paternalism would get out of control. How do we decide where the appropriate level is to draw the line between strong guidance and outright choosing for people? Would people voluntarily give up their ability to chose and overtime hand over too many decisions without an ability to get their decision authority back? Transparency in the process may help, but it might not be enough to make sure the system works.
Paternalistic Nudges - Joe Abittan

Paternalistic Nudges

In their book Nudge, Cass Sunstein and Richard Thaler argue in favor of libertarian paternalism. Their argument is that our world is complex and interconnected, and it is impossible for people to truly make decisions on their own. Not only is it impossible for people to simply make their own decisions, it is impossible for other people to avoid influencing the decisions of others. Whether we decide to influence a decision in a particular way, or whether we decide to try to avoid any influence on another’s decision, we still shape how decisions are presented, understood, and contextualized. Given this reality, the best alternative is to try to help people make consistently better decisions than they would without aid and assistance.

 

The authors describe libertarian paternalism by writing:

 

“The approach we recommend does count as paternalistic, because private and public choice architects are not merely trying to track or to implement people’s anticipated choices. Rather, they are self-consciously attempting to move people in directions that will make their lives better. They nudge.”

 

The nudge is the key aspect of libertarian paternalism. Forcing people into a single choice, forcing them to accept your advice and perspective, and aggressively trying to change people’s behaviors and opinions doesn’t fit within the libertarian paternalism framework advocated by Sunstein and Thaler. Instead, a more subtle form of guidance toward good decisions is employed. People retain maximal choices if desired, and their opinions, decisions, and behaviors are somewhat constrained but almost nothing is completely off the table.

 

“A nudge,” Sunstein and Thaler write, “as we will use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.”

 

Daniel Kahneman, in his book Thinking Fast and Slow demonstrated that people make predictable errors and have predictable biases. If we can understand these thinking errors and biases, then we can identify situations in which these biases and cognitive errors are likely to lead people to making suboptimal decisions. To go a step further, as Sunstein and Thaler would suggest, if we are a choice architect, we should design and structure choices in a way that leads people away from predictable cognitive biases and errors. We should design choices in a way that takes those thinking mistakes into consideration and improves the way people understand their choices and options.

 

As a real world example, if we are structuring a retirement savings plan, we can be relatively sure that people will anchor around a default contribution built into their retirement savings plan. If we want to encourage greater retirement savings (knowing that economic data indicate people rarely save enough), we can set the default to 8% or higher, knowing that people may reduce the default rate, but likely won’t eliminate contributions entirely. Setting a high default is a nudge toward better retirement saving. We could chose not to have a default rate at all, and it is likely that people wouldn’t be sure about what rate to select and might chose a low rate below inflation or simply chose not to enter a rate at all, completely failing to contribute anything to the plan. It is clear that there is a better outcome that we, as choice architects, could help people attain if we understand how their minds work and can apply a subtle nudge.
The Necessity of Paternalistic of Choice Architects

The Necessity of Paternalistic Choice Architects

One of my favorite experiments to think about is a fabled study about people and jam. In an experiment, people at a store were able to sample jam. In one situation, there were only a few jams to sample, and in the other situation there was a huge selection of jams. Shoppers could try them all before making a purchase. The natural expectation (at least for me) is to assume that those who get to try more jams will be more happy with their final selection. After all, they have more jams to try and are more likely to find a jam that best suited their taste preferences. The results, however, suggest that people who only had a few jams to sample more happy with their final jam choice than the people with a bunch of jams to try.

 

This experiment reveals something interesting about how our mind works. Unlimited freedom and choice means that we are never truly satisfied with the decisions we make. We will always have a lingering doubt, and we will live with the regret of possibly making the wrong choice. The more options we have, the more likely we will feel as though we may have made the wrong decision. We might feel compelled to go beyond the standard default choice, selecting against a strawberry to go with huckleberry, even though we know we would have been perfectly content getting our regular strawberry jam.

 

The results of the jam experiment have important implications for choice architects. A choice architect is anyone who is in a position to organize, design, shape, administer, or deliver a choice to another person. Parents are choice architects when they give their children different options for toys, sports, or how to generally spend their time and attention. Your human resources benefits manager is a choice architect when they determine which health care plan types will be offered to employees. Very few of our decisions are truly free from a choice architect of one sort.

 

These choice architects have important decisions to make. In the book Nudge, authors Cass Sunstein and Richard Thaler make an argument for libertarian paternalism, the idea that choice architects can nudge people into making the decisions that will be best for them. They write, “The paternalistic aspect lies in the claim that it is legitimate for choice architects to try to influence people’s behavior in order to make their lives longer, healthier, and better.” It can seem naïve and elitist to believe that  one person can make such decisions for another person, but in reality, it is imperative that people believe and act as if it is possible, and the jam experience helps show why this is necessary.

 

None of us know exactly how much each person needs to save for retirement, which health insurance plan will truly be the best possible plan for ourselves or someone else, or which jam is really going to be the one for someone else. But we can generally identify the right direction in each choice for most people. We know people typically don’t save as much for retirement as they should, so defaulting them into a retirement savings plan at 8% is better than defaulting them into no retirement savings plan or a plan that sets aside 3% of their paycheck. Young and healthy people may not believe they need health insurance, but we can auto enroll them into a standard high deductible plan if they don’t actively make a choice for themselves, ensuring they have some type of coverage in the case of a car crash or ski accident. We know most people eat jam with toast or maybe on pancakes, so most people probably aren’t that interested in purchasing a jalapeno jam during their typical weekend grocery store trip. The strawberry can stay at eye level while the jalapeno jam can stay on the top shelf and maybe get a temporary end-cap spot for the holidays.

 

The jam study also shows that people don’t want to be presented with too many options. They will have trouble making a choice and won’t be satisfied with their final decision. Narrowing the range of choices can help people better manage their decisions, and can help ensure they don’t select a plan that is wildly off course for their best interest. This is a basic first step for a choice architect, and reveals the value that choice architects can provide with only a minimal level of paternalistic interference. Choice architects can take things a step further, as Sunstein and Thaler encourage throughout Nudge, but taking a step backward, eliminating the paternalism in choice architecture, doesn’t encourage flourishing by maximizing freedom of choice, it creates paralysis, doubt, and too many options for a person to reasonably consider, especially when dealing with topics more complex than jam.
Paternalistic Choice Architects

Paternalistic Choice Architects

The idea of paternalism in the United States is full of contradictions, challenges, and conflicting opinions. Many people in the country don’t want to be told what to do by anyone, and don’t want to appear as though they are accepting paternalistic messages or nudges. Some people fully buy into the idea of paternalism, looking for prescribed rules and ways of living. And most of us have a mixture of people we view as leaders and role models, from whom we expect paternalistic messages.

 

In the book Nudge, Richard Thaler and Cass Sunstein write, “In our understanding, a policy is paternalistic if it tries to influence choices in a way that will make choosers better off, as judged by themselves” [emphasis in original]. This is the definition I am working with for paternalism. The idea is that someone else can know what is best for us, even if we don’t see it ourselves.

 

I believe that a lot of conflict in the United States today stems from the people and authority figures we are willing to accept paternalistic messages from. Some people in the United States, I include myself in this group, will accept paternalistic messages from university professors, while others will reject their messages. Leaders who we will accept messages from can be religious leaders, community elders, parents, successful business people, or even celebrities. For all of us, there is a set of people that we look to for guidance and advice. A set of people that we believe knows what might be best for us. The fact that our set of leaders can be very different and in some instances be completely discredited by others can lead to a lot of friction across our populace.

 

Nevertheless, what all these figures have in common is that they all can be in a position to be a choice architect. As Thaler and Sunstein write, “A choice architect has the responsibility for organizing the context in which people make decisions.” Business leaders shape the decision context for people’s healthcare, retirement savings, and many other daily choices. Religious leaders can shape the way people think about charitable giving and volunteering. Community leaders can influence the same choices and university professors can influence the way people think about certain situations. In all of these contexts, the way that choices are framed, the choices that are presented as viable options, and how people understand their agency can be influenced by a choice architect.

 

By nature then, choice architects are paternalistic. They are in charge of the form you use to sign up for healthcare, the range of volunteer and charitable activities that are available to you for consideration, and the responses that are considered appropriate for you when thinking about politics, society, and individual behaviors. Someone else presents you with options and decisions they believe are best for you.

 

Choice architects are very important because the way they frame a choice or decision can greatly influence the behaviors of many people. Presumably, choice architects want to maximize the good outcomes that arise from the choices they shape. This means that how they structure decisions, what they consider viable alternatives, and how they build decision frameworks can have huge consequences for what people actually do. A good health benefits sign-up form can influence whether people select a healthcare plan that actually fits their needs. A good sense of where volunteering can do the most good can drive a pastor or community leader to engage their followers in a meaningful way, and a university professor who can frame thoughts and decisions in a meaningful direction can help people think about problems in new and ways. Of course, in each setting, the choice architect could be wrong, and could mislead people, could make an error that hurts people financially, leads to wasted time, or frustrates people. It may be paternalistic to think that a choice architect knows what is best and can guide people toward what is best for them, but the alternative, having the choice architect pull back and not accept this paternalistic responsibility, can have even more serious consequences.