The growth in behavioural science has given a new foundation for paternalistic government interventions. Governments now try to help “biased” humans make better decisions – from nudging them to pay their taxes on time, to constraining the size of the soda they can buy, to making them save for that retirement so far in the future.
There is no shortage of critics of these interventions. Are people actually biased? Do these interventions change behaviour or improve outcomes for the better? Is an also biased government the right agent to fix these problems? Ultimately, do the costs outweigh the benefits of government action?
In The Tyranny of Utility: Behavioral Social Science and the Rise of Paternalism, Gilles Saint-Paul points out the danger in this line of defence. By fighting the utilitarian battle based on costs and benefits, there will almost certainly be circumstances in which the scientific evidence on human behaviour and the effect of the interventions will point in the freedom-reducing direction. Arguing about whether a certain behaviour is rational at best leads to an empirical debate. Similarly, arguments about the irrationality of government can be countered by empirical debate on how particular government interventions change behaviour and outcomes.
As a result, Saint-Paul argues that:
[I]f we want to provide intellectual foundations for limited governments, we cannot do it merely on the basis of instrumental arguments. Instead, we need a system of values that delivers those limits and such a system cannot be utilitarian.
Saint-Paul argues that part of the problem is that the utilitarian approach is the backbone of neoclassical economics – once (and still in some respects) a major source of arguments in favour of freedom. Now that the assumptions about human behaviour underpinning many neoclassical models are seen to no longer hold, you are still left with utility maximisation as the policy objective. As Saint-Paul writes:
It should be emphasized that the drift toward paternalism is entirely consistent with the research program of traditional economics, which supposes that policies should be advocated on the basis of a consequentialist cost-benefit analysis, using some appropriate social welfare function. Paternalism then derives naturally from these premises, by simply adding empirical knowledge about how people actually behave …
When Saint-Paul describes the practical costs of this increased paternalism, his choice of examples often make it hard to share his anger. One of his prime cases of infringed liberty is a five-times public transport molester who is banned from using the train as a court determined he lacked the self-control to travelling on it. On gun control laws he suggests authoritarian governments could rise in the absence of an armed citizenry.
Still, some of the other stories (or even these more extreme examples) lead to an important point. Saint-Paul points out that many of these interventions extend beyond the initial cause of the problem and impose responsibility on people for the failings of others. For example, in many countries you need a pool fence even if don’t have kids. You effectively need to look after other people’s children. Similarly, liquor laws can extend to preventing sales to people who are drunk or likely to drive. Where does the chain of responsibility transfer stop?
One of the more interesting threads in the book concerns what the objective of policy is. Is it consumption? Or happiness? And based on this objective, how far does the utilitarian argument extend. If it is happiness, should we just load everyone up with Prozac? And then what of the flow on costs if everyone decides to check out and be happy?
What if a cardiologist decides that experts and studies are right, that it’s stupid after all to buy a glossy Lamborghini, and dumps a few of his patients in order to take more time off with his family? How is the well-being of the patients affected? What if that entrepreneur who works seventy hours a week to gain market shares calls it a day and closes his factory? In a market society the pursuit of status and material achievement is obtained through voluntary exchange, and must thus benefit somebody else. Owning a Lamborghini is futile, but curing a heart disease is not. The cardiologist may be selfish and alienated; he makes his neighbors feel bad; and he is tired of the Lamborghini. His foolishness, however, has improved the lives of many people, even by the standards of happiness researchers. Competition to achieve status may be unpleasant to my future incarnations and those of my neighbors, but it increases the welfare of those who buy the goods I am producing to achieve this goal.
Saint-Paul’s response to these problems – presented more as suggestions than a manifesto, and thinly summarised in only two pages at the end of the book – is not to ignore science but to set some limits:
I am not advocating that scientific evidence should be disregarded in the decision-making process. That is obviously a recipe for poor outcomes. Instead, I am pointing out that the increased power and reliability of Science makes it all the more important that strict limits define what is an acceptable government intervention and that it is socially accepted that policies which trespass those limits cannot be implemented regardless of their alleged beneficial outcomes. We are going in the opposite direction from such discipline.
These limits could involve a minimal redistributive state to rule out absolute poverty – allowing some values to supersede freedom – but these values would not include “statistical notions of public health or aggregate happiness”, nor most forms of strong paternalism.
But despite pointing to the dangers of utilitarian arguments against paternalistic interventions, Saint-Paul finds them hard to resist. He regularly refers the biases of government, noting the irony that “the government could well offset such deficiencies with its own policy tools but soon chose not to by having high public deficits and low interest rates.” And when it comes to his picture of his preferred world it has a utilitarian flavour itself.
Being treated by society as responsible and unitary goes a long way toward eliciting responsible and unitary behavior. The incentives to solve my own behavioral problems are much larger if I expect society to hold me responsible for the consequences of my actions.