A Nudge in the Wrong Direction
In Nudge (Yale University Press, 2008), authors Richard Thaler and Cass Sunstein try to combine libertarianism and paternalism by arguing that a nudge — "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" — can benefit those nudged, while staying consistent with liberty because it does not force anyone to do anything. Nudge's argument is far from airtight. But even more devastating is its reliance on a false premise. The "market failure" examples it promises to improve are actually government failures. FULL ARTICLE
Comments (22)
Regarding the organ donation issue, if the voluntary buying and selling of human organs in the mareketplace became legal for individuals and companies ("Organs R Us"), would that give violent criminals an incentive to not just stop at stealing your wallet or your car? Why settle for the $50 in cash or $5000 for your vehicle when each of your kidneys are potentially worth $50,000 apiece, too?
It is bad enough that we already have situations in which patients just cannot die fast enough for the doctors who are wanting to remove their organs. I once read about a child killed in an accident who had his organs removed by doctors before his parents could even make it to the hospital to see him one last time. Perhaps, someone on the blog here can alleviate my concerns on this matter.
Published: July 18, 2008 7:57 AM
I think the reason the black market price for kidneys is $50,000 is because the market is illegal. If everyone could freely sell their organs I am sure the price would drop considerably, reducing the incentive for muggers to carry surgical tools.
Published: July 18, 2008 8:29 AM
Great analysis! Thanks! Just goes to show that socialists are not our greatest threat, but the well-meaning do-gooders who want to perfect us! They remind me of my cousin when I was in grade school. We got some baby chicks for Easter and left them in a room with a pan of water while we went outside to play. An hour later we came back and they were all dead. My younger cousin noticed that the chicks weren't drinking the water and he was afraid they would die of thirst, so he forced them to drink and killed them all. I think of that every time someone tries to save me from my bad habits.
Published: July 18, 2008 8:31 AM
First, I don't think it is a piece of cake to steal somebody's kindney and then "sell it" on a free market as it is for a "lifeless" car, which can stay in a garage untouched for weeks, for example. It is a little bit harder, so there are (fortunately) less thiefs capable of accomplishing this...
Second, where the shortage exists, there is a black market too (and there IS a black market, just look at Asian or African countries) which consequently means HIGHER prices and INCREASED motivation for organ-thiefs due to higher transaction costs (same principle as for illegal drug market). May I be wrong or right, but I think that current situation is worse in any aspect...
Published: July 18, 2008 8:37 AM
This seems simply to be the first shot over the bow. One can only conlcude it will start out this way (non-coercive, supposedly anyway) but when it fails the powers that be, the ones who have confiscated the fruits of labor to be redistributed based on their moral values, will shrug their shoulders and say "we tried to be nice about, but if you insist on attacking the public treasury in this way we have no choice but to get rough about it".
It's chilling that discussion of outright behavioral control by "superiors" gets away with having some moral philosophy that should be read and judged on its merits. The fact that people who should be perfectly disinterested in other peoples' affairs aren't does not get the evisceration it deserves. These "nudgers" need to be told to kiss off and mind their own business. They have every right to use their private resources to attempt to communicate and educate in a non-harassing way, sure, but ANYTHING above that, which uses the corridors of power even as a disembarking point is wrong - patently wrong.
More specifically, discussion of making 401k automatic unless opted out of. Will this be mandatory then on the employer to do it this way, or risk punishment? What if they don't make it automatic and leave it up to the employee to volunteer? It would seem that SOMEONE will have to be forced somewhere in the chain of supply to change what is already being done a certain way. Using force would still be the order of the day unless EVERY aspect of the chain of events is purely free.
Again, it's not time to be nice and say "sure we'll read your perspective and comment on it" it's time to say point blank just what constitutes a real interest in anothers affairs that is not born from some transcendental mindset where everyone's problems are everyone else's to solve. A grandiose schizophrenic (albeit mild) is still who he or she is and ANY connection to the "power supply" cannot be good. Their compulsion to meddle will always overcome its timidity to use Force. Don't let them even get a foot in the door. Providing of advice and behavioral control should be based on direct and present contact - families, voluntary associations, friendships, etc. I'm a novice on Austrian Economics, praxeology, etc, but I gather that it bases it's view on Human Action. Human Action is fundementally about immediacy, contact - between one another and us between resources, it's about understanding the limitations of humans, physically and mentally and working within these finite limitations. This nudging non-sense seems to come directly from some sort of oversoul transcendentalism that rose up in 1800's and was the prime ingredient in the rise of Statism ever since. Playing nice with such mentalities isn't going to get us anywhere.
Published: July 18, 2008 8:37 AM
First, I don't think it is a piece of cake to steal somebody's kindney and then "sell it" on a free market as it is for a "lifeless" car, which can stay in a garage untouched for weeks, for example. It is a little bit harder, so there are (fortunately) less thiefs capable of accomplishing this...
Second, where the shortage exists, there is a black market too (and there IS a black market, just look at Asian or African countries) which consequently means HIGHER prices and INCREASED motivation for organ-thiefs due to higher transaction costs (same principle as for illegal drug market). May I be wrong or right, but I think that current situation is worse in any aspect...
Published: July 18, 2008 8:39 AM
First, I don't think it is a piece of cake to steal somebody's kindney and then "sell it" on a free market as it is for a "lifeless" car, which can stay in a garage untouched for weeks, for example. It is a little bit harder, so there are (fortunately) less thiefs capable of accomplishing this...
Second, where the shortage exists, there is a black market too (and there IS a black market, just look at Asian or African countries) which consequently means HIGHER prices and INCREASED motivation for organ-thiefs due to higher transaction costs (same principle as for illegal drug market). May I be wrong or right, but I think that current situation is worse in any aspect...
Published: July 18, 2008 8:39 AM
VERY SORRY FOR POSTING X TIMES... local failure...
Published: July 18, 2008 8:41 AM
"If the voluntary buying and selling of human organs in the mareketplace became legal for individuals and companies ("Organs R Us"), would that give violent criminals an incentive to not just stop at stealing your wallet or your car?"
What stops criminals from doing this currently? Hint: it's not any law. It is estimated that 7,000 to 15,000 of the 70,000 kidney transplants performed each year utilize organs sold on the black market. The distribution network is in place, and the demand is high. The fact that it is illegal to offer your own organs for sale (even after death), means that supply is restricted, so the black market price is high.
Currently, the only incentive to allow your own or a family member's organs to be transplanted is altruism, while there are plenty of psychological disincentives. If organs could be sold, the price would inevitably go down. I, for one, would appreciate knowing that, were I to die, my family would still get some support from me. I think that a lot of people would feel the same way.
Published: July 18, 2008 9:08 AM
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"Libertarian Paternalism" is a misnomer in
any case, as paternalism denotes
authoritarianism at some level of its appli-
cation in society.
For an in-depth analysis of MATERNALISM
and PATERNALISM, read my thoughts
in here, about the ROOT CAUSE of our
political affiliations:
Underlying Psychology of Politics
http://underlyingpsychologyofpolitics.blogspot.com/
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Published: July 18, 2008 9:14 AM
Big Brother is great. We need elitists to "nudge" us in the right direction. Also, if that nudge doesn't work fast enough, they can always (read, will) use the gun hiding in their back pocket to move things along the "right" path.
Give me (a middle-road elitist) your money, I'm sure that I can allocate it better than you, I'm more objective.
Published: July 18, 2008 9:16 AM
A nudge at first, then a gun to your head if you don't comply. That is always the progression.
And God forbid one nudge the government out of the way.
Published: July 18, 2008 9:18 AM
The biggest problem with this opt-out schemes for retirement savings, health care and whatever, is that as government solutions start to get less efficient than free enterprise ones, politicians will feel tempted to use tax money to subsidize them. Now, they may not do that explicitly. They can, for instance, just put those workers under Medicare for the health insurance, as they do now for post office workers, which officially is self-sustained.
With regard to the organs thing, I certainly agree that now there are more incentives to steal organs than if people are free to sell them, but putting that in the front page is a sure way to get labeled as some right-wing fringe, wacko types. At least, it should have been elaborated...
Published: July 18, 2008 9:33 AM
The "market failure" examples it promises to improve are actually government failures.
I have never seen an example of the reverse.
Published: July 18, 2008 9:34 AM
This is a fantastic idea!
Who better to provide moral guidance than Ted Kennedy, Elliot Spitzer, and Larry Craig?
Published: July 18, 2008 10:02 AM
Curt,
It's amazing that all of the so-called free market failures can all be explained by a lack of a true free market, no matter how extreme the case.
But showing this to be true is quite difficult with the way most people see the world...
Published: July 18, 2008 10:42 AM
Thanks for the comments on the organ donation issue.
It is true that organs would probably worth much less if they were not bought and sold on the black market, removing much of the incentive to acquire them illegally; it would be like the effect that legalization would have on the high price of (currently) illegal drugs.
Also, I doubt that most violent criminals would have the surgical skill to effectively acquire them from their victims, but I imagine that would not stop some of them from trying anyway. I am probably just being paranoid about it, since I have read more than one fictional story that revolved around that particular crime.
Published: July 18, 2008 1:23 PM
Calling an event a market failure is akin to saying the recent floods in my area are due to river failure.
Published: July 18, 2008 4:55 PM
"...they are not in fact proposing less intrusive government nudges to replace more intrusive government coercion, but yet still more government on top of what we have today."
Well done, sir. The hallmark of the "Liberal" or statist - which you exposed above - is the deadly tendency to deny the existence of history. In other words, their "clock" always resets to zero with each newly proposed panacea.
With regard to market failure - where is the evidence? The failure of any market to self-correct, over time, is always driven by coercive government, the presence of cartels or more commonly a combination of the two is it not?
Published: July 18, 2008 5:28 PM
What is the illegal organ market? There have been stories circulating around the poor parts of the world that children were either killed or at least temporarily kidnapped and had an organ removed to service the rich fat-asses of the West. Investigations on such stories turn up zilch. Organs aren't lego pieces that can removed and plugged in at will.
Published: July 18, 2008 8:46 PM
The author of the review does not give enough weight in his review to one additional dis-incentive to saving - inflation. There is one line in one paragraph in the review.
Even those who, after all of the government depredations like taxation, still want to save, will suffer from further depredations in the form of monetary inflation. The real value of held cash savings will erode over time, punishing the "responsible" person for holding the cash. Certainly there are inflation resistant stores of value, but the simple fact that dollars themselves lose real value makes it more difficult and less appealing for the "Average Joe" to behave/save responsibly.
Obviously, inflation is a government policy in our current state. The Fed and the banks could not inflate money or credit without the overt or implicit backing of the State.
The "nudge" that is needed is for the Average Joe to demand, if not no government, fiscally responsible behavior from the government. I hold no illusions that fiscally responsible government will happen without revolution. In fact, fiscally responsible government WOULD be a revolution, if revolution is defined as the replacement of the current order with another order of different ideology.
ps - Please to not construe this to read that I am saying there must be a state.
Published: July 19, 2008 10:38 PM
TWLP Sam:
Illegal markets for organs certainly exist:
China - http://www.abc.net.au/news/newsitems/200604/s1619423.htm
Singapore - http://sg.news.yahoo.com/rtrs/20080628/tap-singapore-organs-c3bb44c.html
US - http://nymag.com/news/features/22326/
Published: July 21, 2008 4:31 PM