Nudging Towards Socialism

January 8, 2009 8:47 AM by S.M. Oliva (Archive)

The Washington Post reports that Barack Obama will name his friend and former University of Chicago colleague, Cass R. Sunstein, to head the Office of Information and Regulatory Affairs, a subdivision of the Office of Management and Budget: "In his new position, Sunstein will oversee reform of regulations, seeking to find smarter approaches and better results in health, environment and other domestic areas, a transition source said."

Todd Zywicki of the Volokh Conspiracy gushes over Sunstein's appointment: "This is really terrific news and continues the remarkable tradition of the extraordinarily high talent level that has occupied that position over the past many years." High praise coming from an academic who used to do the Federal Trade Commission's dirty laundry for them.

Sunstein is most recently noted for his embrace of "libertarian paternalism," the idea that government should allow markets to function -- except when it produces outcomes more learned people (*cough* Cass Sunstein) don't like. Specifically, Sunstein would allow "choice" but "nudge" people towards a preferred outcome. In his review of Sunstein's "Libertarian Paternslism" (co-authored with Richard H. Thaler), David Gordon explained how this is just another variant of full-blown statism:

In their view, only actions that meet rigid requirements count as full choices. Smokers, research indicates, haven't fully taken into account the heath risks of smoking. Thus, they cannot be said "really" to choose to smoke. Further, people are often subject to so-called "framing" effects: they will "choose" differently when confronted with identical options, depending on how the options are presented. Choices in these circumstances, Thaler and Sunstein aver, are problematic: how can we say that people in the grip of conceptual illusions are freely choosing?

What is left? Given the authors' wide net, few actions count as rational choices. There is thus practically unlimited scope for the state to suppress liberty: in doing so, it is not interfering with what the self "really" wants. True enough, the authors preach a mild doctrine. Nudges, not force, are on their agenda. But they lack a rational basis for this limit. If people do not "really" choose their actions, why not forcibly restrict them? After all, doing so may enable them better to achieve what they "really" want -- as experts, suitably instructed by Thaler and Sunstein, determine.

And of course, Sunstein doesn't really believe in even limited individual freedom. In a previous, solo book, "The Second Bill of Rights: FDR's Unfinished Revolution and
Why We Need It More than Ever" -- the title should be a dead giveaway -- Sunstein argues for a total welfare state under the guise of re-imagining the U.S. Constitution. The Cato Institute's Tom G. Palmer offered this account of Sunstein's theories for National Review:

A new intellectual champion of absolutism has now emerged. Mild-mannered University of Chicago law professor Cass Sunstein has been advancing the radical notion that all rights -- including rights usually held to be "against" the state, such as the right to freedom of speech and the right not to be arbitrarily imprisoned or tortured -- are grants from the state. In a book co-authored with Stephen Holmes, The Cost of Rights, he argued that "all legal rights are, or aspire to be, welfare rights," that is, positive grants from the state. There is no difference in kind between the right not to be tortured and the right to taxpayer-subsidized dental care.

In his new book . . . Sunstein seeks to give constitutional status to welfare rights. The title comes from Franklin Roosevelt's 1944 State of the Union address, in which he proclaimed that "necessitous men are not free men" and proposed a "second Bill of Rights under which a new basis of security and prosperity can be established for all." Among the rights FDR proposed were the rights to "a useful and remunerative job," "a decent home," "adequate medical care and the opportunity to achieve and enjoy good health," "adequate protection from the economic fears of old age, sickness, accident, and unemployment," and "a good education."

The mere assertion of those rights isn't enough for Sunstein; he wants to endow them with constitutional status, like the rights that are actually mentioned in the Constitution. He admits that "the founding document does not refer to them, and it is not seriously argued that they are encompassed by anything in the Constitution" -- yet on the next page he states that "if the nation becomes committed to certain rights, they may migrate into the Constitution itself". Later on, he asserts that "at a minimum, the second bill should be seen as part and parcel of America's constitutive commitments. Roosevelt's speech proposing the second bill deserves a place among the great documents in the nation's history. Indeed, it can be seen as occupying a place akin to the Declaration of Independence, or perhaps somewhere between the Declaration and the Constitution."

And in case you were wondering -- no, Sunstein isn't an Austrian:

Sunstein insists that without government protection no one would enjoy anything of value, and therefore that all value must be attributed to the action of the state: "Government is 'implicated' in everything people own. . . . If rich people have a great deal of money, it is because the government furnishes a system in which they are entitled to have and keep that money."

The problem here is that Sunstein's economic theory of value is stuck in the period of the classical economists, who tried to attribute all value to one necessary factor of production; for them, that was labor. Sunstein merely substitutes what he has decided is the one necessary factor: the state. But after the "marginal revolution" in economics (circa 1871), no serious thinker should make such a mistake. It is now recognized that we make choices across a great many margins, and that value is not created by a single necessary factor. If that were not so, we could say that farmers produce all value, since without food none of the rest of us would produce anything else; likewise, for other groups and factors of production. The theory of value on which Sunstein rests his case for the welfare state is remarkably naive and primitive.

Still, you have to applaud Obama for bringing such a smart, talented and accomplished man like Cass Sunstein into his fledgling administration. Because just having such a guy around will make government work better. Right? Right?