No Comment — April 27, 2009, 10:12 am

The Nudge

Franklin Foer and Noam Scheiber take a look at Barack Obama’s attitude towards the political economy. The economic crisis dwarfs the other crises that Obama inherited, and his engagement of economic issues remains rather puzzling. But I think Foer and Scheiber are well onto the philosophy and process angles of this puzzle, and their piece is an essential read:

There are no grand theorists in the Obama orbit, certainly no in-house ideologists. During the campaign, Obama sold himself as a green-eyeshade pragmatist, insisting every one of his proposals was “paid for.” But, in fact, there is, if not an ideology, then certainly a sensibility that reigns in Obamaland. Perhaps the easiest place to see it is in the administration’s fondness for behavioral economics, the branch of the dismal science that recognizes that humans aren’t utility-maximizing automatons, but flawed creatures who often screw up simple calculations and struggle with self-control. The key behavioral insight is that the way we frame choices matters enormously. Take a classic behavioral example: pensions. In a fully rational world, everyone would enroll in their company’s 401(k), which provides a financial incentive to save for retirement. In the real world, we frequently put off enrollment, not wanting to weigh all the confusing options or fill out tedious paperwork. If, on the other hand, our employer enrolled us automatically but allowed us to opt out, most would stick with it. Simply by changing the “default” option from out to in, we improve workers’ welfare without limiting their freedom.

[Richard] Thaler and [Cass] Sunstein have dubbed this policymaking approach “libertarian paternalism,” and it was highly influential within the campaign. For example, in addition to the retirement saving reform, which Obama later wrote into his budget, the campaign also warmed to a proposal called “intelligent assignment.” The idea was a response to the fact that seniors enrolled in the Medicare prescription drug program are often overwhelmed by the dozens of plans they have to choose from, sometimes to the point of paralysis. The Obama wonks favored automatically enrolling many of them in the plan that best suited their needs, based on their drug-buying histories, then allowing them to switch if they found one they liked better.

In the grand scheme of things, these “nudges” were minor tweaks designed to elicit more rational behavior. But, in many respects, what the Obama administration has done these last few months is simply scale up the logic of nudging, albeit massively. Not all of Obama’s nudges fall out of behavioral economics, per se. Some involve changing incentives to encourage certain activities and discourage others. Some involve fostering competition to trigger innovation. But, as in the behavioral examples, the Obamanauts typically have an outcome they want to promote. And, like the behaviorists, they instinctively recoil from imposing it unilaterally. So, instead, they monkey around with the choices people face, seeking to influence decision-making rather than mandate decisions.

Share
Single Page

More from Scott Horton:

Conversation August 5, 2016, 12:08 pm

Lincoln’s Party

Sidney Blumenthal on the origins of the Republican Party, the fallout from Clinton’s emails, and his new biography of Abraham Lincoln

Conversation March 30, 2016, 3:44 pm

Burn Pits

Joseph Hickman discusses his new book, The Burn Pits, which tells the story of thousands of U.S. soldiers who, after returning from Iraq and Afghanistan, have developed rare cancers and respiratory diseases.

Context, No Comment August 28, 2015, 12:16 pm

Beltway Secrecy

In five easy lessons

Get access to 165 years of
Harper’s for only $45.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

September 2016

Only an Apocalypse Can Save Us Now

= Subscribers only.
Sign in here.
Subscribe here.

The Watchmen

= Subscribers only.
Sign in here.
Subscribe here.

Acceptable Losses

= Subscribers only.
Sign in here.
Subscribe here.

Home

= Subscribers only.
Sign in here.
Subscribe here.

Tennis Lessons

= Subscribers only.
Sign in here.
Subscribe here.

Tearing Up the Map

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Post
 
Andrew Cockburn on the Saudi slaughter in Yemen, Alan Jacobs on the disappearance of Christian intellectuals, a forum on a post-Obama foreign policy, a story by Alice McDermott, and more
Artwork by Ingo Günther
Article
Land of Sod·

= Subscribers only.
Sign in here.
Subscribe here.

Nobody in academia had ever witnessed or even heard of a performance like this before. In just a few years, in the early 1950s, a University of Pennsylvania graduate student — a student, in his twenties — had taken over an entire field of study, linguistics, and stood it on its head and hardened it from a spongy so-called “social science” into a real science, a hard science, and put his name on it: Noam Chomsky.

At the time, Chomsky was still finishing his doctoral dissertation for Penn, where he had completed his graduate-school course work. But at bedtime and in his heart of hearts he was living in Boston as a junior member of Harvard’s Society of Fellows, and creating a Harvard-level name for himself.

Photograph by Mike Slack
Article
The Watchmen·

= Subscribers only.
Sign in here.
Subscribe here.

Nobody in academia had ever witnessed or even heard of a performance like this before. In just a few years, in the early 1950s, a University of Pennsylvania graduate student — a student, in his twenties — had taken over an entire field of study, linguistics, and stood it on its head and hardened it from a spongy so-called “social science” into a real science, a hard science, and put his name on it: Noam Chomsky.

At the time, Chomsky was still finishing his doctoral dissertation for Penn, where he had completed his graduate-school course work. But at bedtime and in his heart of hearts he was living in Boston as a junior member of Harvard’s Society of Fellows, and creating a Harvard-level name for himself.

Illustration by John Ritter
Article
The Origins of Speech·

= Subscribers only.
Sign in here.
Subscribe here.

"To Chomsky...every child’s language organ could use the 'deep structure,' 'universal grammar,' and 'language acquisition device' he was born with to express what he had to say, no matter whether it came out of his mouth in English or Urdu or Nagamese."
Illustration (detail) by Darrel Rees. Source photograph © Miroslav Dakov/Alamy Live News
Article
Acceptable Losses·

= Subscribers only.
Sign in here.
Subscribe here.

Nobody in academia had ever witnessed or even heard of a performance like this before. In just a few years, in the early 1950s, a University of Pennsylvania graduate student — a student, in his twenties — had taken over an entire field of study, linguistics, and stood it on its head and hardened it from a spongy so-called “social science” into a real science, a hard science, and put his name on it: Noam Chomsky.

At the time, Chomsky was still finishing his doctoral dissertation for Penn, where he had completed his graduate-school course work. But at bedtime and in his heart of hearts he was living in Boston as a junior member of Harvard’s Society of Fellows, and creating a Harvard-level name for himself.

Photograph by Alex Potter

Chances that college students select as “most desirable‚” the same face chosen by the chickens:

49 in 50

Most of the United States’ 36,000 yearly bunk-bed injuries involve male victims.

In Italy, a legislator called for parents who feed their children vegan diets to be sentenced to up to six years in prison, and in Sweden, a woman attempted to vindicate her theft of six pairs of underwear by claiming she had severe diarrhea.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Mississippi Drift

By

Matt was happy enough to sustain himself on the detritus of a world he saw as careening toward self-destruction, and equally happy to scam a government he despised. 'I’m glad everyone’s so wasteful,' he told me. 'It supports my lifestyle.'

Subscribe Today