SIGN IN to access Harper’s Magazine
1. Sign in to Customer Care using your account number or postal address.
2. Select Email/Password Information.
3. Enter your new information and click on Save My Changes.
Subscribers can find additional help here. Not a subscriber? Subscribe today!
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.
More from Scott Horton:
Six Questions — October 18, 2014, 8:00 pm
Nathaniel Raymond on CIA interrogation techniques.
Estimated percentage of New Hampshire’s bat population that died in 2010:
A horticulturalist in Florida announced a new low-carb potato.
In Peru, a 51-year-old activist became the first former sex worker to run for the national legislature. “I’m going to put order,” she said, “in that big brothel which is Congress.”
Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!
“Civilization masks us with a screen, from ourselves and from one another, with thin depth of unreality. We habitually live — do we not? — in a world self-created, half established, of false values arbitrarily upheld, largely inspired by misconception, misapprehension, wrong perspective, and defective proportion, misapplication.”