by Richard H. Thaler and Cass R. Sunstein
The authors, both economists at University of Chicago, advocate what they call “paternal libertarianism” in order to improve an equal footing for all in the areas of health care, marriage, taxes, and so on, without impinging on freedom any more than absolutely necessary. They argue, reasonably, that everyone with a stake in an issue or a semblance of power is, whether they like it or not, a change architect – that even not interfering and allowing totally laissez-faire markets to evolve is still doing something (“If you choose not to decide, you still have made a choice,” as Neil Peart says) – so governments and free markets should do their nudging in a positive and helpful way. For example, making a simple and high-returning investment the default option on a retirement package the default is a nudge that helps those who would be otherwise lost in a sea of legal and economic mumbo-jumbo if the default were “find your own damn retirement package.”
The authors write in a pleasing, non-preachy, conversational style, and make their points clearly, requiring no economic understanding to follow their ideas, many of which are more or less common sense (and thus will never be implemented by our government) while others are intriguing possibilities, such as Save More Tomorrow, which ties savings plan deposits to future raises. Although I enjoyed reading the book, for me it was basically preaching to the converted, without the necessary punch behind the ideas to ever convince any Republican big-government corporate-nanny-state lover. Actually I was expecting it to be more focused on personal, psychological nudges of the kind the authors discuss at the beginning, the way perceptions can deceive, the way self-control strategies can be used to hack one’s own mind, and the values that humans give to losses and gains. When the book hit its political and social manifesto stride, I was slightly disappointed, but the authors’ chummy style and practical ideas kept me interested.