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My article on Libertarian Paternalism: (currently not accepted because the entry exists with a mistaken redirect - trying to solve that)[edit]

The term Libertarian paternalism was coined by behavioral economist Richard Thaler and legal scholar Cass Sunstein in a 2003 article in the American Economic Review.[1] The authors developed their ideas in a longer article in the University of Chicago Law Review that same year.[2] They propose that libertarian paternalism is paternalism in the sense that ”it attempts to influence the choices of affected parties in a way that will make choosers better off.” (p. 1162) It is libertarian in the sense that it aims to ensure that ”people should be free to opt out of specified arrangements if they choose to do so.” (p. 1161) The possibility to opt out is said to ”preserve freedom of choice” (p. 1182). Thaler and Sunstein published a book-length defense of this political doctrine in 2008 (new edition 2009)[3]

Libertarian paternalism is similar to Asymmetric paternalism, which refers to policies designed to help people who behave irrationally and so are not advancing their own interests, while interfering only minimally with people who behave rationally.[4] Such policies are also asymmetric in the sense that they should be acceptable both to those who believe that people behave rationally and to those who believe that people often behave irrationally.

Examples of policies[edit]

Consider the default contribution rates on defined contribution tax-deferred retirement savings plans in the United States. Until recently, the default contribution rate for most plans was zero, and despite the enormous tax advantages, many people took years to start contributing if they ever did. Behavioral economists attribute this to the "status quo bias", the common human resistance to changing one's behavior, combined with another common problem: the tendency to procrastinate. Research by behavioral economists demonstrated, moreover, that firms which raised the default rate instantly and dramatically raised the contribution rates of their employees.[5]

Raising default contribution rates is also an example of asymmetric paternalism. Those who are making an informed deliberate choice to put aside zero percent of their income in tax deferred savings still have this option, but those who were not saving simply out of inertia or due to procrastination are helped by higher default contribution rates. It is also asymmetric in the second sense: If you do not believe that defaults matter, because you believe that people will make rational decisions about something as important as retirement saving, then you should not care about the default rate. If you believe that defaults matter, on the other hand, you should want to set defaults at the level that you believe will be best for the largest number of people.

Criticism of the choice of term[edit]

There has been much critique of the term "libertarian paternalism". For example, it fails to appreciate the traditional libertarian concern with coercion in particular, rather than with freedom of choice in a wider sense.[6] It also aims to promote wellbeing, when there may be more libertarian aims that could be promoted, such as maximizing future liberty.[7]

See also[edit]


  1. ^ Thaler, Richard and Sunstein, Cass. 2003. "Libertarian Paternalism". The American Economic Review 93: 175-179.
  2. ^ Sunstein, CassThaler, Richard. 2003. "Libertarian Paternalism is Not an Oxymoron". University of Chicago Law Review 70(4): 1159-1202.
  3. ^ Thaler, R.H. and Sunstein, C.R. 2009. Nudge: Improving Decisions About Health, Wealth and Happiness. 2d edition. New York: Penguin Books.
  4. ^ Colin Camerer, Samuel Issacharoff, George Loewenstein, Ted O’Donoghue, & Matthew Rabin. 2003. Regulation for Conservatives: Behavioral Economics and the Case for “Assmymetric Paternalism”. 151 University of Pennsylvania Law Review 101: 1211-1254.
  5. ^ Thaler, R.H. and Benartzi, S. 2004. "Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving". Journal of Political Economy 112:164-187.
  6. ^ Klein, Daniel B. 2004. "Statist Quo Bias" Economic Journal Watch 1: 260-271.
  7. ^ Mitchell, Gregory. 2004-2005. "Libertarian Paternalism Is an Oxymoron" Northwestern University Law Review 99: 1245-1277.

Further reading[edit]

External links[edit]

Category:Libertarian terms Category:Political philosophy Category:Political theories Category:Social philosophy Category:Neologisms