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Nudge and Interventionism

Posted October. 11, 2017 07:36,   

Updated October. 11, 2017 09:01


The British government picks up 200,000 bags of garbage, which amount to 7,500 tons, in the streets every year. Back in June 2015, Clean Up Britain, an environmental protection group, asked behavioral economists for help after a series of campaigns was found to be ineffective. Economists took notice that littering was an unconscious behavior committed because people believe it will go unnoticed. The solution to this was to recommend fast food restaurants to write names of purchasers on the package of their food items. This experiment of unveiling responsibility is still underway.

People will tremble with fear if a pilot announces “the possibility of a crash is extremely low” right before the take-off. Behavioral economics considers that humans are irrational and passive beings who rely on intuition. That is why irrational fear such as the mad cow disease controversy easily spreads and people suffer through spam mails just because they cannot be bothered to click on unsubscribe button.

University of Chicago Prof. Richard H. Thaler said in his 2008 best-selling book “Nudge” that government can nudge intuitive and lazy people into positive directions. His effort to graft behavioral economics onto reality was rewarded by the Nobel Prize in Economic Sciences this year. Men’s toilet in the Amsterdam airport is often touted as the effect of nudging. A picture of a fly in the urinals reduced spillage by 80 percent.

The concept of nudge emphasizing interventionism corresponds to liberalism that expresses big government. The previous conservative government of South Korea failed in imbedding nudge in regulation reform. Most of all, the idea of nudge is based on a philosophy that government can choose an answer for people who often agonize over complicated problems. However, nudge should not be abused. For instance, not refusing to donate organs should not be considered as an agreement to organ donation. Cass Sunstein, co-author of Nudge, included a strong warning in his next book “Simpler,” claiming that government is not supposed to use the basic rules of voting to entrench itself.