“Preferences, Paternalism, and Liberty”

Summary

Our goal in this chapter is to draw on empirical work about preference formation and welfare to propose a distinctive form of paternalism, libertarian in spirit, one that should be acceptable to those who are firmly committed to freedom of choice on grounds of either autonomy or welfare. Indeed, we urge that a kind of ‘libertarian paternalism’ provides a basis for both understanding and rethinking many social practices, including those that deal with worker welfare, consumer protection, and the family.

In the process of defending these claims, we intend to make some objections to widely held beliefs about both freedom of choice and paternalism. Our major emphasis is on the fact that in many domains, people lack clear, stable, or well-ordered preferences. What they choose is strongly influenced by details of the context in which they make their choice, for example default rules, framing effects (that is, the wording of possible options), and starting points. These contextual influences render the very meaning of the term ‘preferences’ unclear. If social planners are asked to respect preferences, or if they are told that respect for preferences promotes well-being, they will often be unable to know what they should do.

Consider the question whether to undergo a risky medical procedure. When people are told, ‘Of those who undergo this procedure, 90 percent are still alive after five years,’ they are far more likely to agree to the procedure than when they are told, ‘Of those who undergo this procedure, 10 percent are dead after five years’ (Redelmeier, Rozin, & Kahneman, 1993, p. 73).