On the justification and possibilities of soft paternalism

Thesis 1: Even employing soft incentives like ‘nudges’ which – at least in principle – do not impair the affected individuals’ freedom to decide, soft (or libertarian) paternalism faces the same problem any other kind of paternalism does: What justifies government interventions in individuals’ decisions if no third parties’ interests are involved? The only possibility for such a justification available so far is the idea of collective self-binding as proposed by G. Brennan and L. Lomasky (1983).

Political interventions into market processes are usually justified by the existence of external effects and/or public goods. Here, rights and interests of third parties are crucial. The goal is to compensate positive as well as negative effects of (legitimate) individual actions on uninvolved third parties. In contrast to this, the rights and interests of third parties are not at the core of paternalistic measures. Their objective is to help citizens make decisions that are in their own best interest.

To influence individuals contrary to their own preferences is – at least at first glance – in conflict with the traditional vision of normative individualism. According to this concept, it is the values of autonomous individuals alone that ought to be relevant in society, and nobody has the right to prescribe to others which values to accept. This concept also underlies (traditional) normative economics, i.e. welfare economics, and it is rendered concrete in the concept of consumer sovereignty. However, paternalism does not have to be seen in contradiction to this normative concept as soon as, following the philosophical tradition, we accept that humans are able to reflect their own behaviour. This implies that they possess hierarchically ordered preference functions; they are capable of evaluating their short-term preferences with their superordinated reflexive (long-term) preferences ...

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