For someone who reads a lot, I’ll be the first to admit that it takes me a hell of a long time to read some of my books. I bought Nudge in October 2017, alongside five other books (two of which remain unread) and only finished it relatively recently, despite its easy page count of 260. I can be very bad at this.
Economics 101 will teach you that man is rational and makes rational economic decisions. It is not the benevolence of the butcher that compels him to sell his meat (side note: can a butcher ever be benevolent?), but his rational self-interest in making money to support himself, and all that. Unfortunately, we are very rarely rational, frequently making irrational, incompetent and foolish decisions about everything, from who to date to where to go to school (insofar as rationality is universal rather than individualised).
Behavioural economics is the discipline which jumps on this, providing economic analysis with a psychological bent. Richard Thaler and Cass Sunstein’s Nudge does just this, arguing that much of life can be improved with small, psychologically influential adjustments which would maintain freedom of choice as per ‘libertarian paternalism,’ the doctrine they have coined.
Think of a school canteen. The layout of the food will subtly influence the food which children eat; if chips are easier to access than the salad, then the chips will be eaten. The same applies to a menu or the placement of bathrooms in an office building. If we know that layouts (‘choice architecture,’ as Thaler and Sunstein describe it) influence choices, why not structure those presentations to create better outcomes? In the school canteen, the salad would be featured prominently over chips, leading to higher salad consumption and a healthier student populace.
From this opening scenario, Thaler and Sunstein take the reader on a journey through innumerable examples, articulating why the nudge theory is best placed to improve people’s lives instead of government mandates or the like. I found it appealing for two reasons. Firstly, we are all influenced, and we are all influencers; by taking small steps we can better our own decision-making and have a greater, more positive (or negative, but let’s not go there) impact on the lives of others, changing the world with baby steps. Secondly, it is a compromise between statism and libertarianism, the divide which, well, divides much of politics, providing relatively easy solutions to complex problems. Maybe libertarian paternalism really is the answer to the world’s ills.
However, the steam of Nudge begins to evaporate in the middle, as Thaler and Sunstein’s well-thought-out policy pitches seem designed to persuade potential consultancy clients (note: I have no idea if they actually are consultants) more so than the average reader. Alternatively, I, a 19-year-old boy, am not the target market for deep dives into finance.
But even those detailed pitches which are quite interesting feel somewhat lacking. There is a chapter on privatising marriage, for example, arguing that there’s little justification for the state to be the arbiter of marriage when it is an entirely private affair. As the chapter is written, though, it comes across as more of an appeasement of churches which are not keen on same-sex marriages. If marriage ceremonies are at the discretion of private institutions, churches are free to marry whomever they please (heterosexual people). But what of the individual freedoms of the LGBT+ community who’d find it significantly trickier to tie the knot? By siding with religious freedom over the freedom to love, Nudge looks a bit dated (it was published in 2008, years before same-sex marriage was legalised in the USA, UK and so forth).
Truthfully, I’d be very interested in reading an updated version. The world has changed considerably in the past ten years, where radical solutions are now yearned for over more managerial nudges. Thaler and Sunstein frequently reference the status quo bias in decision-making, which has suffered some major blows from the forces of Brexit and Trump. Do these portions of the book still hold up? Moreover, when it comes to nudging children to choose healthier foods, why not just make the healthy food the only option available? This restricts freedom of choice, would be the answer, but is freedom of choice worth it over the health of ourselves and of the planet? I don’t know the answers, but they’re worth debating.
That doesn’t mean there isn’t a place for nudges. A particularly interesting idea towards the end of the book is a browser add-on which will detect angry emails, prompting a warning flash asking the user if they really wish to send this email. Adapting this for the world of 2018, wouldn’t it be good if, every time President Trump went to hit send on his tweet, his phone or computer asked whether he’d like to cool off first – or, better yet, blocked the sending of anything angry altogether? When it comes to anger on social media, asking people to think twice when they type may prove more effective than just banning people or platforms.
Broadly, though, I’d recommend Nudge to anybody interested in improving decision-making and understanding the links between psychology and economics, which will never cease to be fascinating. Thaler and Sunstein are witty, self-aware writers, with enormous respective bodies of work (Sunstein has written a book on Star Wars, which I am so reading in 2019) to delve into.
Now, the real question: will this nudge of a review work?