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Paternalism in Economics

Daniel M. Haybron and Anna Alexandrova Draft (please do not cite without permission; comments welcome 1): March 24, 2011

1 Introduction
Economists are notoriously averse to paternalism. Yet the reigning methods of policy analysis in normative economics frequently counsel profoundly paternalistic policies. Or so we shall argue. We take our cue from the current debate over the use of happiness and other psychological measures of well-being in economics. The debate concerns those who take happiness to be a relevant policy consideration, employing the methods of psychology to study the impact of economic policies on well-being, and those who dont. We will call the former approach happinessdriven economics (HDE) and the most important variety of the latter minimalism. 2 Minimalists argue that economics should minimize its normative commitments by adopting a preference satisfaction theory of well-being and a decision procedure based solely on optimizing preference satisfaction; and, crucially, minimizing its use of psychological notions, relying instead on an austere methodology of revealed preferencechoice, in a loose manner of speaking. 3 Happiness-driven economics need not take happiness to be the sole, or even a central, focus of normative economics; it may see it only as one significant concern among others. But it does trade freely in psychological notions like happiness, asserting that economic policy analysis must go beyond a narrow focus on choice behavior. For convenience, our discussion centers on happiness, using that term loosely to refer to mental states like subjective well-being, life satisfaction, or emotional well-being, which have dominated recent discussion of well-being policy. However, the argument more broadly concerns the use of well-being indicators for policy, and the points made about happiness will generally apply to well-being, on any of the major theories of well-being. Strictly speaking, it may be more accurate to speak of well-being-driven economics, but less perspicuous since our target is a form of welfare economics. Happiness-driven economics has been widely accused of paternalism and a general failure to respect individual priorities, particularly by friends of minimalism. Roughly, the worry is twofold: first, HDE imposes a substantive value, happiness, on people rather than letting them decide whats important in their lives; second, HDE intrudes on the private concerns of citizens, inserting policymakers into a highly personal domain, the pursuit of happiness. Governments should, at most, help individuals increase their freedom to choose as they see fit, for happiness or whatever, and otherwise get out of the way. Such critiques, we will argue, are well-founded in

This is an early draft, with incomplete references, though we indicate most sources we plan to cite; suggestions for references we may have overlooked most welcome. Since the paper is long, readers in a hurry will find the core argument in Section 4. 2 One need not be a minimalist to oppose HDE, but minimalism exemplifies the main strand of opposition within economics. As well, our chief target in this paper is the minimalist exclusion of psychological phenomena generally from economics, not just happiness. 3 Loose, because revealed preference does not distinguish between choices and other forms of behavior, including involuntary behavior; indeed, thermostats make choices in this sense.

relation to some forms of HDE; but the objections fail regarding other varieties of HDE: there is nothing inherently paternalistic about happiness-driven economics. The question of paternalism in HDE raises broader questions, however, about the potential for paternalism in economic policy analysis. Paternalism, we will see, is surprisingly difficult to avoid. But one approach that especially lends itself to deeply objectionable forms of paternalism, ironically, is minimalism. This claim will occupy the lions share of the paper. Doubling the irony is the fact that HDE can be an important, perhaps essential, tool for avoiding paternalism. In short, the minimalist critics of HDE have gotten things almost exactly backwards when it comes to the avoidance of paternalism. Even where HDE legitimately offends antipaternalist sensibilities, few of the measures actually proposed for HDE even approach the extent to which minimalist policies can disregard the highest priorities of their supposed beneficiaries, indeed amounting to hard paternalism. We need not fear that the proponents of HDE will impose a demeaning nanny state on us; to a significant extent, minimalist economic policy has already done so. HDE, indeed, is part of the way out: though more complex and less precise than minimalism, HDE exhibits greater fidelity to human nature, human values, and the economy. We want to stress at the outset that our target is by no means the whole of mainstream economics. To a great degree our criticisms aim not at economists but at policymakers and agencies who have taken up principles inspired by minimalism in setting policies. Nor are we calling for a revolution in economics. For all we can tell, introductory economics classes might proceed largely as before. Plenty of economists have already abandoned minimalism, and might regard our discussion as congenial to their efforts. Yet our target, minimalism, nonetheless constitutes a huge strain, perhaps the largest portion, of economic thought. We begin with a characterization of minimalism. Then, using a broad definition of paternalism, we examine the antipaternalist credentials of minimalism and find them wanting. Finally, we consider how policymakers might avoid, or at least minimize, paternalism, arguing that HDE should be part of a less paternalistic approach to policy analysis. 4

2. What is minimalism?
In standard economics minimalism takes the form of two commitments: epistemological and normative. In this paper we focus on the latter, but it will help to briefly characterize epistemological minimalism. It stresses observability, precision and parsimony. 5 Observability is a requirement that applies to economists characterization of preferences. According to the Revealed Preference Methodology (hereafter RPM), unobservable psychological quantities, such as happiness, commitments or other mental states, should not be part of economic theory or economic explanations. In its strong form RPM takes any psychological phenomena to be, by definition, outside the scope of economics. That is, as far as economics is concerned, preferences just are choices. On this view, the term preference in economics refers to observed behavior, not to the psychological state that may cause or explain this behavior, and the term utility refers just to the numerical representation of these choices. Alternatively RPM can take the evidential form that choice behavior is the only admissible evidence in economics. Heres a recent endorsement of RPM:
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A couple of caveats: for convenience, we will sometimes speak loosely of policy analyses as being paternalistic, even if paternalism only emerges in their application. Second, our discussion of HDE sets aside concerns unrelated to paternalism such as measurement, and does not try to mount a general defense of HDE. For the latter, see Tiberius and Haybron, Normative Foundations for Well-Being Policy (in progress). 5 See Alexandrova and Haybron forthcoming for more on epistemological minimalism.

Economic phenomena consist of individual choices and their aggregates and do not include hedonic values of utilities or feelings. Therefore, it is not relevant for an economic model to explore the feelings associated with economic choices. The point of revealed preference theory is to separate the theory of decision making from the analysis of emotional consequences of decisions. (Gul and Pesendorfer 2008 40) And more strikingly: Populating economic models with flesh-and-blood human beings, was never the objective of economists. (Ibid 43) Precision and parsimony are requirements on economic explanations. They should be formulated using formal deductive models with a minimum number of assumptions, which do not generally need to be a faithful representation of social reality. Gul and Pesendorfer provocatively embrace the term mindless economics for this minimalist view of their field: minimalist economics is, literally, mindless economics. Normative minimalism is a set of implicit principles of welfare economics. It purports to keep value commitments to a minimum, if not to avoid them altogether, notably by orienting normative economics solely toward the satisfaction of preferences, and thus (ostensibly) deferring to individuals own value judgments. Normative minimalists usually adopt an actual preference satisfaction theory of well-being and welfarism, the view that only well-being is morally significant. These assumptions are not an explicit part of economic theory and there are certainly economists who do not endorse them. But they are so common as to be definitive of standard welfare economics 6; or, as Edward Glaeser recently put it, they constitute the moral heart of economics: Improvements in welfare occur when there are improvements in utility, and those occur only when an individual gets an option that wasnt previously available. We typically prove that someones welfare has increased when the person has an increased set of choices. When we make that assumption (which is hotly contested by some people, especially psychologists), we essentially assume that the fundamental objective of public policy is to increase freedom of choice. 7 Of course, providing policy recommendations requires more than the preference theory of wellbeing and welfarism. We also need principles of aggregation of individual preferences at a societal level. Here, normative minimalists have two procedures to offer: the Pareto Principle and Cost-Benefit Analysis (hereafter CBA). Since the Pareto Principle has a very narrow range of

As Hausman and McPherson show, the fundamentals of welfare economics can be deduced from a) economic theory of rationality (as consistency and expected utility maximization), b) the standard assumption of perfect knowledge, including of knowledge of what is good for you and c) the standard assumption that individuals are selfinterested. If in addition to that we assume that it is good to make people better off, it follows that, Pareto improvements are morally good (H&McP 1996 42-43). 7 NYTimes January 25th 2011 http://economix.blogs.nytimes.com/2011/01/25/the-moral-heart-ofeconomics/?scp=3&sq=glaeser&st=cse

application (that is, only to cases where there are no losers from a proposed policy), we shall concentrate on CBA. In its classic form, CBA is a minimalist procedure par excellence. It requires only one extra step beyond Pareto efficiency: an outcome favored by CBA is a potential Pareto improvement if the losers under the proposed policy could be compensated by the winners, a condition known as Kaldor-Hicks efficiency. CBA attempts to provide a decision criterion without relying on any interpersonal comparisons of psychological states, without incorporating moral and political values, without engaging in any deliberation about the relative merits of the policy proposals in question and often without even actually talking to or otherwise communicating with the affected parties. Instead, CBA proposes that we canvass actual raw preferences for a policy by willingness of the affected parties to pay for this policy, often using merely past choices in similar situations as the indicators of preferences. Once the preferences of all affected parties are represented by the present monetary value and aggregated (without consideration for their comparative wealth or any other morally relevant factors), the benefits of adopting a project must be compared to its costs. This standard form of CBA has elicited much criticism and many proposed fixes for its shortcomings. 8 It can be adjusted to take some account of inequality of income and to ignore anti-social, uninformed and other objectionable preferences. Indeed, Adler and Posner urge that textbook CBA is much more objectionable than the CBA as it is actually used by various agencies (RRR), because intelligent users inevitably import values that classic CBA misses and adjust it accordingly. We are aware of these possibilities 9 and we are even prepared to grant that CBA is often the best available procedure. But nevertheless, in its classic formulation CBA does retain a powerful hold on public policy discussions and it is important to understand exactly where it goes wrong. So here our target is the sort of CBA that eschews all values except as they appear in preferences and takes preferences to be fully revealed by choices. Let us call this Minimalist CBA or MCBA. Here we are concerned with one problem that, as far as we can tell, has been overlooked by the critics of MCBA. It can override values and commitments that people hold dear, purportedly with the aim of furthering their interests or other goals a patently paternalistic implication. But before we justify this claim, we will take a brief foray into definitions of paternalism.

3. What is paternalism?
When faced with charges of paternalism, a common strategy is to adopt a narrow definition of paternalism on which the charges wont stick. 10 We take the opposite tack, adopting a broad motive-based conception of paternalismbroader even than the definitions used by critics of happiness-driven economics (Hausman and Welch 2009). Thus we grant the critics of HDE their standards for paternalism, and then some, one result being that some policies inspired by happiness-driven economics do indeed qualify as paternalist, in certain cases objectionably so. Happiness-driven economics raises legitimate concerns about paternalism. But our motives in
See Hausman and McPherson 1994 pp.93-99 for a summary of the criticisms, and papers in Adler and Posner for proposed fixes to classic CBA (Sunstein Cognition and CBA) or the impossibility of such fixes (Nussbaum, Richardson). Shepley Orr and Schmidtz (A Place for CBA) provide qualified defenses of CBA. 9 That said, we do not share the optimistic view that real-life CBA is necessarily better than the textbook one. That surely depends on the users. [Cite Schmidtz on Canadian dam project counting only monetary costs and benefits] 10 E.g., arguably, Trout 2005.
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construing paternalism broadly are not entirely high-minded: we will argue that minimalism generates paternalistic worries of its own, in ways not always captured by traditional analyses of paternalism. Our conception of paternalism is a modified version of Seana Shiffrins influential analysis (Shiffrin 2000, p. 218). Intuitively, the paternalist seizes some degree of control over an agents own affairs. But she does so, not merely for her own purposes or out of sadism, which is why a bully or an oppressor need not be paternalistic. Rather a paternalist is primarily concerned with managing your affairs with the aim of getting them right. And the wrong of paternalism, when wrong, is that it involves usurping an agents authority to manage her own affairs. Lets make this more precise. According to Shiffrin, paternalism by A toward B may be characterized as behavior (whether through action or through omission) (a) aimed to have (or to avoid) an effect on B or her sphere of legitimate agency (b) that involves the substitution of As judgment or agency for Bs (c) directed at Bs own interests or matters that legitimately lie within Bs control (d) undertaken on the grounds that compared to Bs judgment or agency with respect to those interests or other matters, A regards her judgment or agency to be (or as likely to be), in some respect, superior to Bs. 11 This account of paternalism has some interesting features. First, it does not require restricting or otherwise actively interfering with Bs choices, still less coercion. For example, people sometimes prefer having fewer choices to more, so policies that disregard such preferences to foist more options on those individuals, for their own good, would be paternalistic. Second, paternalism need not be contrary to Bs judgment, as it may instead circumvent Bs agency in carrying out her judgment. You might want to quit smoking but lack the willpower; my hiding your cigarettes doesnt override your judgment yet is paternalist, because Im preventing you from managing your own affairs by circumventing your agency. Suppose a super-advanced technocratic state knows what you judge to be best for yourself and can more reliably bring about those results, so it takes over the management of your life, preventing you from making self-defeating choices and otherwise ensuring you get what you want. 12 This would, of course, be wildly paternalistic. (Yes, most of us have preferences that we bring certain results about on our own, but the paternalism would remain even for someone who cared less for procedures. And there are more limited cases that make the same point: for many of us, our diet is only modestly correlated with our judgments about how we should eat. It is not entirely far-fetched to think that many of us would be better off were someone else, not tempted by those donuts, to decide what we shall eat. Indeed for some of us, just about anyone could choose a better, more satisfying diet for us than what we actually consume. Such a policy could very well promote health and longevity. Yet we take the paternalism of such measures to be manifest, because they circumvent our agency, even if not our judgment.) Thirdly, Shiffrins account does not require paternalism to be aimed at the agents well-being. If a park ranger refuses to let me take a risky climb in the belief that I should not subject my wife to the worry and grief that might ensue, she treats me paternalistically, even though she doesnt do it for my good. And paternalism neednt be concerned with anyones welfare: forcing me to be more virtuous, talented, skilled, well-rounded, beautiful, or otherwise ex11 12

RRR With the exception of this and the diet case, the examples cited here are Shiffrins.

cellent can quite obviously be paternalistic, even if theres no thought of me or anyone else benefiting. We agree with Shiffrin on these points, but propose three modifications to her account. First, it is not clearly necessary, pace (b), that As judgment or agency be substituted for Bs: perhaps A designates a mechanical process, bureaucracy or panel of experts to decide for B. She might even regard her own judgment as worse than Bs. We should say instead that A acts paternalistically by substituting some other entitys judgment or agency for Bs (including, perhaps, her own). The second modification is trickier, but important for our argument. Specifically, condition (d) seems too narrow: A need not regard her (or any other) judgment or agency as superior to Bs. Perhaps A holds a high opinion of Bs judgment, but doesnt bother to find out what B really wants before acting on Bs behalf (indeed, perhaps she does so precisely because her high opinion of B causes her to presume agreement between them): she just assumes that B wants something, and secures it for her. (Of course she wants to vacation on a cruise ship! So I went ahead and booked a trip for us. Whereas B in fact hates cruise ships, and is now burdened with an unwanted journey instead of the holiday shed intended for herself.) In such a case A acts paternalistically toward B, not out of any presumed superiority, but simply out of insensitivity or inattentiveness to Bs attitudes. Call this inattentive paternalism. What such cases have in common with Shiffrins condition (d), we think, is a lack of deference to Bs judgment or agency. Meddling (say), out of either presumed superiority or insensitivity, is paternalistic because in both cases it reflects a failure or unwillingness to defer to Bs judgment or agency in matters over which B has legitimate authority. Accordingly, we propose to replace condition (d) with: (d) manifests a non-deferential attitude to Bs judgment or agency with respect to those interests or matters. A non-deferential attitude in turn involves an unwillingness to defer to Bs judgment or agency, or forgoing reasonable opportunities to defer to Bs judgment or agency. An unwillingness to defer, as we understand it, can include refusing to acknowledge Bs authority to make the ultimate decision, even while granting Bs wish. Third, it is not clear that the present account, with b and d, adequately distinguishes between paternalism and ordinary self-serving bullying or oppression. Condition (c) specifies that the behavior must be directed at Bs interests or affairs, but that is consistent with aiming to harm B. We can amend this to say that the behavior is done for the sake of Bs interests or other affairs: there is an intention to get them right. So we arrive at our final characterization of paternalism (with aforementioned changes to condition (b) as well): Paternalism by A toward B is behavior (whether through action or through omission) (a) aimed to have (or to avoid) an effect on B or her sphere of legitimate agency (b) that involves the substitution of some other entitys judgment or agency for Bs (c) done (or omitted) for the sake of Bs own interests or matters that legitimately lie within Bs control (d) manifests a non-deferential attitude to Bs judgment or agency with respect to those interests or matters.

We think this account captures the intuitive notion of paternalism reasonably well, and highlights what is morally significant about paternalism. Further tweaking may be needed to handle other problem cases, so we consider this definition provisional. But we think it is close enough for the purposes of our argument.

4. Is minimalism paternalistic?
The economist to whom it is no concern whether or not a family loves its farm will almost inevitably aid and abet the destruction of family farming.

Wendell Berry, An Argument for Diversity We take no stand on agricultural policy. But farmers make a useful case for illustrating our points, both because they and other rural people are unusually at risk of suffering the deficiencies of minimalism that we note here, and because the problem has been eloquently voiced by farmers themselves, notably Wendell Berry. Lets start with an example. In Costa Rica some years ago, a hotel developer offered Miguel Sanchez, a subsistence farmer, $600,000 for his land. He refused, later explaining, I have lived in this forest since I was born. I have no desire to live anywhere else. Money can be evil. People will ask me for money, and then they might not wish to pay me back. Where I once had friends, I would have enemies. And the forest, he added, matters more than the money. 13 And thus a poor subsistence farmer, in a poor tropical country, declines the opportunity to become rich. Agree with him or not, these are his values. Consider a different sort of case. People in a community may want a convenient new shopping center nearby. But they may also be strongly committed to individual property rights; they would be appalled to see the government invoke eminent domain to forcibly remove people from their homes, thus clearing the way for a shopping center. They would be more horrified still to learn that this action was taken on their behalf, to satisfy their preferences. Their moral commitments not only cause them to oppose eminent domain for trivial purposes such as this, but to regard their convenience preferences as having no weight at all in deciding whether to seize their neighbors homes. From their perspective, their wish for a new Starbucks offers not the slightest reason even to contemplate tossing people from their homes. In cases like these, values, moral or prudential, silence other preferences, neutralizing them for deliberative purposes. 14 In other cases, values might not completely silence mere preferences, but still cause those preferences to receive far less weight than they ordinarily would, for instance relegating them to second class status, to be considered only after the core moral or prudential questions have been settled. In still othersperhaps the most commonvalues may silence other preferences within a broad range, giving mere preferences a voice only when the stakes for the latter are particularly high. (Eminent domain cases may often be like this perhaps mere consumer preferences only get weighed against property rights when significant interests of a great many come up against the rights of a few, say to build a highway system.) A fourth possibility combines the second and third: partial silencing within a certain range of cases. In any event, such valuescall them value commitmentsare not merely strong preferences; they are strong preferences that serve as constraints on the satisfaction of other preferences. (We call them value commitments because commitments are partly defined by the undertaking of constraints on our future behavior. Not all commitments are value commitments, however: per13 14

From Andre Carothers, Letter from Costa Rica, E Magazine, September 1993. RRR McDowell. We use prudential to denote the sort of value involved in well-being.

haps you are simply, for the sake of enjoying it better, committed to watching every episode of The Sopranos before the year is out.) Note that whether people are reasonable in having such values is beside the point: what matters for our purposes is that people do, or could, have preferences like this. And that much should be plain enough. Indeed, the whole point of positing moral rights, as virtually everyone does, is to place constraints on the satisfaction of peoples preferences. Constraints are central to Kantian and other deontological theories, of which MacIntyre once wrote, For many people who have never heard of philosophy, let alone Kant, morality is roughly what Kant said it was, and theres good empirical data to back this up. 15 And while rights tend not to play any fundamental role in consequentialist ethics, we cannot think of any living consequentialist philosopher who denies a role for rights, or related constraints, in actual deliberative practice. (No one thinks judges ought to decide cases solely in terms of utility maximization.) Commonsense morality, and philosophical ethics as well, are steeped in constraints. Constraints also arise in peoples conceptions of well-being. Those holding Aristotelian or Stoic views of well-being, for instance, may regard virtue or excellence as incomparably greater in importance for their lives than other goods, such as comfort. They may be unwilling to trade any amount of excellence for any amount of gain in comfort, or be unwilling to do so below some threshold of excellence, or above some threshold of comfort. Indeed, probably most people have prudential values like this, holding commitments they see as central to their identities, integrity, and well-being. To compromise those values would be to compromise their own welfare. Many farmers for instance are, like Miguel Sanchez, committed to various values such as not robbing the land, taking good care of their animals, and for that matter leading the life of a farmer. 16 They may also cherish the freedom of self-employment, having to answer to no one. These are, for them, a matter of integrity and essential for their well-being. They may be unwilling even to contemplate trading off these values against mere preferences, say for extra money or consumer goods, or would do so only in limited circumstances. Their value commitments serve as constraints on the fulfillment of other, ordinary preferences in the pursuit of personal well-being. Some such values (treat my livestock well) may also be moral values, but others (be a farmer) may be wholly prudential: they might matter to the person simply as aspects of personal well-being, or as elements of a meaningful life. (In fact it is plausible that moral values normally play a role in defining personal well-being: we do not see our lives as going well for us unless we also do well enough by our moral commitments.) For convenience, well use value commitmentssometimes just commitmentsto refer to values, moral, prudential or otherwise, that generate constraints on the pursuit of other values. Some values may not be like this: I might value pleasure, say, but not see this as a commitment, or as generating constraints. I might see it as eminently fungible, tradable for other goods, at least within limits. Yet even values like this need to be distinguished from mere or brute preferences: to value something, and not merely prefer it, is to see it as generating reasons for youas tending to justify responding in certain ways to it, and limiting how you might reasonably respond to it. Perhaps you want a flat screen TV. You may think you have reason to want it, not because it has intrinsic value, not even simply because you want it; you might see the TV as having purely instrumental value, and your wanting something as, in itself, providing no reason at all to seek it (you also, regrettably, want a cigarette). Rather, you think it makes sense to want it because you will enjoy watching it, and the resulting pleasure seems to you valuable.
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RRR: MacIntyre, 190. Baron, Tetlock, Cushman, Greene RRR: on robbing the land, see Berry...

You value pleasure, but merely want a TV; and the difference plays out in the fact that you see pleasure, but not the TV itself, or your wanting one, as grounding your reasons to act. And what matters to you in this case, ultimately, is getting pleasure; the TV is merely a vehicle for promoting that value. Should the TV somehow fail to provide enjoyment, then your having gotten the TV that you (merely) wanted would not, from your perspective, have any value at all. It did not make you better off. And so we have (at least) a 3-tiered hierarchy of preferences: value commitments, which constrain the pursuit of other values; mere values, which (along with value commitments) lend our preferences whatever normative force they seem to us to have; and mere preferences, which in themselves may have no normative force for us at all. The point is not that brute preferences cant seem to us to generate reasons all by themselves; some people may think the mere fact of wanting something gives them reason to seek it. But such people appear to value getting what they want, as such. The conceptual difference between values and brute preferences remains. In itself this preference structure might pose no problems for CBA, since (setting aside irrationality and other mistakes) it will presumably inform peoples preference orderings. Deep trouble arises, however, when we try to evaluate actual policy options, for the hierarchy of preferences makes it very hard to impute preferences to people. MCBA in particular has to make do with an austere diet of observed choices, considering only the overt behavior involved and not the reasoning behind it. Values collapse into mere preferences, and constraints vanish from the scene altogether. Returning to the farmer case, MCBA treats farmers values as mere preferences, imputing monetary equivalents for each of them, say by looking at how much money is needed to get farmers to quit the land and give up farming. Suppose there is some amount of money for which farmers in a region have been observed to be willing to sell off their land. It may seem we can infer that they value their property to that extent, but the appearance may be misleading. Perhapsindeed, this may be the standard casethey accept the trade purely to protect other cherished values; for example, you sell your land during hard times to save your family from ruin. They may not generally be willing to make such tradeoffs at all; a secure farmer, like Sanchez, might not accept any amount of money to sell his land, because mere commodities (mere wants) arent comparable at all to his core values, which serve to constrain the pursuit of commodities. And so, when a Sanchez does sell his land, it could be for a songwhatever it takes to protect his other cherished values. In some cases, policies not only undermine peoples value commitments; they press individuals to violate those commitments themselves, as when farmers are given little choice but to abuse their animals or their land, lest even direr consequences befall them and their families. Here a well-meaning policy, thought to benefit farmers, might instead press them to violate their own integrityone of the more profound disutilities you can inflict on a person. Similarly, that some impoverished Indian parents are willing to sell their children into slavery for $12 doesnt mean they dont view their offspring as priceless; perhaps the amount is just enough to keep their other children from starving. Market prices and WTP/WTA assessments in these sorts of Sophies Choice cases yield approximately zero information about peoples preferences. This is probably not fantastical case-mongering: governments have not infrequently undertaken policies that drive farmers from their landfishermen from their boats, etc.to join the wage economy. Starting in the 1980s, for instance, Mexico allegedly set out to do precisely this to millions of farmers, who have since left their land behind. 17 Their subsequent earnings
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RRR.

may often exceed the amounts for which they wereunder duresswilling to sell their property, creating the illusion of a benefit where, quite possibly, many see the move as a life-shattering disaster that no amount of money can compensate. 18 In such cases, policies are imposed on people, for their sake, that they would have judged abhorrent had anyone bothered to ask. Even when officials correctly discern that those individuals are losing out, the policy may still fail grossly to take seriously the depth of their opposition. We regret your loss, but assure you that we gave your concerns full considerationwhen in fact the only concerns they registered were the prices some people had been observed to accept in extremis, which are indicative of basically nothing except that there may be even worse fates than accepting such a bargain. To treat people in this manner is, we contend, paternalistic. The same problem arises in a different way in the eminent domain case, where purely moral values are at stake. Here, MCBA gives the preferences for the shopping center full weight. Yet most of the policys supposed beneficiaries might vehemently object to having their convenience preferences counted as a reason for evicting their neighbors from their homes. As a result, it is entirely possible that most citizens, including those who supposedly benefit from the resulting policy, would reject the measure. This would not be a particularly democratic procedure. In any event, peoples preferences are being used, on their behalf, in ways they strenuously oppose. And so their judgments about how to promote their own interests end up being overridden by policymakers. It is rather like a gangster who fulfills his wifes wish for a diamond ring by killing a bystander, over her protests, and handing the victims ring to his disgusted companion, congratulating himself on his generosity. This sort of treatment is, we submit, paternalism. (Two further points merit attention at this juncture. First, constraints make trouble, not just for MCBA, but for any consequentialist decision procedure that treats the utility function as continuous, and more generally fails to recognize the way that some preferences serve as constraints on the satisfaction of other preferences. An additional difficulty is that people tend sharply to distinguish doing from allowing, drawing a bright line between a persons responsibility not to harm others versus her responsibility not to allow someone else to cause the harm. You might strenuously object to your towns decision to eject Granny from her home to build the Starbucks you desire, but not be willing to pay very much to stop them from doing it: its not really your responsibility. Indeed, you might take offense just at being asked, how much are you willing to pay to keep us from ruining Grannys life?) It may be objected that these cases, however morally problematic, do not amount to paternalism, since policymakers have no intention of overriding peoples preferences. They might firmly believe theyre carrying out peoples wishes. Given their notorious aversion to paternalism, it is safe to say that minimalist economists would generally fit this description: the whole point of the enterprise is to be antipaternalistic, letting people be the authorities on whats good for them and how to lead their lives. Consumer sovereignty is the name of the game, and calling such economists paternalists can sound like calling the Pope an atheist. We agree, and indeed are at pains to emphasize, that minimalists explicit intentions are non-paternalistic. The problem is what they leave out: having accepted a oversimplified model of human preference, minimalists fail seriously to consider how people actually think about their lives. Put more concretely, a policymaker who settles on policies with deeply disruptive consequences for peoples lives, or which conflict with peoples deeply held values, and does so while seeking no more information about
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Note the minimalist cannot reply that in the two cases we describe people are not really getting what they want, for minimalist CBA does not engage in conversations, nor takes votes; instead it imputes values to people based on market behavior, and extrapolates the strength of their preferences from that.

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peoples attitudes than MCBA can provide, is almost certainly forgoing reasonable opportunities to see what the interested parties think about the matter. This is what we called inattentive paternalism: paternalism through being insufficiently attentive to peoples attitudes concerning their own affairs. And the structure of the mistake is like the well-meaning but insensitive friend: Of course theyre better off! Theyre making more money than ever before, and got more than market value for their land. Our cases thus involve paternalism. Indeed, multiple forms of it: take the farmer case again, but imagine as well that the policy is meant to benefit, not just the farmers, but consumers who will enjoy lower prices. In this situation we may have threefold paternalism: first, the committed farmers forced off their land, whose prudential values are discounted; second, the farmers who gladly quit their land, but who benefit only coincidentally from the policytheir values are still ignored or discounted; third, the consumers whose moral values would decisively rule out treating farmers that waythey would much rather deal with higher prices than have farmers forced off their ancestral lands. (This last is just a variant of the eminent domain case.) In each case, the policy aims to benefit people without taking their view of the matter seriously. Note, pace the second case, that even giving people what they want can be paternalistic, if it is done without serious regard to what they think. A popular and benevolent monarch, who takes himself not to be bound by the peoples will, treats his subjects paternalistically even if they get everything they want. A fairly significant corollary of this point, which we will not pursue in any detail here, is that those consequentialist ethical theories that do not give appropriate weight to peoples value commitments will qualify as paternalistic. A classical utilitarian government, even if it endorses liberal constraints on happiness promotion, does so not out of deference to individual agents their priorities are ultimately beside the pointbut purely because that is an efficient means of advancing the sum of happiness in the world. Like the benevolent monarch, the utilitarian government is not bound by its subjects wills, and it will unhesitatingly ride roughshod over those should the utility forecasts ever changeif, say, a Brave New World becomes feasible. Arguably, it treats its subjects like children even when giving them what they want. Indeed, this sort of paternalism is eminently familiarparents regularly indulge their children without even the pretense of handing over authority to them. The kids get what they want, but the decision is not ultimately up to them. For a more direct example, consider the town of Celebration, Florida, which originally was governed not by elected officials but by managers appointed the by towns creator, the Walt Disney Company. Said one resident of the towns government, It is definitely a democracy, because we can go to town hall and express our feelings. Its a very responsive government. Another: Democracy is being listened to, so Id say its clearly a democracy. And another: Everyones input is welcome. Disneys doing an excellent job of staying in the background. Behind the scenes theyre doing a lot, and while they have to control things, I think they really want to step back. Authority lies wholly with the corporation, but its a benevolent autocracy that listens to their wishes. People get what they want, and are largely left alone. But this strange form of democracy is, manifestly, a paternalistic regime. Notice that MCBA-based policy threatens paternalism not just for farmers and fishers, butat leastfor those subject to any policy with highly disruptive effects on peoples lives: unemployment policy, climate change policy, major public works like dams, etc. 19 The Three
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Climate change policy poses exceptionally grave risks of paternalism, since the moral and prudential value commitments of essentially all human beings, for centuries to come, may be at stake. Simply to weigh GDP impacts of policy options, as some commentators do [Manzi?], likely means ignoring almost all of the costs that people real-

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Gorges Dam in China, for instance, has already displaced well over a million people, with millions more expected over the next decade. 20 In Brazil, the massive Belo Monte dam is underway, possibly threatening thousands of indigenous people, some living largely outside the cash economy; yet officials reassure us that project is designed so that the local population [will] have a superior quality of life...at the end of the construction. 21 Perhaps, but by what metric? Evidently, some of those fearing the elimination of their entire culture have a different view of the matter: I do not accept the Belo Monte dam, one leader says. The forest is our butcher. The river, with its fish, is our market. This is how we survive. 22 Were their opinions consulted? How about those of other Brazilians who stand to gain from the dam, but would refuse to do so in light of its environmental and human costs? Not if MCBA was the measure of cost and benefit. But one can imagine how government officials keen to build dams over peoples homesteads might find MCBA, or methods still more austere, awfully appealing. When those whose lives would most be disrupted by a policy do not form a powerful constituencywhich is to say, usually officials are liable to find great comfort in believing that the prestige of economics backs their wish largely to ignore those voices. Sorry, but all we can go on is what people have revealed to us through their choices. Peoples opinions regarding the policies that affect them have no place in rigorous policy analysis. It is difficult to imagine a more urgent demand on policymakers deciding on public works than that the magnitude of such costs to the affected individuals be responsibly accounted for. Because such policies have such profound impacts on peoples lives, they will invariably infringe on individuals value commitments. Even where the policies would gain peoples assent, MCBAs deafness to their views means that MCBA-driven policies of this sort are always, as a matter of fact, paternalistic. We have here not the mere possibility of paternalism, but, plausibly, a pervasive actuality. The objection to inattentive paternalism is not that minimalists are insensitive. By now economists are quite used to that charge, fair or not, and at any rate good policymakers are sometimes not very sensitive people. The objection, rather, is that minimalist policymakers are paternalists: their methodology licenses substantially ignoring what people want for themselves when making decisions for them. Moreover, the paternalism involved is hard paternalism: though no overt coercion or even limitation of freedom need be involved, this sort of paternalism does not, like soft paternalism, help people achieve what they value. Rather, it substitutes different aims for them altogether. While the permissibility of soft paternalism is a matter of dispute, hard paternalism is deeply unpopular among liberals, and most certainly economists. Indeed, the rejection of hard paternalism may be a defining feature of liberalism. That the unwitting endorsement of hard paternalism, possibly on a massive scale, should be a prominent feature of mainstream economic thought is no small irony. After all, a commitment to promoting freedom, including sharp restraints on paternalism, arguably forms the moral core of mainstream economics. A large swath of contemporary economics is, then, profoundly morally incoherent.
ly care about. This is not only grotesquely immoral, but wildly paternalistic. Never mind your wish that your grandchildren not wind up refugees in a biologically impoverished world. Theyll still be richer than you. Intelligent minimalists, of course, will want to count nonmonetary costs too, but plainly their instruments arent remotely up to the job. 20 RRR. 21 RRR 22 RRR

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5. On the distinction between values and preferences


We are by no means the first to observe that the difference between values and mere preferences makes trouble for economics. A number of philosophers have drawn a distinction between values and preferences (Sagoff, Anderson 1993, Sen 1977), where the former are attitudes taken from a different perspective than the latter. For instance, preferences are attitudes we hold as consumers and they reflect our desires, considered or otherwise. Whereas values are commitments we hold as citizens. Even if some of our choices can be said to reveal preferences for cheaper goods, bigger cars, more development, etc., this does not mean that we do not also have strong commitment to work place safety and the environment (Sagoff Values and Prefs 311).23 These commitments are such that, at least in some circumstances, they prevent us from placing a cash value on certain goods, as protest votes in CBA surveys indicate. For example, loving pet owners do not even consider the opportunity costs of selling their pets for experiments, or eating them, because thats the nature of their affection (Anderson 1993, 208). Their love does not simply outweigh other considerations, but silences them. This distinction between values and preferences has been used to criticize CBA for its inability to recognize and respect two very different forms of valuation. It is this inability that motivates Andersons claim that the norms of consumers sovereignty amount to a tyranny over citizens when applied to the domain of public policy (ibid 210). Though Anderson does not frame her objection in terms of paternalism, the worry resembles those raised here. Some have attacked the distinction between values and preferences are insufficiently sharp and unmotivated. Exactly what marks values from preferences? Our argument need not assume a hard or deep distinction. We might, for instance, simply distinguish different levels of preferences, for example higher- and lower-order (see Sen 1977 Rational Fools for proposal for a meta-ranking of preferences). 24 In fact the basic problem of paternalism arises even if we treat all preferences as brute preferences, for the well-known reason that, on any remotely plausible notion of preference, choices radically underdetermine preferences: only a small fraction of our preferences are actually revealed through choice, so inferring preferences from choice behavior will always be risky. When oft-traded standard-issue market goods are at stake, the risks are typically minimal: your shopping behavior may well give pretty reliable evidence about your preferences for apples. But when talking about Very Strong Preferences, to say nothing of values, things are different, particularly if those preferences are rarely tested in the crucible of the market, and even then only under duress. Perhaps Sanchezs neighbors sold their lands for a paltry sum; but from that fact we can infer almost nothing about their preference orderings, beyond the bare fact that something made the deal worthwhile to them at that time. Maybe they would normally refuse any amount of money, like Sanchez, but the baby needed an operation. To assign market valuations based on observed choices in cases like these, where there is good reason for suspicion about those prices, would be to fail to take seriously those individuals preferences. It would be paternalistic, at least if there is some better way to take account of their preferences. We dont need to posit values at all to make that point.
RRR: Sagoff claims paternalism in At the Shrine of Our Lady of Fatima Silencing could perhaps be understood using James Griffins idea of trumping. Take two conflicting values, A and B, A trumps B if any amount of A, no matter how small, is more valuable than any amount of B, no matter how large (Griffin 1986, 83). Alternatively silencing could arise only in some contexts, in which case we would have the case of discontinuity. A and B are discontinuous if so long as we have enough of B any amount of A outranks any further amount of B; or that enough of A outranks any amount of B (Griffin 1986, 85).
24 23

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That said, we think it important to acknowledge the existence of values beyond brute preferences. Even if our best normative theory did not ultimately require any preference/value distinction, and even if any such distinction were obscure, the fact remains that people do make distinctions of that sort. You might think value commitments, protected values or sacred values that sharply constrain the satisfaction of ordinary preferences obscure and unfounded, and for that reason leave them out of your normative theory. But mountains of evidence attest that people do have such values, for better or worse, and are very strongly committed to honoring them. However benighted such folk might be, it is paternalistic to disregard the structure of their preferencesviz., their valueswhen setting policies on their behalf. And so the minimalist faces a dilemma: either acknowledge the structure of peoples values and admit to being unable to make a recommendation about which policies will better satisfy peoples preferences, or else make a recommendation that runs roughshod over peoples values. Silence, or paternalism. Minimalists might be tempted to grasp the first horn of the dilemma, disavowing any interest in making policy recommendations: we simply provide information, not recommendations. This sort of claim often seems disingenuous, as economists have not historically been particularly reticent when it comes to making recommendations. In general, it is not realistic to expect people whose vocation consists of operating powerful tools for policy analysis to restrain themselves from making policy recommendations based on those instruments. For the fellow who sells turnips, turnips are bound to seem like terrific foodstuffs for every occasion. Be that as it may, the problems raised here do not indicate that MCBA is incomplete, needing supplements from other kinds of information; they tell us that MCBA gets the wrong answers about what people want and hence about the welfare or utility impacts of policy options. It gets wrong precisely the sort of information welfare economics is supposed, by its own lights, to be about. Would that the deliverances of MCBA were merely incomplete; on the contrary, its bad information. In cases of paternalism, it tells us people are getting what they want, or are bearing only modest costs, when in fact the policy might be an unmitigated catastrophe from their perspective. In such cases MCBA is far worse than useless, and policymakers may well be better advised to rely on gut instincts and hunchessay, a nagging sense that there might be something wrong with ruining peoples lives for the uncertain prospect of a marginal public gain. If nothing else, their decisions would not then bear the intimidating imprimatur of science. We want to emphasize that none of this invalidates CBA. MCBA is but one form of CBA, albeit an important one, and even MCBA may still be used appropriately in contexts where these are not serious concerns. In general, CBA can be an essential tool for responsible policymaking. 25 Where CBA fails to incorporate all the relevant normative concerns, it may still be used as part of the decision-making procedure that can be corrected by those considerations that CBA does not incorporate (Adler and Posner, Sunstein). Indeed some have argued that the use of CBA need not assume value commensurability (Sunstein). We are on board with these suggestions. All we want to maintain here is that policies taking MCBA as the arbiter of cost and benefitthat is, policies grounded in mindless economicscan easily be paternalistic, failing to take seriously the priorities of their supposed beneficiaries.

25

RRR: Schmidtz

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6. Avoiding paternalism
leaving aside the issue of whether or not murder would be acceptable as an economic means if the stakes were high enough, it is a fact that the destruction of life is a part of the daily business of economic competition as now practiced. If one person is willing to take anothers property or to accept anothers ruin as a normal result of economic enterprise, then he is willing to destroy that other persons life as it is and as it desires to be. That this persons biological existence has been spared seems merely incidental; it was spared because it was not worth anything. That this person is now free to seek retraining and get into another line of work signifies only that his life as it was has been destroyed.

Wendell Berry, Economy and Pleasure The question is how we can do better. What would non-paternalistic policymaking look like? An obvious first step, just noted, would be to abandon MCBA for more mindful forms of CBA that go beyond choice behavior in teasing out peoples preferences, for instance asking them about their wishes, as in contingent valuation surveys. As well, we can take seriously the differences among brute preferences and values (higher order preferences, or whatever one wants to call them); what exactly that would entail is unclear, since part of the problem is incommensurabilitywe cant place all preferences on the same scale. At the very least, analyses might be able to flag instances where peoples value commitments may be compromised, leaving it to human judgment to decide how to weigh them. The first step is to admit that your policy has a problem. 26 When the local city council contemplates using eminent domain to turn peoples homes into a shopping center, CBA will have a place, for instance telling them whether the action has more costs than benefits even from a narrow market perspective. But citizens will also want to know why some people wont sell: is the price just too low? Are they holding out for a bigger settlement? Or are these cherished homesteads whose elderly residents can imagine no other satisfactory place to live? If the latter, then the costs of the policy to those individuals may be far higher than any market indicators could tell us. Those costs need to be noted, even if we cannot quantify them in any precise way. And how would the alleged beneficiaries of the proposal feel about having some lives ruined so they and some others can enjoy a few new retail outlets? The obvious solution, where possible, is to ask them. We might find that their convenience preferences vanish without a trace when elicited in this context. Sometimes it is not feasible to ask, and at any rate such methods have their own troubles: talk is cheapa major motivator of mindless economicsand the preferences people express in surveys are not always reliable. Preferences are often unstable, subject to framing effects and other cognitive biases, and frequently constructed on the spot; what we want in cold contexts differs from what we want in hot contexts; anticipation often departs from fruitiongetting what we want can leave us cold; and expressed preferences often reflect what people think they should want, rather than what they really, at bottom, do want. How many happy paraplegics would have said, in advance of the injury, that they would rather die than live in a wheelchair? Fortunately those preferences were not honored.

Indeed, not to do so can itself be paternalistic: if you are advising officials as an expert on the welfare impacts of their policy options, and do not convey to them what you know to be grave limitations to your analysise.g., that it omits the most important coststhen you are not really letting them make their own decision in the matter, instead imposing your defective analysis on your hapless advisees. This seems paternalistic.

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Here we think happiness research can be among the means for policymakers to avoid paternalism: it can give us information about outcomes that people are independently known to value very highly. You dont need to ask your constituents, every time you decide a policy question, whether they want to be happy. You can take that one pretty much for granted, and indeed put a pretty heavy weight on it: when your decisions undermine the happiness of your constituents, you have a pretty good start on knowing that you did something wrong. If it is true, for instance, that economic growth often yields poor happiness dividends, and that economic growth is valued substantially as a means to happiness, this could be evidence that some growth-oriented policies stand in conflict with peoples priorities: people might prefer policies that advance happiness (such as unemployment reduction) to those that promote growth but not happiness. Knowingly to promote pecuniary goals for the public over goods that citizens are known to care more about is, surely, paternalistic. In short, when asking people directly for their opinions on the measure youre proposing isnt practicalas is the case for most policiesthen considering information about its likely impact on things they care very much about, like happiness, may be essential to taking their priorities seriously and treating them with respect. Not to use (reliable) happiness research in policy is, in some cases, paternalistic. 27 This may seem a peculiar thing to say, since happiness research is very often the target of complaints about paternalism (Mitchell 2005, Glaeser 2003, White 2010, Barotta, Hausman and Welch). In some cases, they have a point. To sort this out, lets distinguish a few forms of happiness-driven economics (HDE), where this expression serves as an umbrella term for a number of different proposals, which share in common the idea that happiness should be one of the goals of policy-making. Its advocates argue that economic policies at the national, local and individual levels should be evaluated not only in terms of the more familiar goals such as income, productivity, preference satisfaction, justice, etc. but also on whether or not these policies translate into greater happiness or at least do not increase unhappiness. In thinking about paternalism, we can usefully distinguish three basic varieties of HDE. First, Benthamites argue that the promotion, if not maximization, of mental states such as happiness or subjective well-being should be the sole aim and normative criterion of policy. Normative economics in turn should center on such mental states rather than preference satisfaction. This classical utilitarian position is advocated most visibly by Richard Layard and Daniel Kahneman and his colleagues (Layard 2005, Kahneman et al 2004). We understand the Benthamite position somewhat broadly, to allow for the promotion of nonhedonic mental states like life satisfaction, which is presumably thought important, not hedonically, but because of its connection with what individuals care about. (Grumpy philosophers might be low in hedonic balance yet satisfied with their lives because they care less about pleasure than about achievement and the like. 28) Since Benthamites in this sense need not be hedonists, one might prefer a different term like neo-Benthamite, but well stick with the traditional language here.
In general we have set aside issues about the reliability of happiness research; while significant, we dont think them fatal to HDE (RRR: Haybron). Our concern is with the in-principle objections to using it. 28 Because it ostensibly tracks the individuals priorities, promoting life satisfaction may seem to avoid worries about paternalism. It does not, for three reasons. First, a benevolent despot might promote life satisfaction while bypassing individuals agency, managing their lives for them. This would be paternalistic even if those people were satisfied with the arrangement. Second, life satisfaction is a global metric that is both coarse-grained and obscures tradeoffs among peoples values; a policy you oppose might yet, for other reasons, leave you more satisfied with your life. Third, there is no reason to expect life satisfaction to reliably track the progress of individuals priorities, for reasons detailed in Haybron (RRR: 2008). People might be satisfied, not because theyve gotten most of what they care about, but simply because theyve lowered the bar for a good enough life. Indeed, life satisfaction could
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Insofar as HDE is Benthamite, then paternalism is indeed a serious concern: Benthamite utilitarianism notoriously offers no fundamental protections against paternalistic interference, restraining the state only insofar as restraint is thought to maximize happiness. In principle, governments could be enjoined to bring about a Brave New World, though of course utilitarians regard such extreme cases as practically irrelevant in the real world. (In this connection we urge the reader to contemplate the illiberal but quite possibly happiness-promoting policies of Bhutan, and suspect that still more illiberal, and yet still more effective, regimes could soon be devised. 29 In the case of diet, it would be surprising, as noted earlier, if clever technocrats couldnt find happiness-promoting ways to make us eat better.) We would go further and suggest that classical utilitarianism is inherently paternalistic, through and through, for reasons noted earlier: the fact that you want to be left alone is completely irrelevant to the utilitarian calculus, which is entirely indifferent to your wish and will. If you are allowed to do what you want, get what you want, or have any say at all in how you are to lead your life, this is mere coincidence, an indulgence granted by the utilitarian despot on the grounds that you happen to live in a beneficent world where the sum of utilities is best served by permitting you to choose. You are, in this scheme, merely the steward of your life, not the sovereign master. 30 That you are given a long leash does not make you any less bound. We dont expect many utilitarians, who learn young to bite any number of bullets as required, to be impressed by this argument. The main point is to concede that at least one form of HDE may be every bit as paternalistic as its fiercest critics allege. Maybe more so. At the opposite end of the spectrum stand what well call the happiness-aware traditionalists (HATs), who dont think that happiness or well-being should be the sole or perhaps even a central concern of policymaking, but nevertheless treat it as an important concern. Normative economics likewise needs to trade in such notions, but without major revision to the standard framework, which might still be seen as fundamentally concerned with preference satisfaction. Arguably, most advocates of HDE and happiness policy are closer to this end of the spectrum than to the Benthamite view, and a perusal of their policy recommendations raises few red flags about paternalismwith one major family of exceptions to be noted momentarily. 31 HAT illustrates just how modest HDE can be. A particularly weak form would claim only that information about happiness or well-being sometimes merits consideration when evaluatwell increase while people see their lives getting worse, as can happen (say) when a person gets cancer and decides to count her blessings more. You could promote life satisfaction simply by getting people to lower their standards, even as their priorities remain the same. Displaced farmers, say, may cope by satisfying themselves with at least keeping their families intact, though their lives have been shattered. This is a variant of the adaptive preferences worry explored by Elster, Sen, and others, except that the adaptation involves not preferences but what level of preference satisfaction counts as good, or good enough. 29 While some of Bhutans policiese.g., a legally enforced dress codeare pretty clearly illiberal, some of those policies, such as a ban on television, have recently been discontinued. That granted, there may also be much to admire in Bhutans efforts at happiness promotion. 30 This is a slight exaggeration: a steward would have a special responsibility for her life, whereas the utilitarian scheme has no fundamental place for such responsibilities. As many have observed, your life is specially your concern only to the extent that you are best placed to advance your own utilities rather than someone elses. That its your life is, in itself, irrelevant. 31 RRR: Diener, Helliwell et al., Bok, Loewenstein and Ubel, Dolan, Stiglitz, Frey, Diener and Seligman Trouts work is not clearly Benthamite, but it advocates a relatively aggressive approach to HDE that raises more significant concerns about paternalism than the HATs. Trout defends his view against paternalism charges by arguing that his approach merely helps people to achieve their values. We think this takes too narrow a view of what paternalism is: it matters how you get what you want.

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ing policies, allowing that stringent moral principles protecting liberty might sharply limit what governments can do to promote such values. No controversial stand need be taken on the right theory of well-being, and indeed we might restrict our concern entirely to such inoffensive goals as the reduction of suffering. In fact we need not make the promotion of happiness, or even the mitigation of unhappiness, a goal of policy that new policies might be developed to pursue, taking happiness merely to be a consideration to be weighed when assessing policies initiated for other reasons. By this point, the happiness police are nowhere in sight, and it is hard to see what must be paternalistic about this sort of policy. Heres an example. Unemployment has notoriously deleterious effects on happiness, and policymakers might reasonably choose to forgo some degree of economic growth to reduce unemployment rates, simply on the grounds that the latter has so much more impact on peoples happiness, and indeed produces so much misery. So long as this action derives from a judicious assessment of citizens prioritiesviz., a reasonable judgment that peoples values support this ordering of prioritiesthere seems little reason to worry about paternalism here. In fact it is likely less paternalistic than a minimalist approach that favors growth. For even the beneficiaries of growth might object to the policy. Suppose you were to present citizens with a choice: we can give you and most others a one percent rise in income, but only at the cost of swelling the ranks of the unemployed by one million. We humbly conjecture that the majority of people, at least in the United States, would reject such an offer, and might indeed consider it repugnant. They would gladly pass up a bit of extra money so that others dont have to suffer the awful indignities of joblessness. By giving due weight to peoples abiding concern for happinessothers and their ownpolicymakers avoid what would otherwise have been a paternalistic mistake. In short, simply counting information about happiness as a significant consideration when evaluating policies, which is all that weak forms of HDE require, need not be paternalistic, and may be an indispensible means to avoiding it. But a third variety of HDE is, for the most part, self-consciously paternalistic; we will call its proponents choice architects. According to choice architects, policymakers should sometimes attempt to influence, by nonrational means, peoples choices to correct for common mistakes. Thus we have proposals such as libertarian paternalism, light paternalism, and asymmetric paternalism, which urge policy-makers to act as choice architects aiming at promoting well-being only in those domains and circumstances where the minimalist focus on revealed preference leads to counterintuitive results (Sunstein and Thaler, Camerer et al, Loewenstein et al). When, and only when, people clearly fall victims of their own cognitive biases can policy-makers intervene and nudge us towards making choices that better serve our well-beingwhere well-being is understood as uncontroversially and inclusively as possibleor at least our own ends. (Choice architects can of course be more aggressive than this, but most advocates press this relatively conservative line.) Everybody agrees that we would be better off if, at very little cost to our present well-being, we saved more for retirement or ate more healthily or drove a little slower. The nudges that push us toward behaving more prudently still leave us plenty of room to make irrational choices should we insist on them. Choice architecture is plainly paternalistic, though in these cases soft paternalism (that is, roughly, it plausibly helps people to get what they want). 32 Is this a problem? It is certainly cause

Light paternalism can be hard paternalism if the goals advanced arent taken to be the agents own. Sunstein and Thaler claim that paternalism cant be avoided, since policies will shape peoples choices no matter what we do (RRR). While weve taken a pretty expansive view of paternalism, this stretches the notion beyond plausible bounds: the cafeteria manager who arranges items at random may be influencing choice, but is certainly not taking

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for concern, and reason for caution, as it is for any kind of paternalism. As with soft paternalism generally, it is not easy to formulate rules for the acceptable use of nudges, and we will not try to do so here. To some extent it is a question of costs and benefits; most people endorse even strongly paternalistic programs like social security because the stakes are so high, and the benefits so far in excess of the costs. Once weve accepted that kind of policy, it is hard to see the objection to nudging people into far more adequate retirement savings by changing the default options on their employment forms. But it will likely be important that interventions tend to be transparent, so that people know their choices are being shaped, to use Hausman and Welchs term. At some point, agential prosthetics that benignly help people to make the choices they really want to make can lapse into rank manipulation, ceasing to treat people with respect. Whatever that point is, we can at least conclude that choice architecture need not be objectionably paternalistic, and can be less problematically paternalistic than MCBA. Lingering doubts about the antipaternalist credentials of even modest forms of HDE may remain. Mark D. White, for instance, argues that HDE betrays a profound lack of respect of the dignity and autonomy of persons by refusing to acknowledge their ability to determine their own true interests, which are unknowable to policymakers unless revealed through choice or consenttwo ways in which dignity can be respected (White 2010). We have already shown the limitations of choice or consent behavior, and how indeed limiting ourselves to such information sometimes commits us to paternalism. But Whites point raises a natural question, namely why need policymakers concern themselves with happiness at all? Why not take their preferences on board and leave questions of happiness for them to deal with? In reply, as we noted earlier, policymakers may not always have direct access to peoples preferences, so direct consideration of goods that people are known to value, happiness included, will sometimes be required. In other cases, seeking out preference information would be pointless, because we will already know enough to act. Nobody complains about governments tracking rates of malaria and doing something to reduce them without so much as a glance at revealed preference data or opinion surveys, because its a pretty safe bet people would rather avoid the disease, and the policies can be cheap. This is hardly an assault on human dignity. Happiness policy can sometimes be like that. This might be doubted, however, since combating infectious diseases often requires collective effort, while happiness is a product of individual choice. But this last claim is simply false, and reveals one of at least two reasons why we should not want governments to leave us entirely to our own devices in matters of happiness. Happiness depends on individual choice, yes, but it also depends heavily on factors that individuals cannot easily control on their own. Healthy communities, short commutes, and accessible parks can contribute to happiness, for instance, but such things require collective effort to secure. Unemployment is devastating, but individuals can only do so much to avoid it; policy instruments are vital. Second, people make mistakes, lots of them, often quite predictable mistakes. This screamingly obvious point is so thoroughly documented in the literatures on irrationality, affective forecasting errors, and other cognitive biases that we need hardly dwell on it here. 33 (But lets add as well the obvious point that governments, like everyone else, actually know quite a bit about peoples interests. People need companionship, interesting work, not to have malaria) Such mistakes have provided much of the impetus for HDE, not to mention social security programs. (It is worth remarking that one of
over the management of her clients lives, to any degree, from them. They dont figure in her decision at all, so she cant be treating them paternalistically. 33 See Haybron RRR.

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the top budget items, if not the largest slice of the budget, in many countries is a retirement program intended primarily to protect people from their own mistakes.) Even when choices embody no error taken individually, the pattern of choices in a persons life is extremely difficult to manage, and can easily fail to yield the hoped-for results. 34 These two factors alone can drive a fairly substantial wedge between the happiness people desire and the size of the choice set available to them. There is nothing paternalistic about, in light of that fact, taking direct account of happiness impacts, lest (say) your urban planning policies end up kicking the legs out from under one of peoples chief sources of happiness, their connections with other people. Indeed, refusing to do so will sometimes be paternalistic. Or, to take another example: suppose your agricultural policy, which would subsidize sweets and fats, will have the effect, given peoples weakness for sweets and fats, of causing rates of obesity and diabetes to skyrocket, in turn undermining at least two major values for most people, health and happiness. Observing choice behavior alone, you can infer that people have some preference not to die, not to have diabetes, and so forth. But you cannot conclude that they are, by their own lights, making huge mistakes, and ruining their health, no thanks to your policies. To find that out youd have to look inside their heads, or more sensibly ask them. Or really, you probably dont even have to ask: it is one of the relatively fixed points of human nature that people prefer not to expire prematurely, preceded by years of some decidedly unpleasant diseases, and that this preference far outweighs whatever marginal utility they might have derived from eating thousands of Krispy Kremes instead of, say, a typical 1960s middle class American diet. Lets treat these individuals with respect: lets leave them free to make their mistakes; but lets also take seriously what they think of their diet, and when they tell us its essentially a drawn-out suicide that theyd desperately like to prevent, listen to them. As opposed to completely disregarding their own view of their lives, as the minimalist does, and assuming that the choices which they so strenuously disavow reveal their true priorities. People do make mistakes, as they see things, and treating them with respectand not paternalisticallymeans both letting them make those mistakes and not taking those errors to embody their true priorities, instead attending to what they think about them. And when we know that people might unwittingly be undermining one of their chief values, like happiness, it is not impertinent to attend directly to that value. Is this policy, which people support because they think it will make them happier, actually having that effect? To refuse even to entertain such questions risks leaving people feeling, with some justification, that no one is really paying attention to their concerns.

7. The fragmentation of subjectivity


We have argued that MCBA will often be paternalistic, while HDE need not be. In this last portion of the paper we want to highlight just how difficult it can be, in practice, to avoid paternalism. Policymakers will probably never be free from concerns about whether their actions are paternalistic. The reason has to do with what we may call the fragmentation of subjectivity, and it further highlights the vulnerabilities of MCBA to charges of paternalism. Let us explain. Economists conceptions of welfare are meant to embody antipaternalism by being subjectivist: making individuals own judgments authoritative or sovereign regarding whats best for them. But if the motivation for being subjectivist about welfare is avoiding paternalism, then it is not at all obvious what the right kind of subjectivism would be, for the nature of subjectivity itself is multifaceted. (Here we are concerned not with the correct theory of well34

We expand on this point in the next section.

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being tout court, but the metrics of well-being that should inform policy. It may not be paternalistic to be an objectivist about well-being; but it may well be paternalistic to base policy on objective notions of well-being. 35) Pleasure is often regarded as a subjective good, and hedonism a subjectivist account of well-being, yet this is not plausible if our concern is to avoid paternalism: what is pleasant, and what we judge to be good or desirable, are often very different things, and a hedonistic metric of welfare must override individuals nonhedonistic values. Subjectivism about welfare, if motivated by antipaternalism, must somehow connect well-being with what people judge to be best for themselves. This already eliminates the choice model of preference as a plausible, nonpaternalistic subjectivism: people very often make choices at odds with what they judge to be good for them, as we just saw. Besides mounting evidence of irrationality and other obvious mistakes, another problem is that individual choices might be locally rationalmaking sense in isolationyet globally irrational, in the sense that a persons overall pattern of choices conflicts with what she judges to be important in her life. Each new gadget might make sense on its own, but over time the pattern of acquisitions may end up crowding out other, more important priorities and leaving you with endless maintenance headaches. This is just an intrapersonal variant of the tragedy of the commons, wherein individually rational decisions add up to an irrational whole. Minimalism is rife with potential for paternalism. A plausible subjectivism must take persons judgments about their lives more seriously. Yet it is not at all clear how to formulate a judgment-based subjectivism that avoids worries about paternalism. A familiar problem is that actual preferences are often plainly mistaken (because uninformed, blankly irrational, etc.), while idealized preferences seem able to avoid this difficulty only by departing radically from agents actual perspectives, raising obvious concerns about paternalism. 36 Relatedly, any approach that relies only on agents explicitly voiced preferences, even when it is plain that the agent would repudiate them on reflection, faces not only plausibility issues but also paternalism worries: many citizens would object to policymakers relying solely on their spontaneously rendered opinions when those opinions, offered in haste or without thought, clearly conflict with their longstanding commitments. If policies are truly to reflect citizens priorities, they must take into accountat the very leastobvious facts about peoples values and priorities, discounting (e.g.) survey responses when those clearly conflict with peoples robust, effective, considered judgments of importance. Arguably, they should also apply some discount to responses that are known to be highly fragile, typically collapsing under scrutiny. For instance, lay hedonism usually crumbles when experience machine cases are brought to mind, and citizens could well object to policymakers ignoring this fact about the opinions they express in surveys. At this point, however, it becomes doubtful that any canonical means can be devised for ferreting out peoples true values. How much reflection is enough for judgments to reveal the persons true perspective? Sometimes getting people to reflect transforms their values, other times it yields unrepresentative judgments (e.g., more respectable), and often people lack clearly defined values to begin with. As well, peoples judgments about abstract principles may conflict with their judgments about concrete cases; which do we take as authoritative? We suggest that there will often be no canonical representation of what a person truly wants, so that no method of deliberation can be free from worries about paternalism. In different
In fact it may be paternalistic for policymakers to assume any theory of well-being, objective or subjective; see Haybron and Tiberius (RRR, in progress). Rather, policy may need to embody a pragmatic subjectivism that defers questions about the nature of well-being to those concerned. The difference should not matter here, however. 36 RRR: Rosati, Sobel, Tiberius.
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contexts we will rely on different kinds of information, making the best judgment we can about what position most accurately reflects the agents priorities. The problem is familiar to many of those who have had to make decisions for sick family members: Dad said this a while ago, but that really seems to fit his character more, etc. In such cases, the lingering sense that youve failed adequately to respect your loved ones wishes can be hard to avoid. It is not clear, then, what we should mean by want, such that we could simply do what people want us to do for them or on their behalf. Policymakers concerned to avoid paternalism, then, will have to eschew the dream of one single indicator of the agents point of view and use a plurality of locally appropriate indicators. 37 They must advert to a diverse set of indicators of what people care about; some judgment will have to be made about which information best reflects individuals true judgments of what they want, and there will likely be no simple rules for this. While choice behavior will be a useful source of information about peoples wants, it cannot, on pain of patent paternalism, be the only source of information. Far from being mindless, nonpaternalistic economics will have to be steeped in psychology. In short, avoiding, or at least minimizing, paternalism requires admitting a diverse set of indicators of what people care about into the policymakers toolbox. This should include evidence about happiness and other goods known to be widely valued. This sort of pluralism requires abandoning minimalism in favor of what we have called high fidelity economics. 38 Hi-fi economics will sometimes be less precise, and have more extensive empirical and normative commitments than minimalist economics. But it more faithfully represents the economic landscape, and better respects the values of economic agents.

8. Conclusion: burying the minimalist nanny state


Since World War II, the governing agricultural doctrine in government offices, universities, and corporations has been that there are too many people on the farm. This idea has supported, if indeed it has not caused, one of the most consequential migrations of history: millions of rural people moving from Country to city in a stream that has not slackened from the wars end until now. And the strongest force behind this migration, then as now, has been economic ruin on the farm. Today, with hundreds of farm families losing their farms every week, the economists are still saying, as they have said all along, that these people deserve to fail, that they have failed because they are the least efficient producers, and that the rest of us are better off for their failure. It is apparently easy to say that there are too many farmers, if one is not a farmer. This is not a pronouncement often heard in farm communities. Nor have farmers yet been informed of a dangerous surplus of population in the agribusiness professions or among the middlemen of the food system. No agricultural economist has yet perceived that there are too many agricultural economists.

Wendell Berry, What Are People For? We cannot emphasize strongly enough that our target is not economics, period, nor even mainstream economics. Yet our target, minimalism, nonetheless constitutes a large chunk of economic thoughtto the extent that Princetons Gul and Pesendorfer define the entire discipline in minimalist terms, and Harvards Glaeser deems minimalism part of the moral heart of economics. If so, then the moral heart of economics is deeply confused, its misguided efforts to
37 38

See Loewensteins Economist as Therapist for an approach in a similar spirit. RRR: Alexandrova and Haybron forthcoming

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avoid paternalism having the opposite effect, ensnaring it in a profoundly paternalistic approach to policy that systematically discounts peoples strongest preferences about their lives. So proceeding might make the equations easier to solve, but it is no way to let peoples priorities be effective in deciding the course of their lives. Even when the minimalist framework gets misused, as when agencies employ crude forms of CBA that consider only monetary costs and benefits, the commitment of so many esteemed economists to ignoring all signs of peoples concerns beyond those registered in choicewhich of course tends to favor monetary values in practiceprobably does little to discourage them. Policymakers can be all too eager to ignore peoples opinions, particularly if doing so licenses them to put their names on more dams. Minimalist economics may well encourage such abuses even where the theory does not strictly support them. We are not sure if economics, as a discipline, can be said to have a moral heart; economists are a pretty diverse lot. But we would suggest that if there is a moral heart to economics, or at least the broad subset of it that concerns us here, it is far less narrow than minimalists make it out to be: a commitment to agent sovereigntynot, incidentally, consumer sovereignty, which already embodies the defective view of human nature we are criticizingtreating people as, or as if they were, the ultimate authorities in matters concerning them. 39 Not because they are necessarily right about their intereststhey might be terribly mistakenbut because taking them to be the judge when making decisions on their behalf is necessary to treating them with respect, and without paternalism. And unlike rats and thermostats, human beings can do a lot more than simply exhibit behavior. They can speak for themselves, and those concerned not to be paternalists ought to listen. We do not know how much damage minimalist principles have done in the policy arena, but we do know that economics has long been the object of considerable resentment in many corners of the world, particularly among factory workers, farmers, fishers, small business owners and others whose cherished commitments are especially vulnerable to the vagaries of policy. For decades, such people have felt pushed around by governments and hubristic technocrats aiming to bring about a more prosperous future. 40 Obviously, this is the sort of thing governments sometimes just do, and they dont need inducements from economic theory to do it. As well, good policy often has losers; economies are dynamic, and commitments will sometimes go up in smoke as the marketplace leaves buggy makers and other outdated producers behind. That cant entirely be avoided. But we suspect that much of the resentment has less to do with sore losers than with a distinct sense that no one is listening. That their concerns arent being taken seriously, or that they are being railroaded by policies supposedly designed with their interests in mind, not that anyone bothered to ask. It is one thing to lose your livelihood, trade, land, community, and culture to the inevitable forces of change. But it is quite another to lose them to the fiat of tone-deaf bureaucrats whose calculations could assign no price to such affections, leaving only the market data which suggested you were actually getting a pretty good deal and would surely be happy about your lucrative new job toiling over the tar sands of some distant land. 41 When the stakes are high, mindless economics is bully economics.
We borrow the term from Arneson, though he uses it to characterize a slightly different view, regarding the nature of well-being (RRR). 40 RRR: Angner on overconfidence, IMF 41 RRR: the fate of idled fishermen from Nova Scotia, many of whom now find employment in the tar sands of Alberta. [check]
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References (incomplete, some citations not listed here)


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