23 February 2010

Nudging and the Great Mind Fallacy

As I mentioned in an earlier post, my paper "Adam Smith and the Great Mind Fallacy" was recently published in the journal Social Philosophy and Policy. In it I argue that one of Smith's arguments for limiting the scope of government authority is that such authority founders on two formidable obstacles: the "Herding Cats Problem" that humans often do not do what a political theorist or social engineer wants or expects them to do; and the "Gathering Information Problem" that theorists, legislators, or regulators cannot gather and process the information that would be necessary to devise successful and useful regulations. I argue moreover that Smith identifies what I call the "Great Mind Fallacy," which is the false yet strangely persistent assumption that someone, somewhere can overcome both the HCP and the GIP.

Although Friedrich Hayek is usually regarded as the standard-bearer for such arguments, I show that he builds on arguments Smith made in the eighteenth century. I also show how Smith's arguments would seem to undermine recent arguments defending paternalism of government experts, like those found in Sunstein and Thaler's Nudge and Peter Ubel's Free Market Madness.

I discovered today the recent publication of another paper that draws conclusions similar to mine, and even relies on some arguments that are similar, though does so with a heavier emphasis on economic analysis than, as in my paper, on philosophical and exegetical analysis. It is "The Knowledge Problem of New Paternalism," by Mario J. Rizzo and Douglas Glenn Whitman, published in Brigham Young University Law Review (vol. 2009, no. 4: 905-968; text available here). I highly recommend Rizzo's and Whitman's article.

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