For the American Interest, Steven Teles explores the apparent (for him, real) paradox of a libertarian “nudge.”
It seems like only a few years ago that economists in the mode of the recently deceased Gary Becker were deluging policymakers with an image of consumers as hyper-rational utility-maximizers, capable of impressive foresight and calculation. Whether taking drugs, getting married or divorced, or even choosing to commit suicide, individuals could be accurately modeled as altogether rational. Such rational people could be counted on to be effective stewards of their own welfare, and thus the idea that government could improve on voluntary market transactions was a fantasy.
Read the full article here.