Why Opting Out Is No “Third Way” – Reason Magazine
Thursday October 2, 2008 6:56 am Leave a comment
Wilkinson is correct, in that Paternalism, however well intentioned, is not (and can never be) Libertarian. It is, in fact, merely idealised “Platonism” and based on the notion that we can have, “in charge” of “nudging” some benevolent “Philosopher King” (or Philosopher Committee) which will instigate “wise and humane manipulations” to the “choice architecture” which will result in the “bewildered herd” making more rational choices. However, he misses the opportunity to indicate what WOULD have the desired effect, viz “Perfect Information”.
“Perfect Information” is an academic construct with a painfully limited definition. To the average economist it means no more than every supplier and potential consumer knowing what goods and services are available in the marketplace and what prices are being charged for same. Capitalism has been built almost entirely on that premise. To the arch Capitalist, “Perfect Information” is whatever it takes to get the customer to buy (all the positive stuff) and, as little as possible about any negatives. If they don’t always lie, they will always provide minimum rather than maximum data.
This attitude lies at the heart of every major financial crisis we have witnessed in the past 30 years and probably all others. In short, Capitalists feel free to hide the facts about what they are doing. Indeed, they build laws which preserve their right to “commercial confidentiality” into the trading system.
Hence, for example, no one actually knew what they were buying when they were buying up all the bad debt packages containing hidden subprime loans. Similarly, no one knew, when they bought Nike trainers that they were being produced under sweat shop conditions in the 3rd world. No one knew, when they bought their coffee at Starbucks, that the coffee plantations were paid less than the cost of production and trapped in a cycle of poverty, at the behest of the IMF (and it’s Chicago economic philosophy) and that the workers were often starving kids. And so on.
If we really want “choice architecture” to work and allow free and INFORMED consent to be the basis of commercial decisions, then we all need – at least the option of – access to genuine “Perfect Information”. Which means no more “commercial confidentiality” regarding any of the issues which should influence our choices. In future, we want to know where the goods have come from, what external costs were incurred, how the production and distribution chain were rewarded for their part in the process and how much net profit goes to the merchant selling us the goods on the day. THEN we can make truly rational choices.
This will not solve the problem that the Paternalists are addressing because the vast majority of consumers will not bother availing themselves of the relevant data. BUT the thinking and campaigning consumers will. And they will gradually lead the rest of the bewildered herd in a more rational direction. That is probably about as good as it can get, while still being a genuine libertarian economy and society…