There are far too many economists and other social scientists who want to tell me what to do. I particularly object to those who tell me that too much choice is making me unhappy. Professor Barry Schwartz was one of these – in his book [amazon_link id=”0060005696″ target=”_blank” ]The Paradox of Choice[/amazon_link] he tried to tell me what kinds of clothes I should be buying. Well, not me personally, but one of his main examples of excessive choice was the range of styles of jeans available in The Gap. (What would he make of Selfridges if he thinks there’s too much in The Gap?) I for one don’t want economics and psychology profs telling me what to wear. Nor do I hear them saying there’s too much choice when it comes to books, or charities to donate to. No, the supposed surfeit of choice is restricted to purchases they themselves don’t care about.

A new book by Gilles Saint-Paul, [amazon_link id=”0691128170″ target=”_blank” ]The Tyranny of Utility: Behavioral Social Science and the Rise of Paternalism[/amazon_link], does a great job of articulating this kind of concern about behavioural and ‘happiness’ economics. As he says in the Introduction, “In recent years a new brand of economics (labelled ‘behavioral’) departs from those [individualistic Enlightenment] foundations and brings new ammunition to state involvement in private lives.” (p2). He is concerned about the combination of theorising about psychological “biases” that can be corrected by wise paternalists and information technology giving governments better tools to “guide” behaviour.

The observation that behavioural economics or ‘nudging’ is paternalistic is not new, and is one reason that the fashion for behavioural theorising is relatively contained. Indeed, I would say it has met with more enthusiasm in government than in academic circles. The great contribution of this new book is to link the paternalism of these models to the utilitarian philosophy that also underpins the ‘happiness’ movement. (Regular readers of this blog will know my scepticism about happiness as a policy target.) Accepting both utilitarian philosophy and the clear empirical evidence about the existences of biases in decisions takes one inevitably down the road of constraining individual choice for their own and society’s welfare.

Saint-Paul makes a powerful case for accepting what appear to be flawed market outcomes in order to protect liberty. After all, while a little bit of nudging may be sensible, taken too far it could undermine the validity of private contracts, because who is to say what psychological biases I was labouring under when I signed up for an insurance policy? At a time when there is an understandable but inevitably extreme reaction against markets, it’s great to have somebody making a powerful case for the philosophical merits of markets as well as states as an organising mechanism for society. He sums up: “Individual freedom and responsibility must be recognized as central social values.” Even if we get things wrong all the time.

[amazon_image id=”0691128170″ link=”true” target=”_blank” size=”medium” ]The Tyranny of Utility: Behavioral Social Science and the Rise of Paternalism[/amazon_image]