Although physics and other legitimate sciences currently lack a Theory of Everything, the litmus test of policy philosophy and other pseudo-sciences is consistency of political theory. If you're a libertarian who would nevertheless tax people to prevent children from starving in the streets, prepare your armaments. You must defend your position, because if your theory is not 100% consistent, it's invalid.
Thus, libertarians have a problem.
Like everyone else, libertarian-minded people have ideas about how you should live your life. I would mandate exercise in exchange for healthcare coverage. If you don't exercise 30-60 minutes each day, then die. Yet I realize this drive is Will to Power rather than libertarian philosophy. The less self-aware have found a way to bring accord to the cognitive dissonance.
Enter Nudge.
In Nudge, the authors argue that experts (who are right as often as they are wrong) shouldn't be allowed to force to do anything. Instead, they should be allowed to nudge you. Let's walk down the primose path before seeing that it, like all gentle slopes, leads to Hell.
Organ Donation. Look, you're dead. People need your organs. The living need your organs. Why then aren't more people organ donors?
You can increase organ donation in one simple way: Make it opt-out rather than opt-in. I am an organ donor, but I had to agree to be an organ donor when re-newing my driver's license. Under the Nudge view, the DMV should make you out-out. In other words, the default is that you're an organ donor. If you have a problem with that, speak up.
Sounds great, right? Socially-beneficial policies like organ donation rise, and no one is forced to anything. Instead, you're nudged. Sweet.
Now let's see that path to Hell.
The Federal Reserve Has Nudged You Into the Stock Market. No one is forcing you to invest in the stock market. You could put your money into a savings account. You'd explain to me that things are not so simple.
The Federal Reserve has determined that interest rates should remain low. Your bank can borrow from the Fed at zero percent. Why would the banks pay savers generation interest rates? My bank unironically offered me a high-interest savings account - one-point-five percent.
You thus have a choice, right? You aren't forced into investing in the stock market. You can choose to save. Yet we see that choice belongs in quotes, since 1.5% returns on investment means you'll never retire. You've thus been nudged - by the same experts who told you housing goes up, and that the subprime market would not disrupt the economy - into investing in the stock market.
How do you feel about nudges now?
You Were Nudged Into Buying a Home. In 2005, people who had no business questioning my judgement nevertheless adjudicated me a "dead beat loser" because I didn't want to buy a home. How many men and women fought over the decision to buy a home during the bubble? (The typical beta male is the guy in the commercial at the bottom of this post. Ask him how that nudge feels now.)
By setting interest rates at 0% and allowing no-down-payment loans, the Federal Reserve (the same guys who have nudged you into the stock market) nudged you into buying a home. Real estate always goes up! Borrow that money. And so everyone - through experts' nudging - bought homes.
How do you feel about nudges now?
Nudge's False Premise Leads to False Conclusions. Someone has to nudge. Whom should that be? Experts, of course! There's one problem with our would-be nudgers. They are wrong:
two-thirds of the findings published in the top medical journals are refuted within a few years. It gets worse. As much as 90% of physicians' medical knowledge has been found to be substantially or completely wrong. In fact, there is a 1 in 12 chance that a doctor's diagnosis will be so wrong that it causes the patient significant harm. And it's not just medicine. Economists have found that all studies published in economics journals are likely to be wrong. [More.]
How many of those economists who nudged you into buying a home spotted the housing bubble? None. Plus, those same people who nudged you into the housing market (Ben Bernake and Tim Geithner) are the ones nudging you into the stock market.
They aren't forcing you. It's just a nudge.
Today's nudge is tomorrow's push into debt slavery and quiet desperation. I'm sure this chump wishes he had listened to me, but my life sucked for about three years because of nudges. What's my prize for being right? Have people proclaimed me a prophet, and thus now take my word on faith? Have people apologized for the horrible insults they levied at me - telling me I had no drive or ambition because I wouldn't buy a home?
Nope. Being right is a pie-eating contest where the prize is more pie. And so my life is now filled with more arguments, as now peole are telling me I must invest in the stock market, or must buy a home today. I'm "missing the biggest rally in history," that "presents the opportunity of a lifetime." Plus, "housing has bottomed." Why are these same people who dared to argue with me about the housing bubble saying such things? Because that's what the experts are nudging them to say. And that's why Nudge presents disastrous ideas:
