Monday, May 17, 2010

New Paternalism, Regulation and Cass Sunstein

by Mario Rizzo

The New York Times magazine has an interesting, if somewhat uncritical, article on Cass Sunstein, the Obama regulation czar. The “best” part is the section about me:
Some scholars dislike the strong, if subtle, governmental hand that is embedded in this last proposal. It seems more forceful than a nudge. “Once you get to a point where you have automatic enrollment, you raise the question, What kind of fund?” Mario Rizzo, a professor of economics at New York University, says. “The problem is that if you were enrolled automatically, you could complain later that you’d been put into either a too-risky or a too-conservative fund. So then you micromanage that and you say you have to have a balanced fund. But pretty soon you’re on a slippery slope, where you’re dictating people’s retirement choices.” Rizzo told me about an academic study of gift-giving that found that most people would value cash more highly than the gifts they get for holidays; if even your friends and family can’t figure out what you want, he asked, how can a distant bureaucrat? “Sunstein is very taken with the need for experts,” Rizzo says. “But it turns out experts are subject to these cognitive quirks, too.”
Of course, if you want a more scholarly examination of these issues, please take a look at my work with Glen Whitman on my bepress site. Here and here. There are also summaries in previous TM posts. (Here for the knowledge-problem critique of new paternalism, and here for the first of eleven parts on the slippery slope arguments against the alleged moderation of new paternalism.)  And there is the very interesting discussion launched by Glen Whitman at Cato Unbound.

One serious objection I have is the characterization of Cass Sunstein as exemplifying ”the quintessential University of Chicago habit of mind” (quoting the former University of Chicago law school dean, Saul Levmore)

Clearly, this is not accurate in at least two senses. First, he does not exemplify what is unique about Chicago’s social science traditions. I should have thought that would lie in the approaches of Milton Friedman, Frank H. Knight, George Stigler and others who were strong anti-paternalists.

Read the rest here.

No comments:

Post a Comment