Financial Times FT.com

Nudges are for markets not nations

By Tim Harford

Published: August 21 2008 20:15 | Last updated: August 21 2008 20:15

There is no idea so good that it cannot be spoilt by politicians, and such a fate is now befalling libertarian paternalism – recently rebranded as “nudging”. Libertarian paternalism is a conscious effort to help people make better choices without forbidding anything. It embraces anything from assuming that you would like to contribute to a company pension unless you say otherwise, to placing the doughnuts in a quieter corner of the supermarket.

The concept, courtesy of two US professors, Richard Thaler and Cass Sunstein, deserves attention because it is a thoughtful response to a deep policy problem. It has been seized instead by David Cameron’s opposition Conservative party in the UK as a free lunch, sound bite and flag of convenience all rolled into one.

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