The World of Nudges Is Not Enough22.05.2017
This week, the newspaper The Economist features an article about “When nudge comes to shove”, charting the career of behavioural economics in policy making. A growing number of countries employs specialist task forces and even agencies that design policies by relying on behavioural economics insights. This development is dubbed ‘libertarian paternalism’ and is often criticized by (truly?) libertarian economists who are deeply sceptical about the government’s capacity to identify what is best for its people. Yet, it is also economists who advise the governments about what is the best policy, so in the end we seem to enter the age of economists in guiding our lives.
I think that the entire idea of nudges is a brilliant device of behavioural economists to advertise their work, a nudge that nudges public policies into nudging. This is old wine in new bottles, as many other critics have also pointed out frequently. After all, many decades ago the marriage between psychology and marketing was all about nudging people to buy certain goods and services. But in fact, the scope of so-called ‘nudges’ is much larger. For example, parents apply nudging all the way if they do not want to apply brute force in pushing their kids to certain actions. Religion is a rich set of nudges pushing people towards proper moral behaviour. And there is self-nudging, what has been already pointed out long time ago by psychologist Ainslie in his ‘picoeconomics’, that is, all kinds of tricks by which we commit ourselves to actions that might fall prey to our human weaknesses.
In other words, the social world is a world of nudges. If we recognize this, we discover the truly new insight that can be reaped from the literature on nudges. If we limit the meaning of the term to government policies, it may be useful. But then it just carves out a specific kind of mechanisms that are deliberately used in government policies. This is precisely the insight: When applying nudges, we activate mechanisms.
In the externalist approach to neuroeconomics that I champion, following the lead of Don Ross and others, nudges are simply examples of the universal mechanisms that enable our actions in establishing causal circuits between neurophysiological and external phenomena, such as a frame embodied in certain external signs and the corresponding neurophysiological mechanisms. Nudges in the narrow sense operate via exploiting insights about the specific causal structures that we can identify by experiments and other methods.
I wish to extend this observation in arguing that these insights point towards a new cross-disciplinary synthesis, which is a merger between behavioural economics and behavioural sociology. The mechanisms underlying nudges provide the microfoundations for understanding the causal linkages between individual and social phenomena. In sociology, we also have methodological clash between rational choice approaches and other schools of thought which posit an independent causal role of social phenomena. Nudges show how we can reconcile these positions. In an externalist view on mind and brain, social phenomena necessarily play an essential causal role in generating certain individual behavioural phenomena.