Nudges, solidaristic protectionism, and the re-appropriation of libertarianism

Nudges, solidaristic protectionism, and the re-appropriation of libertarianism

Linsey McGoey

Jana Bacevic’s compelling commentary for Discover Society on the politics of nudging identifies a number of key shifts in political governance over recent years. As she points out, throughout the ongoing coronavirus pandemic, the British government has been advised by a group known informally as the ‘nudge unit.’ It was established in 2010, two years after Cass Sunstein and Richard Thaler published their bestselling book, Nudge, which popularized their concept of ‘libertarian paternalism.’

Bacevic astutely calls attention to the most important cognitive element of their work, which is that it diverges from earlier neoclassical economic frameworks which emphasize rational decision-making. Instead, the nudge crowd follows the behavioural economics turn which stresses the human capacity to ignore relevant information and, thus, to act irrationally.

Notably, Bacevic chooses to call this approach ‘liberal paternalism’ rather than use their own descriptor of ‘libertarian paternalism,’ and in ways, I can see the reasoning here. Various governments closer to ‘liberal’ than libertarian outlooks have adopted nudge techniques, which perhaps makes ‘liberal paternalism’ a better and broader umbrella term.

All the same, I think dropping the earlier emphasis on ‘libertarian’ misses a chance to better explore some on the unspoken biases and assumptions that underpin the work of self-proclaimed libertarian paternalists.

One of the ironies of Sunstein and Thaler’s work is that, while they incessantly discuss people’s penchant to be misled by cognitive bias, they do very little to explore their own assumptions. In particular, they take at face value that the political right’s use of the word ‘libertarianism’ from the 1960s onwards is an apt way to understand human choice and freedom. In doing so, they concede too much intellectual ground to the libertarian right, helping to perpetuate one of the worst academic fallacies from the 20th century on: the mistaken belief that earlier ‘classical liberals’ were against government regulation and interventionism intended to support the most marginalized in a society.

A quick look at the appropriation of the word ‘libertarianism’ makes this clearer. The word was originally associated with anarchist movements in the mid-19th century onward, until the latter half of the 20th century, when a handful of academics deliberately commandeered it for the right. It’s a well-known history, open to read on Wikipedia, which quotes US ‘Austrian economist’, Murray Rothbard. As he puts it: ‘“Libertarians” had long been simply a polite word for left-wing anarchists, that is for anti-private property anarchists, either of the communist or syndicalist variety. But now we had taken it over.’

What’s particularly interesting about Rothbard’s comment is a quote directly above this, also on Wikipedia, where he makes clear his motivation for appropriating the term: ‘it is true that the word “liberal” once described persons who respected the individual and feared the use of mass compulsions. But the leftists have now corrupted that once-proud term…As a result, those of us who believe in freedom must explain that when we call ourselves liberals, we mean liberals in the uncorrupted classical sense.’

Rothbard was a major US advocate of the Austrian economists Ludwig von Mises and Friedrich Hayek, and his referring to the ‘uncorrupted classical sense’ of liberalism squares with their reading of thinkers like Adam Smith and Alexis de Tocqueville. Hayek’s dislike of both progressive liberalism in the US and growing socialism in Europe led him to ignore any aspects of both Smith and Tocqueville’s work that actually resonate firmly today with the very left-leaning ‘liberal’ outlook which Rothbard scorns above. When Rothbard describes ‘liberals in the uncorrupted classical sense’ to mean anti-statist liberalism, he is, whether he admits or not, appealing more to Hayek’s misconceptions than to an accurate reading of classical liberalism.

The ‘real’ Smith has now been explored at length in recent books from across the political spectrum, from British MP Jesse Norman on the right, to Warwick politics professor Matthew Watson on the left. He was never against government intervention in a dogmatic way, however much think-tanks such as the Adam Smith Institute (ASI), where nobody seems to have read Smith, might disagree. What he scorned were interventions that favoured select groups in society, and particularly wealthy merchants who he felt were benefitting too much from preferential legislation, leading to unfair subsidies offered to a select few by ‘a nation whose government is influenced by shopkeepers.’ Today, during the current pandemic, when market fundamentalists at the ASI, like Matthew Lesh, tweet (now deleted, see header illustration) to praise retailers for inflating the prices of basic necessities, they’re ignoring Smith’s own caveat against letting shopkeepers dictate policymaking.

For his part, Tocqueville was aghast at the unsafe working conditions of people employed in private trade, and he called for strong corporate regulation. In his words, private industry can ‘endanger the health, even the life, of those who make money out of it or who are employed therein. Therefore, the industrial classes, more than other classes, need rules, supervision, and restraint, and it naturally follows that the functions of government multiply as they multiply.’

From Smith’s suggestion in Wealth of Nations for limits on interest rates to avoid extortionate lending practices, to Tocqueville’s suggestion that elites should ‘attach less importance to the work and more to the workman,’ the classical liberals were not wedded to some ‘small government’ mantra as later thinkers on both the right and the left have assumed. Rather, they were strongly concerned with protecting marginalized groups from exploitation by the powerful.

Today’s libertarian paternalists such as Sunstein and Thaler, as well as the Conservative governments that revere their work, think it is essential both to minimize and to obscure government regulation lest too many on the right scream ‘foul’ over misguided government intervention. But strong regulation of corporate predation is how the excesses of the 1920s were curbed until the 1980s, when deregulation by the Reagan and Thatcher governments onwards was unleashed.

Today, interventionism is no longer quite as dirty a word. The package of government support announced by the UK chancellor on March 20 offers much-needed assistance to many across Britain: it might not be enough, but it’s a start. And yet, there’s still an unanswered question of who will end up paying for it. After the 2008 financial crisis, the majority of citizens benefitted very little from quantitative easing that enriched investors. The poorest continued to endure year after year of misery inflicted through austerity measures while corporate tax avoidance proceeded unhindered. Only vigilance will ensure the same thing doesn’t happen this time.

The assistance programme announced by Britain’s Tory government was taken from the left’s playbook. Even if, later on, the right tries to displace costs onto the most marginalized, at least the normative case for interventionism has been made. But what should it be called, this new ethos of interventionism?

We should resist any acceptance of a heteronormative word like ‘paternalism,’ as some ‘nudgers’ might want. Instead, the progressive left should call it what is: protectionism, deliberately advancing new language and phrases that strip the word of the almost universally pejorative connotations it has carried for nearly two centuries.

Clearly not all types of protectionism should be commended. Certainly not the jingoist protectionism favoured by Brexiteers like Boris Johnson in the UK and Donald Trump or Steve Bannon in the US, nor the type of market protectionism implicitly advocated by Austrian economists such as Hayek.

Nor is ‘patriotic protectionism’ helpful, as it threatens to galvanize jingoism on the left. As the left embraces positive elements of government interventionism and protectionism, different catchphrases that emphasize international solidarity are needed. Phrases like solidaristic protectionism. Phrases like international protectionism. Deliberately oxymoronic phrases might dish back a little of what the right has dished out, like ‘protective libertarianism’ or  ‘solidaristic libertarianism’ that celebrates protection of the most marginalized and their right to liberty from crushing debt and working conditions. Libertarianism never belonged to the right and it’s not theirs to keep. Solidarity advocates are already reclaiming it.

Nor does the nudge crowd deserve a word as powerful as libertarianism. As Bacevic brilliantly observes,  the British public has endured over 10 years of asinine policies that ‘nudge’ people all the wrong directions. Nudged to buy fruit that is unaffordable; nudged to move neighbourhoods to find a decent school, rather than making all schools decent for all; nudged towards huge debt burdens rather than effectively regulating the housing market. No more. We need international protectionism that protects the weakest against the predations of the strongest. During this devastating pandemic, it’s already become clear that a new, solidaristic libertarianism has been unleashed, building support networks from the ground up. And yet, while anarchists might object, such grassroots networks can’t thrive in a vacuum: they need support from a democratic socialist state devoted to ensuring that the most marginal in any society have their human rights fulfilled, the right to health, housing, food, and education.

Call it what you want, as long as the greatest lie of the 20th century is banished: the lie that governments can do little good. We the people are the government, driven by an eternal good: the righteous demand for equal liberty and protection for all.


Linsey McGoey is Professor of Sociology at the University of Essex.