Focus: Budge up Nudge – Policy fashions and the demise of an intervention

Focus: Budge up Nudge – Policy fashions and the demise of an intervention

Alan Warde (University of Manchester)

 

There are few more important political issues of the 21st century than the making of arrangements to deal with the environmental consequences of global consumption patterns. Assessing the dimensions and scale of the problem and identifying strategies for dealing with it provides social science with one of its major challenges.

Social science’s duty to understand impartially the social world sits uneasily with the imperatives of democratic political direction. Yet it would be hard to claim that social sciences have no obligation to contribute to the design of interventions that might make the world better fit to deliver human well-being. So, when social scientific theories – especially ones other than orthodox Economics – come to play a significant role on the public stage, disciplines should sit up and take notice. That may be particularly the case, at least from the point of view of a sociologist like myself who takes the view that recent analysis has largely lost sight of the social aspects of human conduct.

The book by Richard Thaler and Cass Sunstein, Nudge: improving decisions about health, wealth and happiness, was published by Yale University Press in 2008. It had almost immediate public success and was re-published by the trade press publisher Penguin the following year (the edition from which I will be quoting). It had by then already entered political debate in the USA and the UK. Most remarkably, in the UK its core ideas became the central inspiration of a newly formed unit, the Behavioural Insight Team (BIT),[i] located in the Cabinet Office. They describe their aims as: ‘encouraging and supporting people to make better choices for themselves; considering the application of behavioural science to policy design and delivery; advancing behavioural science in public policy; championing scientific methodology to bring greater rigour to policy evaluation’.

BIT was directed by David Halpern, who had been a principal architect of a report commissioned by the previous Labour government, Mindspace: influencing behaviour through public policy, which had put nudge at the centre of proposals for policy change in the area of climate change. Many in powerful positions in policy and government anticipated its having significant potential for dealing with a wide range of political problems, among which was mitigation of the consequences of climate change.

Very recently there has been some speculation in the British broadsheet press that nudge has had its day and is being kicked into the long grass. It was reported that BIT had been partially privatised, sold off to another (left of centre) Think Tank. Simultaneously, the scientific theory behind Nudge is under challenge: it seems that the associated foundational work of the much-celebrated Daniel Kahneman (e.g. 2011) is being reviewed and re-appraised critically. Thus it appears that the period of influence of ‘Nudge’, at least at the highest echelons of state administration, will prove brief. Perhaps this is a harbinger of the future, where political advice will be subject to a sort of fashion-cycle. Perhaps the intellectual underpinnings of policy become subject to rapid change because of competition between the Think Tanks that now play a significant, but under studied, role in British politics.

Here I will explore what might be learned from the content and the career of Nudge. I want to understand why it was so important and whether as social scientists we ought to regret its passing. I give a brief description of its content. I explain why I initially thought it a work of significance. I then elaborate on some points that ought to continue to detain social scientists in light of the public issue of sustainable consumption.

Nudge: improving decisions about health, wealth and happiness

The distinctiveness of Nudge is founded on the proposition that the brain has two systems generating behaviour, one ‘automatic’, which is uncontrolled, effortless, associative, fast, unconscious and skilled, the other, ‘reflective’ – controlled, effortful, deductive, slow, self-aware and rule-following. The first is employed far more often. It results in biased judgments, difficulties in resisting temptation and a strong tendency to social conformity. If a great deal of our behaviour is governed by mental processes which are automatic, intuitive, emotion-driven, and which therefore involve little deliberation or rational thought, then we are certainly not rational, calculating, self-aware, independently-minded consumers.

It follows, then, that in order to get what we really want we may require help in avoiding the detrimental consequences of our naturally rash behaviour. Better ‘Choice Architecture’ is the solution. ‘Choice architects have the responsibility for organizing the context in which people make decisions’ (2009:5). A nudge is subsequently defined as: ‘any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid.’ (2009:6) This is the nub of their political philosophy of ‘libertarian paternalism’: you can always do otherwise, but if you aren’t thinking much you will do what is best for you and everyone else.

The book is filled with proposals about how the basic insights of the nudge might be applied to practical problems of citizens, firms and governments. In chapter 12, Thaler and Sunstein observe the shift in focus of government from issues like pollution to the global matter of climate change noting that in the past ‘governments seeking to protect the environment and to control the harmful health effects of pollution have gone well beyond a nudge, and their steps have not been libertarian. In this domain, freedom of choice has hardly been the guiding principle.’ (2009: 193) Even while explicitly recognising ‘that for environmental problems, gentle nudges may appear ridiculously inadequate’ (p.194), they discuss applications of their principles to the topic. They identify two problems, one that ‘incentives are not properly aligned’, which they illustrate in terms of the tragedy of the commons, and second that ‘people do not get feedback on the environmental consequences of their actions.’ (p.195) Consequently, they deal with two relevant elements of choice architecture, incentives and feedback. With the former rather than imposing taxes on polluters, they see much merit in cap and trade systems, applauding the use of such a mechanism to reduce acid rain in the USA as a ‘most spectacular success’. (p.199) Hence they advocate ‘a worldwide market in greenhouse gas emissions rights, with a cap on global emissions.’ (p.199).

Even while considering ‘that the most important step in dealing with environmental problems is getting the prices (that is, incentives) right’ (p.200), they concede that to be politically difficult. They therefore recommend ‘improvement in the process of feedback to consumers through better information and disclosure’. (p.200) They give examples of requiring firms to disclose evidence of hazards, for instance associated with the release of toxic chemicals or gases, which they see as sometimes prompting citizens or movements to activism and boycotts. By extension, labelling also brings pollution to public attention, for instance indicating fuel economy of different motor vehicles. These measures involve giving incentives to businesses to organise the site of consumption in such a manner that energy requirements are reduced. What I like about this is the principle that it does not require individuals to change their behaviour, but rather puts the onus for change on the more powerful agents. Thaler and Sunstein also float ‘a more ambitious idea’, (p.206) which is to give individuals the means to monitor instantaneously their own energy use. The idea is that with feedback, for instance when a motor vehicle displays information about fuel consumption and the effects on fuel economy of very rapid acceleration, drivers will be nudged into better behaviour (again presumably because they have exclusively economic motives).

Nudge’s Promise

Nudge promised much in relation to issues around political intervention in respect of climate change. The body of research which has for the last decade rallied around the concept of sustainable consumption could not but find the nudge phenomenon interesting. Its appeal was that it proposed the means to change the behaviour of a great many individuals, a necessary step en route to achieving sustainable patterns of consumption. Ultimately if the everyday behaviours and aspirations of individuals, in their billions, are not moderated with respect to volume, or pattern, or quality of everyday consumption it is very difficult to imagine containing global warming within manageable limits. The question then arises, how to change the standards, norms and expectations subtending current practices. That is partly a matter of imagining effective modes of political intervention. It is also partly a matter of, why it is that individuals behave in the way that they do and therefore how to understand consumption. Nudge was interesting because it offered some, not unique, but apparently novel and synthetic insight into both political intervention and consumer behaviour.

Nudge has, however, been subject to extensive criticism. Perhaps the greatest objections centre on the oxymoronic notion of libertarian paternalism. For some critics the mechanics of proposed interventions are, in principle or in practice, insufficiently libertarian, steered choices are deemed to involve exercise of undue authority (Sugden, 2009; Hausman and Welch, 2010). For others there is insufficient paternalism, because the nature and extent of the more important current problems require legislation and regulation (Wells, 2009). This is associated with a second issue, of the scale of change which nudging might achieve. Even Thaler and Sunstein concede that in relation to climate change nudges may be insufficient to the scale of the problem and that regulation may be necessary. Nudging can often only be a supplementary form of intervention. Theoretical controversy surrounds how much it is possible to alter personal habits, and thereby whether individual behaviour is the appropriate scientific object. Some assert that the lessons from cognitive science have been misinterpreted, either contending that people do deliberate much more than is assumed, or that they ought, for the better functioning of democracy, to think more than the nudge thesis assumes (John et al, 2009). Others object to the focus on the individual (although to be fair Thaler and Sunstein make as many suggestions for influencing the decisions of firms as they do for individuals) to the neglect of social structure and context (Brown, 2012).

Overall, Nudge has received more negative criticism than praise from scholars (not unusual for works which are popularly acclaimed and widely purchased). I share many of the fundamental concerns and misgivings of the critics (see Warde, 2011). It does depend who is doing the shoving and that the direction of travel can be determined democratically. Nudging will be ineffective in situations of intense market competition. Regulation cannot be dispensed with. Nudge provides a means for governments to seek to offload on to private citizens what might be considered their responsibilities and obligations, to shape and steer the social and institutional arrangements which frame people’s everyday lives. There are also limits to the extent to which economic incentives and the standard of rationality are helpful in understanding or changing behaviour.

Nevertheless, there is a danger of forgetting some important contributions of the book and overlooking lessons which might be learned. I remain attracted to several of its features. It chimes with critical trends in the sociology of culture which emphasise the limits of consciousness and of values in explaining conduct (Swidler, 1986; Martin, 2010). It provides evidence of the role of habits and routines, promising a more appropriate theory of action. In the notion of choice architecture can be found a way to see how institutions and infrastructures shape conduct, indication of the inevitability of nudging. It brings to the surface ways in which Behavioural Economics diverges from neo-classical economics, potentially challenging the latter’s theoretical hegemony. Finally it seems to add a nail in the coffin of particular techniques and approaches to political intervention in everyday practices.

Nudge as a counsel of political despair

In many respects Nudge is a counsel of political despair, a renunciation of vision of progress and improvement in social life through the channels of deliberative democratic processes. Libertarian paternalism concedes and signals that democratically elected governments cannot issue legitimate, binding directives to their citizens across a wide swathe. Strategies of prohibition, rationing, authoritative regulation, and even sharp hikes in taxation are off the agenda, deemed politically unfeasible.  Governments are therefore enticed. First, the diagnosis divests them of responsibility for directing serious collective and directive institutional reform. Second, it conceals the tacit contract with the interests of business that exonerates stock markets and supermarkets from culpability with respect to their social effects on social relations and distribution of resources. Nudge thus is an admission that even  more modest collectively determined policies to moderate the behaviour of individuals that bind whole populations, for example measures to restrict waste, cap the use of carbon fuels, set limits to the sugar, fat and salt content of foodstuffs, control strictly alcohol and tobacco use, etc., are deemed politically non-enforceable. Individualisation has tipped the balance against paternalistic discipline imposed in pursuit of a shared vision of the common good.

Consumption, markets and the political economy of capitalism

One intriguing intervention in the discussion of nudge came from the British Medical Association (BMA, 2012), a body not generally known for its radicalism, which issued a position paper in the British Medical Journal. It argued that, as expressed in a government white paper, ‘Healthy Lives, Healthy People’ (Department of Health, 2010), nudging would exacerbate rather than reduce health inequalities. It demanded that the government take some responsibility for health inequalities and that effective intervention would require more than nudges. It is remarkable not so much for its critique of nudge or for suggesting that in matters of public health regulation is necessary but because it critiques – politely, mildly, but unmistakeably – a lack of political will on the part of government and the evasive role of business and corporations. It even goes so far as to say that profit and public well-being are often not consistent with one another. It doesn’t mention capitalism, however.

That to which there is no alternative tends to become taken for granted and removed from critical inspection. During most of the 20th century when labour movements mobilised many millions of people around the malign effects of capitalist economic arrangements, capitalism was a central scientific object of examination and the concept encapsulated an institutional background which affected most other domains of social activity – family formation, industrial relations, inequality and material distribution, and political partisanship. With globalisation, and with the passing of the Soviet Union, the effects of the forces of capital accumulation on social affairs have retreated into the shadows, unanalysed and un-problematized. Recently, in sociological accounts, the term ‘neoliberalism’ has tended to stand in despite, as for instance Newman (2013) observes, its being a slippery concept, heterogeneous in its reference, sometimes holistic and epochal, in other instances a means to identify variegated ideological, governmental, political and economic projects. Arguably, capitalism is a better understood and more general conceptual tool. Yet analyses of sustainable consumption have proved loathe to root explanations in such terms. Perhaps the public reception of Thomas Piketty’s (2014) Capital in the 21st century will restore confidence in speaking openly and explicitly about the dynamics and consequences of the capitalist economy. It is one glimmering of the resuscitation of the wider circulation of studies in political economy, side-lined by the ideological dominance of neoliberalism, which would surely enhance debates about sustainable consumption.

Conclusion

While Nudge bears many of the defects attributed to it by its critics, there are grounds for not ejecting the baby with the proverbial bathwater. Social scientists may be missing a trick if they dismiss it entirely. The book raises a wide range of issues germane to an understanding of sustainable consumption. Since relying on individuals by dint of their will to change their consumption patterns and aspirations is probably doomed to failure, ideas about alternative modes of intervention should be treasured.

In this regard, Nudge is not inconsistent with some central sociological themes; adding sociological understanding of collective behaviour and rejecting the working assumption that there is no alternative to neo-liberal politics would make a difference. The idea of choice architecture, if refined to conceive it as institutional configurations of norms, offers an easy approximation to accounts of consumption which insist that choice is restricted, constrained and occasional. The underpinning theory of mind and the associated role for habituated and unreflective action deserve more attention in analyses of ordinary consumption. Moreover, Thaler and Sunstein lay much emphasis on firms as agents capable of making decisions relevant to the guiding of individual behaviour, which has the strong merit of locating levers of change with agents much more powerful than the isolated consumer.

There is much room for improvement in theoretical understanding and substantive analysis; I do not advocate organising the analysis of sustainable consumption around the concepts of behavioural economics. However, some elements of the account in Nudge, for pragmatic and intellectual reasons, are worth retaining, not least because it has raised consciousness among powerful political agents concerning the intractability of the problem of changing unsustainable styles of life.

References:

BMA (British Medical Association) (2012) ‘Behaviour change, public health and the role of the state – BMA position statement’, BMA Ethics Department, London.

Brown, P. (2012) ‘A nudge in the right direction?: towards a sociological engagement with libertarian paternalism’, Social Policy and Society, 11: 305-317

Department of Health (2010) Healthy Lives, Healthy People: Our strategy for public health in England, London, The Stationery Office.

Hausman D. and Welch, B. (2010) ‘Debate: to nudge or not to nudge’, Journal of Political Philosophy, 18(1): 123-136.

John, P., Smith, G. and Stoker, G. (2009) ‘Nudge nudge, think think: two strategies for changing civic behaviour’, The Political Quarterly, 80(3): 361-370.

Kahnemann, D. (2011) Thinking, Fast and Slow, London, Allen Lane.

Martin, J.L. (2010) ‘Life’s a beach but you’re an ant, and other unwelcome news for the sociology of culture’, Poetics, 38: 228-43.

Newman, J. (2013) ‘Landscapes of antagonism: local governance, neoliberalism and austerity’, Urban Studies, 1-16.

Piketty, T. (2014) Capital in the 21st century, Belknap/Harvard UP

Sugden, R. (2009) ‘On nudging: a review of Nudge: improving decisions about health, wealth and happiness by Richard H. Thaler and Cass R. Sunstein, International Journal of the Economics of Business, 16(3): 365-373.

Swidler, A. (1986) ‘Culture in action: symbols and strategies’, American Journal of Sociology, 51: 273-86.

Thaler, R. and Sunstein, C. (2009 [2008]) Nudge: improving decisions about health, wealth and happiness, London, Penguin.

Warde, A. (2011) ‘The power of nudge’, Food Ethics, 6(1): 20-21.

 

Alan Warde is Professor of Sociology at the University of Manchester. Between 2010-2012, he was the Jane and Aatos Erkko Visiting Research Professorship for Studies in Contemporary Society, at the University of Helsinki Collegium for Advanced Studies, Finland. With Tony Bennett, Mike Savage, Elisabeth Silva, E., Modesto Gayo-Cal, and David Wright, he is author of Culture, Class, Distinction (Routledge, 2009) and editor of Consumption (4 volumes). (Benchmarks in Culture and Society: Sage, 2010)

 

 

2 Comment responses

  1. Avatar
    May 13, 2015

    Nice article. Green party policies invoke both nudge and regulatory approaches. A household and a personal life whose small-scale daily patterns shift toward selfreliance and sustainable energy use fit in well with accepting and promoting largescale regulation of unsustainable consumption.
    h nudge

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