Libertarian paternalism is an oxymoron: an essay in defence of liberty

Veetil, Vipin P.
June 2011
European Journal of Law & Economics;Jun2011, Vol. 31 Issue 3, p321
Academic Journal
Sunstein and Thaler's proposal for 'libertarian paternalism' in their paper titled 'Libertarian Paternalism is not an Oxymoron' (LPNO from here on) is based on the contention that paternalism is sometimes (1) inevitable and (2) non coercive, and (3) that individuals do not always make 'rational' decisions. The first two contentions are untrue, and the question of whether individuals make 'rational' decisions as judged by the axiomatic definition of neo-classical economic theory is vestigial to the ideas and policy prescriptions of classical liberal and libertarian political economy. The paper, fraught with definitional confusions and methodological difficulties, is a superior example of how correct empirical observations and laudable advancements in identifying cognitive characteristics that may be relevant to economic analysis can lead to unsound theories due to methodological deficiencies. Policy prescriptions in the long run must take an institutional form; the greatest deception of the paper lies in its omission of any discussion on such an institution, which, I believe by logical necessity would be a Platonist autocratic bureaucracy. A consistent application of libertarian paternalism is the 'road to serfdom'.


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