Yesterday I heard an interesting story on the radio about US President Obama's pick to head the Office of Information and Regulatory Affairs, Cass Sunstein. I recommend checking out the story, but here are a few key excerpts.
Cass Sunstein, President Obama's pick to head the Office of Information and Regulatory Affairs, is a vocal supporter of [...] economic policy that shapes itself around human psychology. Sunstein is just one of a number of high-level appointees now working in the Obama administration who favors this kind of approach.
[...]
Through their research, Kahneman and Tversky identified dozens of these biases and errors in judgment, which together painted a certain picture of the human animal. Human beings, it turns out, don't always make good decisions, and frequently the choices they do make aren't in their best interest.
[...]
"Merely accepting the fact that people do not necessarily make the best decisions for themselves is politically very explosive. The moment that you admit that, you have to start protecting people," Kahneman says.[...]
The Obama administration believes it needs to shape policy in a way that will keep us all from getting hit by trucks — health care trucks, financial trucks, trucks that come from every direction and affect every aspect of our lives.
At the risk of starting a discussion that will be wrecked by political wrestling, I'm always hopeful when I hear about governments applying what we learn from science to policy. Not to say that this always generates good policies, but it does generate the best policies we have reason to believe will be good (so long as you ignore the issue of actual politices that might get in the way).
What surprises me a lot is how strongly most Americans are opposed to soft paternalism - as if every bad thing should either by banned outright with huge penalties, or allowed and completely unregulated. Soft paternalism of government adjusting incentives to reduce harmful activities is widely accepted in Europe, and seems to work much better than either of the extreme.
One obvious example is opt-out system for organ donations. Who can honestly say it would have worse results than either forced organ donations, or opt-in?
Those who are against easy organ donation often argue that it would provide incentives for doctors to strive less to save people in accidents or suffering from issues like brain tumors, since on strict utilitarian grounds, that person's death might save several others. This isn't something you know is happening except statistically, which means no redress for those (or their heirs) so affected. Lots of people don't want to feel as though they cannot trust their doctor, even if more lives might be saved overall.