Is Libertarian Paternalism Libertarian?

As mentioned yesterday, Cass Sunstein is currently guest blogging on the topic of libertarian paternalism at the Volokh Conspiracy. In his introductory post, Professor Sunstein summarizes his idea as follows:

The basic idea is that private and public institutions might choose approaches that a) fully maintain freedom of choice (and are in that sense libertarian) but b) gently steer people's decisions in directions that will make their lives go better by their own lights (and are in that sense paternalistic).

The New York Times has even more succinctly summed up the concept as "[y]ou know what's best for you, and we'll help you do it," with the government adopting policies to "nudge [people] in the right direction." Perhaps the most high profile, and controversial, examples of this involve self-binding schemes such as those adopted in Michigan and Missouri, which allow individuals to voluntarily place themselves on casino gambling blacklists, with state governments then enforcing those voluntary bans by criminally prosecuting violators and confiscating their winnings. Proponents of the libertarian paternalist approach have advocated adopting such self-binding schemes to solve a wide range of other issues, including combating cigarette and alcohol consumption.

For a variety of reasons, I disagree with Professor Sunstein that libertarian paternalism--at least in the form of self-binding schemes--are viable vehicles to address these issues. This post, however, will focus on whether libertarian paternalism actually maintains freedom of choice or otherwise promotes libertarian values.

Libertarians such as Jacob Sullum and myself oppose governmental bans on smoking and other vices on philosophical grounds. As Sullum observes in his book, such bans are "an odious intrusion by the state into matters that should remain private." Essentially, Sullum and other libertarians believe that adults are well aware of the dangers involved in smoking, gambling, and similar activities, but "for the sake of pleasure, utility, or convenience" have chosen "to accept the risks."

Libertarian paternalism as formulated by Sunstein acknowledges the veracity of this perspective, and recognizes that the government should not eliminate an adult's freedom to engage in risky behavior, even when such choices may not result in what the government perceives as the ideal outcome. But do self-binding programs--for instance, a system that would allow an individual to place himself on a tobacco blacklist in perpetuity--truly preserve the libertarian value of freedom of choice? I argue that they do not.

Proponents of libertarian paternalism wrongly assume that government provides the only constraint on adult behavior, and thus an individual who opts-into a system where smoking, gambling, or other vices are criminalized has done so because his present-self wishes for the government to control his future-self by placing constraints on his behavior. But this framework fails to consider the role of powerful third parties--such as an individual's employer or educational institution--who often wield enough influence to coerce individuals to sign away their legal rights.

There is no doubt that these third parties already place significant limitations on an adult's legal rights in a number of contexts. Liberty University, for instance, considers use of tobacco products as a violation of its honor code, which can result in fine, reprimand, and--if enough reprimands are accumulated--suspension or even expulsion. In the employer context, the National Rifle Association and other advocacy groups have recently drawn attention to many large Georgia employers, such as Wal-Mart, that forbid their employees from keeping guns in their parked cars while at work.

Such limitations on legal rights by educational institutions and employers are not significantly obtrusive or reduce freedom of choice to a great extent. After all, a cigarette smoker does not have to enroll in Liberty University, and even if subjected to reprimand such an individual can transfer to another school, one where he would retain the right to use tobacco products off-campus. Similarly, an employee who runs awry of Wal-Mart's gun ban may seek employment elsewhere--and in the worst case scenario, at least has the opportunity to choose unemployment and keeping a gun in one's car over employment and leaving a gun at home.

But libertarian paternalism programs create a danger of those same third parties curtailing an individual's freedom in perpetuity. Liberty University, for instance, may require as a condition of enrollment that a student opt-into a system where possessing tobacco is illegal and subject to criminal prosecution, even long after a student has separated from the college. Perhaps more significantly, large groups of third parties, such as employers, may require such opt-ins as a condition of employment, thus forcing individuals to give up activities such as gambling forever if they wish to earn a living in a given state. In effect, employers, schools, and other third parties would outsource enforcement of their internal policies to the state--hardly a libertarian concept.

The faults with the libertarian paternalist philosophy are not limited to libertarian paternalism's fundamental tension with libertarian principles. In my next blog post, I will argue that libertarian paternalism is also not consistent with paternalist principles.