Thursday, May 08, 2008

Is Libertarian Paternalism Consistent with Parternalist Principles?

Thanks to Marc Randazza linking to my blog post from last month about whether libertarian paternalism is libertarian, I feel obligated to make the promised follow-up post on whether libertarian paternalism is consistent with paternalist values.

Unlike libertarians, paternalists do not place nearly as high a premium on true freedom of choice. This should not come as a surprise, since the very philosophy used to justify paternalist policies is that individuals often do not know what is best for themselves, and thus a more enlightened third party should take their choice away and make the "right" decision for them. Therefore, paternalists may not be concerned if employers, educational institutions, or other third parties coerce adults into self-binding programs for their own good.

But is the third party coercion that may result from a libertarian paternalist regime actually consistent with paternalist principles? One must look at the movies of these third parties to determine whether they are truly acting in a paternalist fashion. Liberty University, for instance, appears to have created its rules for a purpose other than helping adults make the right decisions, stating that it has instituted its honor code to "promote a positive Christian community," and one would expect this same rationale to apply if the state of Virginia created a self-binding tobacco criminalization regime and Liberty required its students to opt-in. Though Liberty University may ultimately force its students to make the "right" decision through its actions, one cannot say that Liberty is actually engaging in paternalism, for in such a scenario Liberty would be primarily furthering its own interests rather than those of its students.

Potential coercion in the employment setting, however, provides an even stronger example of how the practical effects of libertarian paternalism may be inconsistent with the ideals of paternalism. As the Georgia gun situation demonstrates, businesses, as profit-maximizing entities, will generally place profitability over ideology or other concerns when making business-related decisions. The Georgia businesses in question--many of whom sell guns in their stores, and whose owners may themselves believe in the right to bear arms--have not banned their employees from keeping guns in their parked cars because of anti-gun animus or a belief that they are helping their employees make the "right" decision, but because insurance companies charge significantly higher premiums when employers allow this practice. Likewise, insurance companies do not charge employers these higher rates out of animus or a desire to help businesses and their employees make "smart" choices, but because their research has shown that businesses that allow guns provide a greater risk than the general population of businesses and thus must pay higher premiums to ensure that the insurance company remains profitable.

In the gun case, as well as a hypothetical smoking or gambling self-binding program, employers and their insurers would coerce employees into certain decisions not because they are enlightened decision makers, but because their own self interests require it. Though employers and insurance companies acting in their own self interests may result in outcomes that overlap with the actual best interests of employees, the process is not consistent with paternalist ideology, which assumes a benevolent, enlightened third party whose primary objective is furthering the interest of those who, for whatever reason, are unable to make the best decisions for themselves. For this reason, libertarian paternalism is not consistent with paternalist values or ideals.

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