“Nudging” versus “Coercion” – Balancing Environmental Protection with Liberty and Freedom

The recent controversy over the U.S. Government’s increased proclivity to secretly paw through the electronic communications and telephone records of Americans has prompted some soul-searching by many.  Is this just one more step toward fulfilling the Orwellian prophecy of 1984?  Has the citizenry ceded too much of their freedoms and liberty for the sake of feeling safer and more secure?

Some conservatives, like Andy McCarthy, over at NRO, argue the hype as non-sense and claims the government’s action is not only constitutional, but completely appropriate and necessary to change and stop some very bad human behavior.  McCarthy believes it’s not “big government” to blame but the little people in whom we’ve entrusted the keys to the government, and our human frailties.  Jonah Goldberg, over at NRO, however, takes issue with McCarthy, and argues there is more behind the secret curtain that deserves our skepticism. Goldberg contends that we should look askance at new powerful mega-computers and technologies that equip us with the ability to crunch huge amounts of data heretofore never possible.  Goldberg cautions

The arrival of “big data” — the ability to crunch massive amounts of information to find patterns and, ultimately, to manipulate human behavior — creates opportunities for government (and corporations) that were literally unimaginable not long ago. Behavioral economists, neuroscientists, and liberal policy wonks have already fallen in love with the idea of using these new technologies and insights to “nudge” Americans into making “better” decisions. No doubt some of these decisions really are better, but the scare quotes are necessary because the final arbiters of what constitutes the right choice are the would-be social engineers.

The concept of nudging or engineering human behaviour toward better decisions is nothing new, and the idea generally sends shivers down the spine of most Americans, but especially conservatives, who are a highly mistrustful bunch, and don’t trust those sitting behind a government desk pulling levers and making life changing value decisions for the rest of us.  By and large, most Americans dislike paternalistic “Big Gulp” government, and recoil at the thought of government telling us we’re too fat or for that matter coercing us onto a crash diet.  But fact check – government is an agent of coercion.  So when does “good coercion,” critical to maintaining ordered liberty and the public good, cross the line into “bad coercion” and threaten our freedoms and liberty.

Put succinctly, John Stuart Mills‘ view on liberty was that government cannot legitimately coerce people to do something if its only goal is to protect people from themselves.  F. A. Hayek defined the state of liberty as “the condition of men in which coercion by others is reduced as much as is possible in society.”  What is best, according to Hayek, “is not what freedom I personally would like to exercise but what freedom some person may need in order to do things beneficial to society.”

I’ve thought quite a bit about coercion and when and in what amounts it is appropriate for the benefit of society and the common good.  Even though we in the U.S. are a people brimming with freedom and choices, we endure government coercion everyday in our daily lives, including when we’re forced to pay taxes, forced to follow traffic signs, forced to recycle waste products, or precluded from harming an endangered species or from taking another’s property against his will.  Although these are not coercive in the truest sense, as articulated by Hayek, since these government actions are based on general abstractions of law imposed irrespective of their application to us.  But if you think about it, most examples of government coercion, or compulsion for that matter, in free-society are aimed at stopping humans from doing something bad to others or the environment, restraints imposed upon unbounded human passions and desires – concepts central to conservative principles oft cited by Russell Kirk.

What to do, however, when society is unable to change those bad behaviors that adversely affect others?  And who is to decide what’s bad?  And how much bad behavior should be tolerated before government intervention is needed?  As a conservative, I’m one who generally believes that all options short of outright coercion present the better option.   And while coercion has qualitative and quantiative boundaries that must be respected and understood, there are times when coercion may be appropriate to change bad behavior.  And this is where I, as a conservative, may diverge from my libertarian friends, who are far more skeptical of government intervention.

The concepts of nudging and coercion I think are particularly enlightening in the context of society’s shared goals for addressing environmental pollution and externalities.  Historically, most environmental transgressions were dealt with through common law norms and claims that more or less would guide human behavior toward a greater common good and promote neighborly harmony.  But society has become more complex and inter-related and with the advent of modern environmental laws the common law approach has given way to the regulatory administrative state that necessarily involves legislators and bureaucrats telling us what we can and ought not do.  Herein lies the conundrum.  As environmental problems become more intractable with fewer local solutions, the most convenient approach for dealing with them is through more coercive solutions which, although portend to offer greater certainty of outcome – as imbued with the effectiveness of force – often come with unintended consequences.  And it is this reflex by society to opt for convenience and the illusion of certainty and safety that deserves healthy skepticism because of the pernicious risks of pervasive and unbounded coercion.

If we are to maximize and protect our liberty and freedoms and still deal with pressing environmental problems (caused by ever increasing population and diffuse environmental complexity), there is something to be gained from recognizing the distinction between nudging and coercion, and knowing the appropriate times to use either or both.   I’m not one to put much stock in theories espoused by wild-haired economists and psychologists, but the idea of social engineering with a new label, dubbed the Nudge Theory, does have some appeal.  Boiled down to its essence, it suggests that humans best respond to change through “nudging” as opposed to outright “coercion.”  Cass Sunstein wrote a book about this and the role of government, Nudge: Improving Decision About Health, Wealth and Happiness, which I previously discussed here.  In a very funny book review by Dahlia Lithwick, she says

The real trick to understanding how to approach Nudge: Improving Decisions About Health, Wealth, and Happiness, the new book by Cass R. Sunstein and Richard H. Thaler, lies in recognizing the limitations of your inner Homer Simpson. In the authors’ view, your whole brain is a civil-war zone between your “automatic system” (the rapid, intuitive, reptilian part) and your “reflective system” (the slow, deliberate, self-conscious part). Behavioral economists take the position that snap judgments formed by your Homer Simpson brain are often quite terrible ones, which go on to have enormous consequences in your financial, physical, and emotional life. Like Homer, we use all sorts of mental “heuristics” or cognitive “rules of thumb” that are flawed, which is why we pay for magazine subscriptions for years after the three-month “free” trial ended (“status quo bias”) and why we buy lottery tickets (“unrealistic optimism”).

The premise of Nudge—the authors caution in their very first footnote that this is not to be read as noodge (noun: from the Yiddish, meaning, “You never call; you never write. …”)—is that in framing public policy, “choice architects” should gently guide us to make better choices, the sorts of choices Albert Einstein or Star Trek‘s Mr. Spock * might make or that we would make if we were to consult such men on our personal decisions about, say, giving up smoking. Laissez faire economics holds that faced with a broad menu of choices, most of us will choose wisely. Sunstein and Thaler fear that some of us might pull a Homer Simpson and try to eat the menu.

[Y]ou will not like the version of yourself you meet in Nudge. For one thing, you eat too many cashews, long after you stopped wanting one. (You will also eat squeaky, stale popcorn even if you hate it.) Problem blackjack players (like, er, myself) will play more recklessly with the “house money” you have just won. You are hopelessly enslaved to the judgments (even the wrong ones) of others. You believe everybody knows (and cares) which T-shirt you are wearing. You pay insane fees on your credit cards and don’t contribute to your 401(k) even though you know you should. You claim to want to be an organ donor yet somehow find checking the box on your driver’s license to be beyond you.

[I]s it oh-so-slightly creepy (or socialist) to envision a world in which shadowy choice architects are nudging you away from the cashews and toward organ donation? Could those seniors who understood all 46 options offered in President Bush’s prescription drug plan please raise their hands?

Nudging can take many forms, such as shaming us into reducing our intake of unhealthy sugar-water, eating too many cashews, or smoking.  But it can also involve turning up the heat for behaviors that society has already deemed bad, but for which change has been slow to come.  For example, when society universally agrees that driving slowly through a work zone is important to protect and safeguard the lives of workers, what is society to do when individuals ignore speed limits and imperil the lives of the workers?   Drivers speed through work zones for a host of reasons, but most of the time we do it because we don’t think we’ll get caught.  If we know with greater certainty that such “bad” behavior is likely to be detected and punished, and assuming the punishment is severe enough, the bad behavior miraculously stops.  When the cost of the adverse consequence exceeds the benefits of the bad behavior, behavioral change occurs.

This brings me full circle back to the environment and new developments at U.S. EPA in harnessing the power of these powerful new computers and “big data” to improve environmental performance, an initiative dubbed “Next Generation Compliance.”  EPA describes it this way,

Just as the Internet has transformed the way we communicate and  access information, advances in information and emissions monitoring technology are setting the stage for detection, processing and communication capabilities that can revolutionize environmental protection.  We are moving toward a world in which EPA, states,  citizens, and industry will have real-time electronic information regarding environmental conditions, emissions and compliance.  EPA is developing and implementing a new paradigm — “Next Generation Compliance” — that uses advances in both emissions monitoring and information technology, along with better designed rules, to improve environmental protection.

Now I could spend days talking about the bad environmental laws currently on the books, but the vast majority of environmental laws and regulations are needed and helping to protect not only our children but future generations from the bad decisions or ill-advised behaviors of this and successive generations.  And, in fact, there are better ways to protect the environment apart from top down government solutions, as I’ve discussed here and here.  But environmental laws, like so many other laws, are coercive and tell us what we can and cannot do.  If society has deemed such laws to be good and appropriate, what are we to do if such laws are ignored?  Well, there are several options – one, get rid of them if they are bad laws, two, ignore and pretend the noncompliance isn’t happening, or three, turn up the heat to achieve more compliance.  The threat of coercion is itself sometimes adequate to change behavior.

For those not following EPA’s trajectory, the agency has opted for the latter, concluding that many aren’t serious enough about compliance or they are moving too slowly toward the goal post.  We could spend many hours discussing why corporate entities don’t comply, but for the sake of brevity the reasons range from sheer ignorance of the law, ambiguous laws, or failure to recognize non-compliant behaviors to apathy or flouting of the law because they don’t ever expect to get caught.  Because EPA and the states do not have sufficient resources to enforce against all non-compliers, the agency has resorted to new tactics that I would describe as falling into the category of “Nudging” or threat of coercion.  These tactics include, among other things, using new technologies to detect fugitive emissions, posting performance data online (e.g. Environmental Compliance History Online) for the world to see, using “watch lists” of those who EPA believes are repeat or serious offenders, and using powerful new computers to sift through and crunch data to identify non-compliers.  I predict that we will eventually see a day that a state or EPA computer spits out a ticket that is mailed off to the offender for its noncompliance, similar to those automatic traffic ticket cameras.  Even OSHA, who has endured many generation of companies flouting worker safety laws, has resorted to regulating by shaming – nudging companies toward better behavior through public shaming.

These new tools and strategies, although by no means perfect – and certainly not immune to abuse – are intended to nudge us toward better behaviors and the common good.  As one of the conservative principles espoused by Rod Dreher, in his Crunch-Con manifesto, big business deserves as much skepticism as big government.  While some are highly skeptical of this new paradigm and new approaches, I’m one conservative who believes the long-term benefits will far outweigh the negatives.