Nudge stuff

I'm almost finished Nudge, which seems to be the policy wonk's Harry Potter this year. It's pretty good, though I am already familiar with quite a bit of the stuff in it. They do give a well-deserved plug to How We Know What Isn't So. What surprises me a bit is some of the negative reaction. Have a look at this bit on the Beeb website today. Especially this bit:

But Hazel Blears, communities secretary and former Labour Party chairman, told the BBC: "Every now and then a book pops up which everyone talks about for a while in the Westminster bubble: Freakonomics, The Wisdom of Crowds, The Tipping Point. Nudge is the latest fad.

"Each of these books may help us understand an issue or challenge us to think a little differently. But the harsh reality is that none can provide a blueprint for a better world. Politics is never that easy."

Eh? Where do we think the idea of auto-enrolment into Personal Accounts came from? And it was a big political decision to go for a quasi-compulsory approach. If you go and have a look at the White Paper launching Personal Accounts you can see several references to Thaler's work, and if I remember right it was also quoted in the Pensions Commission's reports. (Actually I think James 'bad photographer' Purnell may even have made this point).

I don't think behavioural economics is the be all and end all, and I wouldn't class myself as a libertarian paternalism, but this stuff can provide some useful insight for developing policy in a way that cuts with the grain of human behaviour. It would be a mistake to go cool on it just because the Tories are sniffing around.

Dan Le Sac vs Scoobius Pip said it right: Thou shalt not stop liking a band just because they become popular.