Posts Tagged ‘sunstein’

Nudge is a book which, in the 24 hours since I purchased it, has transformed how I think about the world. Co-authored by two University of Chicago professors, behavioral economist Richard Thaler and lawyer Cass Sunstein, Nudge brings a superb policy approach to the table. Although the name is unwieldy, “libertarian paternalism” has solved a major internal debate of mine.

Representative democracy is great. The devolution of power allows for freedoms which are often restricted in other forms of government. People’s ability to choose and influence government allows impersonal institutions to respond to personal needs. I’m a fervent believer in personal choice and support many civil libertarian causes.

At the same time, people can make some really dumb choices. Often, when I hear or witness some particularly uniformed opinions or decision, I’ll catch myself snottily thinking “…and these people get to vote? Great.” I’ll frequently voice support of a technocracy where the most skilled and brightest make decisions, insulated from the ignorant masses.

Yet, these two approaches are opposed to each other and I’ve struggled to make sense of my dual support. Luckily, Thaler and Sunstein have lent their considerable intellect to this problem and brought resolution in the form of libertarian paternalism which uses “architects of choice” to “nudge” people towards better decisions. The bad decisions people make are often the result of conditions outside their control: time restraints, financial limitations and a host of psychological phenomena which foster poor choices. Libertarian paternalism aims to create situations where it is easier to make the best choice while not limiting other options (as mandates would do).

Nudging recognizes that people respond to much more than incentives, as traditional economics would have you believe. Nudges recognize the complex array of options which make simple tax cuts or prison penalties unlikely to create the best outcomes. Nudges come down to designing systems which help people reach the best outcome. Full of examples, the book shows that seemingly innocent differences in order or defaults can have profound differences in outcomes.

Nudge is divided into three parts: an explanation of the theory, a series of policy recommendations, and responses to critics. The first portion is definitely my favorite as it lays the intellectual foundation for this idea which can play a part in many policy debates. Perhaps since I fall prey to a number of the blunders they outline (I’m young, I’ve got nothing to worry about!), I was not as enthralled with their discussions of how to improve credit markets or pharmaceutical plans, but I certainly hope that the right people do read those parts because the plans outlined to help millions are incredibly important additions to the national debate on issues as broad as environmental protection to investing to school choices.

Libertarian paternalism recognizes that humans are fallible and need help. It knows that experts have the experience to help. But it contrast to traditional paternalism, it recognizes the failings of government mandate and that knowledge is dispersed and people, if given appropriate settings, can make the best decisions for themselves.  So, allow me to nudge you towards their website or Amazon page where you can purchase it for yourself.

[Also by Sunstein is Infotopia.]

I’ve been on a National Geographic Magazine binge; so many of their feature articles are fascinating investigations of society through the lens of science, conservation or travel. One, entitled The Genius of Swarms, takes a look at the ability of certain groups to be smarter than their individual components.

“Ants aren’t smart,” Gordon says. “Ant colonies are.” A colony can solve problems unthinkable for individual ants, such as finding the shortest path to the best food source, allocating workers to different tasks, or defending a territory from neighbors. As individuals, ants might be tiny dummies, but as colonies they respond quickly and effectively to their environment. They do it with something called swarm intelligence.

The tendency manifests itself in diverse species who seem to act as one even though no one is giving orders.

Even with half a million ants, a colony functions just fine with no management at all—at least none that we would recognize. It relies instead upon countless interactions between individual ants, each of which is following simple rules of thumb. Scientists describe such a system as self-organizing.

Instead, ant colonies, caribou herds and bee hives all rely on the signals and actions of their peers. Relying on local information and simple principles, groups exhibit the capacity to solve complex problems.

Businesses and governments are taking note. Firms with complicated logistical challenges, say delivering expensive, flammable gas in the least expensive and safe manner, are learning from ants and reaping the rewards of facsimile. The military is having success with “Centibots project, an investigation to see if as many as a hundred robots could collaborate on a mission.”

Wikipedia, everyone’s favorite example, has used swarm intelligence to create a resource of immense value and seen through biological understandings, it is clear why principles like NPOV have come to be enshrined in Wikipedian policy: they are the simple rules of thumb which help shape collective action.

The NGM article is really only a small piece of the growing literature on what James Surowiecki calls the “Wisdom of the Crowds” and what Cass Sunstein investigated in “Infotopia.” I’d be interested in seeing some research into the methods of governance for swarms: although they are distributed actions, what are the norms and principles which govern them? How do these come into being? How are wild mobs without reason replaced by thoughtful decision-making groups? The article passes briefly over this,

Crowds tend to be wise only if individual members act responsibly and make their own decisions. A group won’t be smart if its members imitate one another, slavishly follow fads, or wait for someone to tell them what to do. When a group is being intelligent, whether it’s made up of ants or attorneys, it relies on its members to do their own part. For those of us who sometimes wonder if it’s really worth recycling that extra bottle to lighten our impact on the planet, the bottom line is that our actions matter, even if we don’t see how.

But the answer to avoiding fads or market bubbles remain elusive.

Harvard Law Professor Cass Sunstein has written a book whose brevity does little to indicate how much there is to take away from it. Infotopia is a short book which examines “how many minds produce knowledge” by comparing surveys, deliberation and markets. I feel a certain dishonesty in trying to summarize or critique such a cerebral book in a brief blog post, but I wanted to note some of his important points.

Sunstein’s work is an academic investigation of how the Internet allows projects like Wikipedia or Linux to succeed. Drawing on the scholarship of Friedrich Hayek and others, Sunstein notes the dispersed nature of knowledge. Starting with Hayek’s commentary that “Each member of society can have only a small fraction of the knowledge possessed by all, and each is therefore ignorant of most of the facts on which the working of society rests…” Sunstein analyzes three methods of decision-making: surveys, deliberation and markets.

Each method has its strengths and weaknesses which the author is quick to point out; in fact, his honesty in these appraisals is what makes the book so refreshing: as a book jacket quote from Robert Maccoun points out, Sunstein is “neither a Utopian nor a Luddite…”

For example, the average of everyone’s estimation of how many jelly beans are in a closed container is often the most accurate guess, but in cases where the answer is not binary, this may fail. Or, in deliberation, the supposed bedrock of democratic institutions, we are apt to see failure due to social pressures or exclusion of minority voices. Finally, the value of markets (especially prediction markets) is extolled - after all, people tend to only put their money where their mouth is if they are confident - but qualified by noting bubbles, biases and manipulation.

Infotopia has a lot to digest but will be a great resource to those designing or questioning communities online and societies off.