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Changing Behaviours. On the Rise of the Psychological State

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DOI: 10.4337/9780857936882

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Preface and Chapter 1, from:

Jones, Rhys, Pykett, Jessica and Whitehead, Mark (2013) Changing Behaviours. On the Rise of the
Psychological State. Edward Elgar, Cheltenham.

https://www.e-elgar.com/shop/changing-behaviours?___website=uk_warehouse

Hardback ISBN: 978 0 85793 687 5

Paperback ISBN: 978 1 78254 553 8

Ebook eISBN: 978 0 85793 688 2


Preface

The New Yorker Magazine recently reported on the emergence on a peculiar form of soda war in New

York City. The Talk of the Town article described Mayor Michael Bloomberg’s plans to ban the sale

of soft drinks in the city in portions that exceed 16 ounces (Surowiecki, 2012). While the soda (or

more specifically cola) wars of the past had been waged between competing corporate leviathans, the

battle lines in this carbonated conflict have been drawn between government and the private sector.

Bloomberg’s initiative has been developed in order to address the “super-size” culture that has seen a

rise in the number of people routinely drinking soda in 32-ounce portions, and the various public

health issues that are associated with this trend (including rising rates of obesity, heart disease and

diabetes). Bloomberg’s desire to “downsize supersize” has been criticized by some as just another

example of an overreaching, paternalistic state attempting to intervene within the everyday

consumption practices of its citizens. But what is easy to miss is that Bloomberg’s soda initiative

actually reflects a fundamental shift in the nature of public policy design. This shift in public policy

has been driven by the rising influence of psychology and related behavioural sciences within public

policy development. These changes in the nature of public policy have not been confined to New

York City, or even the USA, they are now an international phenomena shaping government policy

development France, the Netherlands, Argentina, Brazil, New Zealand, Germany, and the UK inter

alia. This volume takes a closer look at these policies, what they tell us about the changing nature of

government, and their implications for personal choice and freedom.

INSERT FIGURE 1.1 HERE

Figure 1.1. New York mayor Michael Bloomberg and deputy mayor for health Linda Gibbs, 30 May
2012 [Chang W. Lee/The New York Times via Redux]
So what is it that marks New York’s proposed soda policy out as a distinctive form of public policy?

The anti-supersize policy targets something called “default bias.” Default bias is a phenomenon that a

new generation of economists—who operate at the interface of economic analysis of psychology—

have been studying for sometime. The notion of default bias suggests that people do not make

economic choices that are based on perfect knowledge, sustained reflection, and rational calculation (a

model of economic decision making favoured by classical economists and referred to as the

rationality assumption). In the frenetic jostle of everyday life, people are much more likely to use

handy shortcuts in their decision-making. A default bias is a typical example of one such shortcut. A

default bias refers to the tendency of humans to be guided in their decision-making by preset choices

(such as automatic enrolled on a company pension scheme, or being charged on a particular tariff for

your domestic energy use). Default options are often followed because they require little effort on the

part of the individual and provide the reassuring sense that they reflect a “normal” choice to make.

Corporations have, of course, known for sometime about the power of default biases and have use

them to their advantage by pre-selecting choices that are not in the long-term interests of the

consumer, or upping insurance charges on renewal policies on the basis that many people will not

want the hassle of changing their provider. What Bloomberg’s supersize ban attempts to do is to

establish a new default within soda consumption (16 ounces) that is in the long-term health interest of

the consumer. This ban, does not prevent consumers buying 32 ounces of soda, it just means that they

will have purchase the soda in two smaller cups (which in itself reflects a psychological prompt to the

consumer that they are drinking more than a normal about of soft drink).

New York city’s proposed soda policy is more than simply a rejection of the assumption of

rational human behaviour that has informed previous social and economic policies. Bloomberg’s

supersize policy acknowledges the important role that emotions (or as some would term it

irrationality) play in human decision-making. When we use the term emotions we are referring to a
range of behavioural prompts that guide short and long-term decision-making, but which do not rely

on strategic deliberation. Emotional prompts to action can occur at both a conscious and sub-

conscious level and include the gut feelings of fear, joy, and uncertainty that guide automatic forms of

decision-making, or the routines of habit that may shape behaviours over a longer period of time. At

one level, emotionally based behaviours are a necessary and important part of the human decision-

making process: not all situations afford us the luxury of the time that is needed to think and

deliberate before we act. But in other situations emotionally based decision-making can have more

pernicious consequences. When emotions govern human behaviour there is a tendency for individuals

to misread signals and situations, and to favour short-term gain over long-term costs.

The role of emotions in human behaviour has become an increasingly important focus of

research within psychology, neuroscience and cognitive design (see Damasio, 1995; Du Plessis, 2011;

Norman, 1990). It has also been the foundation for a new discipline: behavioural economics.

Behavioural economics combines the study of economic decision-making with psychological work on

the nature of human behaviour (see Heukelom, 2011; Kahnemen et al 1982; Thaler and Sunstein,

2008). At the heart of behavioural economics is a desire to better understand the limits to human

rationality and how public policy can be designed in ways that recognized the emotional components

of human decision-making. Beyond academia, interest in the irrational nature of human decision-

making has been the subject of a range of popular books including Malcolm Gladwell’s Blink: The

Power of Thinking Without Thinking (2005); Akerlof and Shiller’s Animal Spirits: How Human

Psychology Drives the Economy, and Why it Matters for Capitalism (2010); and Dan Ariely’s

Predictably Irrational. The hidden forces that shape our decisions (2008). What unites all of this

work is not only a recognition of the more-than-rational component of human decision-making, but a

belief that this irrationality is not random and can be studied, analyzed and predicted. It is in this

context that what we term a Behaviour Change Agenda has gradually been emerging in countries

throughout the world. While diverse in its forms, the Behaviour Change Agenda utilizes these new

understanding of human conduct as a basis for public policy development.


The purpose of book is two-fold: first, to provide an analysis of the historical emergence of

the Behaviour Change Agenda, as both an intellectual project and basis for governing; and second,

through a series of case studies, to develop a critical analysis of this Agenda in practice.

In order to understand the full, and varied, nature of the Behaviour Change Agenda, it is

helpful to move beyond New York’s soda wars and consider its other manifestations around the

world. Let us start in the restaurants and bars of Buenos Aires. According to the World Health

Organization, on average Argentines currently consume somewhere in region of 3 times the

recommended daily maximum intake of salt in their diet (Garlow, 2011). Given the connection

between high levels of salt intake and hypertension and heart disease, the Ministry of Health for the

Buenos Aires province has recently reached an agreement with the Union of Tourism, Hotel and Food

Service Workers to remove salt shakes from the tables of the city’s restaurants. The idea behind this

initiative is to break the automatic habit that some people of have of unthinkingly adding salt to their

food. As with many current behaviour changing policies, Buenos Aires Ministry of Health’s initiative

does not ban the use of salt shakers: if asked, waiters and waitresses will provide customers with salt

dispensers. It is, however, hoped that in the act of having to ask for salt shakes dinners will become

more aware of their additional intake of salt, and be conscious of the fact that adding salt to a meal is

not a normal, or default practice. Making people more conscious of their automatic behavioural

responses to situations, and resetting social norms are both key features of the Behaviour Change

Agenda.

Let us now move from the bars of Buenos Aires to the autobahns of Germany. If you have

had the chance to drive along Germany’s autobahns recently, you will have come across a series of

posters that have been designed to promote safe driving by the Deutscher Verkehrssicherheitsrat (the

Germany Road Safety Council). The posters, which have been drawn by children, represent the loss

of loved family members to road traffic accidents (see imagine below). The posters cleverly asks

drivers if the disturbing image of the poster has distracted them, and encourages them to stop taking

unnecessary risks when they are traveling. Driving is, of course, a practice that is associated with a

range of irrational behaviours, including speeding and unnecessary aggression. But what makes this
poster campaign emblematic of the Behaviour Change Agenda is its use social marketing techniques.

Social marketing is a branch of the Behaviour Change Agenda that draws on the insights of

commercial marketing as a basis for promoting public policy goals. These roadside posters contrast

with the more prosaic signs, which inform drivers of the total numbers of accidents/fatalities on a

given road, because they deliver messages that are both socially relevant and emotive. As we move

through this volume, we will find that the Behaviour Change Agenda is marked by the increasing

incorporation of corporate techniques into the design of public policies.

INSERT FIGURE 2 HERE

Figure 1.2 A road safety sign in Germany [Photograph M. Whitehead]

The Behaviour Change Agenda also appears to be taking hold in France. The Prime Minster

of France’s Centre d’analyse stratégique has recently established a neurological unit to explore the

potential utility of behavioural and cognitive sciences in the design of government policy. On the

basis of its research on green nudges, the Centre d’analyse stratégique has recommended that utility

bills in France should enable consumers to compare their levels of energy use with other consumers

(Olivier and Sauneron, 2011). The thinking behind this policy is that it is often difficult to promote

greater efficiency in energy use among households because consumers have very little sense of

whether their existing energy use in high or low. Providing comparative energy use information on

utility bills acts as a prompt to behaviour change on two levels. First, it provides socially meaningful

information on which to base rational action on household energy use. Second, by generating peer-to-

peer comparison this information also provides an emotional prompt to energy conservation, as

feelings of comparative frugality or over consumption of energy stimulate changes energy practices.

The reframing of information in this way is also a distinguishing trait of the Behaviour Change

Agenda.
While acknowledging the international scope of the Behaviour Change Agenda, this volume

focuses on the development and implementation of behaviour changing policies in the United

Kingdom (hereafter UK). The insights of behavioural economics and psychology have been shaping

British public policy since the mid 1990s and throughout much of the New Labour administration

tenure in government. More recently, however, with the election of the Coalition government, the

Behaviour Change Agenda has risen in political prominence. With the establishment of the

Behavourial Insights Team in the Prime Ministers Strategy Unit, the Coalition government has been

exploring ways of mainstreaming the Behaviour Change Agenda in all public policy sectors. We

provide of a critical analysis of associated policies that considers their efficacy, ethical implications,

and impacts on levels of personal empowerment of among citizens.

The research presented in this book was gathered as part of three-year research project, which

ran from November 2008 until October 2011, and was funded by the Leverhulme Trust. This research

project explored the historical emergence of the Behaviour Change Agenda and its adoption within

the UK. As part of this research we interviewed approximately 40 policy-makers who were involved

in the development and delivery of behaviour changing policies. These interviews were conducted

with people who worked in the government, charitable and quasi-governmental sectors. In addition to

these interviews, we also observed specific cases of the implementation of the Behaviour Change

Agenda in the planning, environment, food and health sectors. In what follows, we reflect upon the

things that we discovered as part of this research. As each of us are geographers by academic training,

this volume does draw particular attention to the actual and potential impact of the Behaviour Change

Agenda on the design of the everyday spaces in which we live (including our homes, streets and

school canteens). Notwithstanding this, we feel that this book, as any study of the Behaviour Change

must be, is inter-disciplinary in scope. We thus hope that it will be of interest to urban planners,

nutritionists, psychologists, economists, neuroscientists, anthropologists, lawyers, and those who

study political power in its various manifestations. We also believe that it has some important things

to say to both to those policy-makers who are directly involved in the Behaviour Change Agenda and

the citizens who are becoming increasingly subject to its policy designs.
Chapter 1. Changing Behaviours and “New Models of Man”

“Civilization advances by extending the number of operations we can perform without thinking about

them.” (Alfred North Whitehead)

The study of human behaviour, and how it can be shaped, lies at the heart of myriad academic

disciplines and applied sciences. Economics, sociology, political science, psychology, neuroscience,

geography, anthropology, law, performance studies, philosophy, cognitive design and engineering,

and biology have all, to admittedly varying degrees, explored the causes of human conduct and how it

can be changed. While the accumulated wisdom of these collective arts and sciences of behaviour are

germane to the pursuits of this volume, our concerns are more specific. This book critically analyzes

an emerging approach to behavioural government. This is an approach that has risen to prominence

over the last twenty years. Inspired by developments in microeconomics and psychology, it has subtly

insinuated itself in public policy and state strategy throughout large parts of the world. Although it

goes by many names (including “The Behaviour Change Agenda,” Libertarian (or Soft) Paternalism,

and Intuitive Judgment Theory), and employs a wide range of techniques (including cognitive design,

choice editing, default setting, anchoring, peer-to-peer pressure, and norm formation), it is bound

together by a particular understanding of the human condition. This is a vision of the subject that

questions the “standard economic model” of motivation and decision-making and draws attention to

the irrational constitution of human life.

The standard economic model of human behaviour has its roots within both biology and

economics. Its biological foundations derive from the Darwinian construction of humans being

engaged in a constant game of survival. In this ultimate game humans become naturally ‘aggressive,

materialistic, utilitarian, and self interested’ (Rifkin, 2009: 1). The economic substrate of this
paradigm of human behaviour finds it origins in the classical economic tradition of Adam Smith and

his neoliberal heirs in the so-called Chicago School (see Hayek, 1960; 1944; and Friedman, 1982). At

the centre of this tradition stands the figure of Homo Economicus. Homo Economicus, or the

Economic Human, is an enduring model of human action within market-oriented societies. Homo

Economicus is characterized by rational acts of decision-making; wealth-seeking self-interest; and a

primary interest in the utility of goods, services and relations. 1 While only ever constituting an

approximation of human behaviour, Homo Economics has become a necessary myth for liberal

societies the world over. Its necessity derives from the fact that it promises a vision of a self-

regulating society within which personal freedom (that most valued of liberal objectives) provides the

basis for social development and stability.

Given its foundation within biological doctrine, and its evident complementarily with liberal

social norms, it is unsurprising the Homo Economicus provided such an enduring self-image for

human kind. The question is, of course, how such a powerful paradigm of humanity could be usurped.

The answer to this question can be found in real world events and more obscure developments in the

academic study of human decision-making. In terms of real world events, the past years have been

witness to a confluence of crises that have cast critical light on the standard economic model of

human decision-making. The emergence of climate change has brought into question the collective

decision-making that defines our relationship with the environments in which we live. The global

credit crunch has brought issues of personal debt and financial mismanagement into increasingly

1
For a more detailed analysis of the historical emergence of Homo Economicus see Perky

(1995). In his Ethology of Homo Economicus, Perky traces the figure back to 19th century

writings of John Stuart Mill. Interestingly, Persky notices a greater acknowledgement of the

irrational tendencies of Homo Economicus (particularly when it comes to procreation) in

Mills work than is often recognized today (1995: 223-224). Given the apparent

‘psychological complexity’ of Mill’s original Homo Economicus, Persky suggests that the

conflation of economic man with pure rationality is a more recent invention.


sharp focus (see Akerlof and Shiller, 2010). At the same time, rising rates of obesity and alcohol

related illnesses have lead to increasing levels of concern about the causes of over consumption and

lifestyle related disease. What appears to connect these interlocking crises of global environmental

change and personal welfare is the inability of people to act in their own, long-term best interests.

Homo Economicus would immediately change their greenhouse gas-inducing behaviours if the full

economic costs of near-future climate change were apparent to them. The Economic Human would

also avoid the accumulation of unserviceable debt because of its prohibitive long-term costs. Homo

Economicus would also, surely, watch their waistline, if only to preserve their wealth-making

physical capacity as far in to the future as possible.

The emergence of a post-standard economic model of human behaviour has not, however,

been caused by these collective crises (necessity is rarely the mother of intellectual invention). These

varied problems have simply provided the necessary conditions of existence within which pre-existing

academic ideas and philosophies have been able to flourish. Milton Friedman once observed that

‘[O]nly a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that

are taken depend on the ideas that are lying around’ (1982: viii-ix). By the turn of the new

millennium, the key ideas that were lying around (in relation to behavioural theory at least) had been

forged at the intersections of economics, psychology and neuroscience, and were deeply connected to

emerging discipline of behavioural economics (see Schüll and Zaloom, 2011; Sent, 2004). These

readily available ideas collectively questioned the rationality assumption of the standard economic

model and asserted the inherent irrational basis of much human decision-making.2 In terms of

behavioral economics, the irrational denotes the tendency of humans to make socio-economic

decisions that are not based on all of the available information (so called bounded rationality); tend to

favour immediate need and gratification over future planning (so called future bias); and tend to be

based on arbitrarily established habits of behaviour (so called imprinting).

2
Care must be taken in how we interpret the notion of irrationality here. Despite having obvious pejorative

connotations, we will argue throughout this volume that so called irrational (or emotional, pre-cognitive)

decision-making is a necessary and helpful driver of human behavior.


While such drivers of behaviour make little economic sense in classical terms, they are the

raison d’être of behavioural economics, behavioural psychology and neuroeconomics. Furthermore,

careful empirical studies (involving both the study of human decision-making in the real world and

the neural gaze of the brain-scanning equipment in the laboratory) have revealed that while these

patterns of behaviour are apparently irrational, they are far from random. It is the predictability of

human irrationality (Ariely, 2008) that has led to the gradual formation of new governmental

programmes that seek to guide and compensate for the behaviours of the sub-optimal citizen. Because

the use of standard economic models of human behaviour placed the ever-rational Homo Economicus

in the driving seat, it left little room (apart from the most rudimentary forms of market regulation) for

governmental intervention in the economic affairs of individuals. As human behaviour increasingly

becomes associated with a Homer Simpson style of decision-making, the scope for legitimate state

intervention into the details of our everyday life is expanding. The majority of this volume is

dedicated to a critical analysis of both the ethics and efficacy of the new forms of behavioural

government that are emerging in the wake of the real world events and philosophical developments

outlined above. We claim that, while rarely openly debated, such developments bring into to question

not only the nature of human subjectivity, but the constitutional fabric of political communities.

In attempting to understand how and why human nature is being actively remodeled within

behavioural sciences and government bureaucracies, it is important to trace in detail the history of the

ideas that have led us to this historical juncture in time. This process is particularly important, because

far from simply lying around, the ideas associated with prominent behavioural sciences have been

carefully developed and orchestrated to exploit this particular historical moment. Charting the history

of these processes of development and orchestration will enable us to not only to understand what the

key insights of the new Behaviour Change Agenda are, but also how these insights could lead to very

different political responses and programmes. This genealogical endeavour constitutes the main goal

of this Chapter.
From Boundless Rationality to the Limits of Choice: The Carnegie School and ‘old’ behavioural

economists.

1945 may seem like an unusual year to commence our genealogy of the behavioural school of

economics. The end of the Second World War is, after all, synonymous with the rise of a global

Keynesian model of government-backed economic development, nationalization, and financial

regulation. Yet amid the military and social turmoil of 1945 we find the genesis of the economic

principle that animates the contemporary behaviour change agenda. In his influential 1945 book on

human decision making and organization, Administrative Behaviour, the American economist 3

Herbert Simon made the analytical observation that,

‘[i]f there were no limits to human rationality administrative theory would be barren. It would

consist of a single precept: Always select that alternative, among those available, which will

lead to most complete achievement of your goals.’ (Simon, 1945: 240).

In addition to identifying a limit within the human ability to consistently rationalize, Simon

went on to state that,

3
It is actually quite difficult to classify the scholarly field that is most closely associated with Simon’s work.

His interests and writings span economics, psychology, computer science, political science and the philosophy

of science, inter alia. This is probably why in the preface to his 1957 book New Models of Man Simon observed

that ‘I am often complimented, sincerely I think, on the range of my dilettantism (Simon, 1957: vii).
‘The need for an administrative theory resides in the fact that there are practical limits to human

rationality, and that these limits are not static, but depend upon the organizational environment

in which the individual’s decision takes place.’ (ibid 240-241).

Simon would eventually extend his analysis of the more-than-rational constitution of

decision-making in organizational contexts to include the everyday conduct of individuals. In his

1957 book Models of Man Simon codified his approach in the term bounded rationality (Simon, 1957:

196). According to Simon, bounded rationality was an attempt to grapple with the fact that ‘[t]he

capacity of the human mind for formulating and solving complex problems is very small compared

with the size of the problems whose solution is required for objectively rational behaviour in the real

world […]’ (Ibid: 198). This, almost post-enlightenment, indictment of human intellectual capacity is

what led Simon to orchestrate an assault on the assumptions of classical economic theory.

The first key principle of bounded rationality is that in order to deal with their inability to

rationally process the full range of variables that operate in the world, human beings construct

simplified models, which enable them to make sense of the situations they find themselves in (ibid:

199). Simon acknowledged that humans would develop rationally conceived responses to their models

of the world, but he also recognized that because these models were not accurate reflections of reality

that human behavior would inevitably exhibit irrational tendencies (ibid). According to Simon, the

key goal of modern economics was to uncover the psychological process that underpinned and

undermined the simplified models we all construct of the world around us (ibid). The second key

principle of the theory of bounded rationality is the realization that imperfect models of the world

were not simply a product of our own psychological limitations, but were a consequence of the socio-

cultural and organizational settings within which we are located (ibid). This principle was important

to Simon because it suggested that bounded rationality was not just about the limited capacity of all

humans, but also the product of the people you know, the places you work, and the knowledge which

you are provided access to.


In order to understand the relationship between theories of bounded rationality and classical

economics (and more specifically the more recent neoliberal manifestations of the classical tradition)

in greater detail, it is necessary to explore the origins of Simon’s ideas. Herbert Simon’s work and

research was heavily influenced by the time he spent in and around the University of Chicago during

the 1930s and 1940s. Simon studied political sciences and economics at the University of Chicago

during the 1930s. In the 1940s, following a brief spell at the University of California, Berkeley,

Simon joined the staff at the Illinois Institute at Technology. It was during this time that he started to

attend the seminars convened by the Cowles Commission. The Cowles Commission for Research in

Economics (to give it its full title) was established by Alfred Cowles (a prominent American business

man) in 1932. The main objective of the Commission was to build connections between the

mathematical and economic sciences in order to enhance the ‘predictive power’ of business and

politicians over the market (see Peck, 2010: 93). Simon’s association with the Cowles Commission is

important not only because it casts light on the origins of his economics theories, but because also

because it provides important clues to his relationship to the emerging Chicago School of neoliberal

economic theory.

The historical and theoretical evidence would suggest that Simon’s work was antithetical to

the re-invented classical economic tradition of neoliberalism. Historically speaking, Simon’s

involvement with the Cowles Commission would have inevitably placed him, to some degree at least,

in opposition to the Chicago School. The 1940s was witness to an escalating intramural feud between

the so-called Cowlesmen and the Chicago Boys. The Chicago Boys, who were led by the neoliberal

vanguard of Friedrich von Hayek and Milton Friedman4, among others, were suspicious of the Cowles

4
It is interesting to speculate about the nature of the relationship between Herbert Simon and Milton Friedman.

While their respective theories of human decision-making and economics placed them on something of a

collision course, in his autobiography Simon notes that Milton Friedman and his family lived, for a time, in the

same apartment building on 57th Street as the Simon family (Simon, 1991, page 93). Perhaps unsurprisingly,

however, Freidman appears to have been reluctant to chair Simon’s prestigious Richard T. Ely Lecture (see

Sent, 2004, page 739).


Commission for two reasons (see Peck, 2010: 92-96). At the heart of these suspicions were technical

disputes over equilibrium modeling and, at a perhaps deeper level, concern with the

Keynesian/socialist affiliations of the Cowles Commission (ibid: 93). So severe were these intellectual

and interpersonal disputes that the Cowles Commission would eventually abandon Chicago:

relocating to the more supportive climes of Yale in 1955.

Even if we ignore the historical processes that would have Simon on collision course with the

doyens of American/Austrian neoliberalism, it is clear that in espousing bounded rationality that

Simon was challenging the theoretical ground upon which neo-classical economics had laid its

foundations. According to Simon, there were two visions of homo economicus that pervaded the

classical and neo-classical economic tradition: the consumer and the entrepreneur (Simon, 1957: 196).

On this basis the rationality assumption takes two forms. First, is the desire of the consumer to

maximize the utility of the varied goods and services they acquire (ibid: 197). Second, is the

unrelenting pursuit of profit that defines the rational actions of the entrepreneur. At the centre of

Simon’s theory of bounded rationality is a desire not only to extend and enrich the assumptions

associated with classical economics, but to change the very identity of the subject who is to be studied

within the economic tradition. In the place of the noble entrepreneur and astute consumer, we are

presented with the complex psychological motivations and flaws of “Real People” (see Jolls et al

2000).

Despite finding its origins in opposition to classical economic thought and the emerging

neoliberal tradition, care must be taken not to draw too strong a line of distinction between

behavioural economics and neoliberalism. As this book goes on to show, behavioural economics (and

the Behaviour Change policies it has given rise to) can take many different forms (see Jones et al

2010; 2011a; Whitehead et al 2011). In light of the fact that neoliberalism is also an inherently

protean process (Peck, 2010) it is inevitable that certain iterations of both lines of thought will find

themselves to be more or less compatible. Furthermore, it is clear that the radicalism of what Sent has

termed the Old Behavioural Economics (led by Simon) was to be significantly diminished within the

more conformist ideational programme of the New Behavioural Economics of the 1970s and 80s
(2004) (see following section). There is, however, another, more foundational reason for not

axiomatically placing (old) behavioural economics and the neo-classical tradition in antagonistic

isolation. Namely, that the irrationality principle proposed by Simon and embraced by behavioural

economics is not necessarily anathema to the neo-classical tradition. As Galeotti has pointed out, there

are clear connections to be made between Hayek’s notion of imperfect knowledge and human

limitation and Simon’s theory of bounded rationality (1992: 26). Foucault, reflecting on the work of

Gary Becker, also recognizes that Chicago School neoliberalism has always sought to encompass both

the rational and non-rational dimensions of human behaviour (Foucault, 2008: 267-271). It appears

then that neo-classical economics does not stand or fall the rationality principle. Indeed, in its reliance

on the notion of individual spontaneity and entrepreneurial creativity, it appears that the neoclassical

tradition relies on certain forms of irrational, non-conformist sparks to animate its project. In

recognizing the ambiguous relationships between irrationality and neoclassical economics we expose

a latent danger in Simon’s theory of bounded rationality (see here Marris, 1992). In establishing the

theory of bounded rationality Simon (perhaps inadvertently, although it would appear not)

unnecessarily tethered neoliberalism to a boundless vision of the scopes of rationality (ibid: 196-

204).5

Notwithstanding the overlaps that unite Simon and the neo-classical tradition, it is clear that

Simon’s irrationality principle leads in a very different political direction to Hayek’s notion of human

limitation. Reflecting on what he terms the Austrian (neoclassical) position (embodied in the work of

Hayek, but also Ludvig von Mises), Simon asserted that it was not an appreciation of the less-than-

rational nature of human action that divided his work from Hayek (Simon, 1992: 26-27). The

neoclassical school not only recognized, but valorized intuition and tacit understandings as key to the

effective functioning of markets (and in particular to effectively respond to changing market signals).

Rather, the division manifested itself in the different views which Simon and Hayek had on the extent

5
According to Marris, the neo-classical tradition does not so much posit a rationality principle, but seeks to

reveal the general forms of market equilibrium that allow for the establishment of the conditions under which

rational forms of behaviour would be encouraged (1992: 196).


to which the irrational/intuitive constitution of human action could be studied and understood. For the

neoclassicists, human economic intuition was unfathomable (at least in an aggregate sense) and this is

what made governments so ineffective in regulating markets. For Simon, however, the irrational

constitution of human behaviour was a legitimate object of empirical enquiry (indeed, it was a subject

which had occupied the minds of psychologists for many years). It was Simon’s belief in the

intellectual discernability of irrational action, which led to his assertion that such actions could be

effectively managed within variously scaled social organizations (from the corporation to the nation

state). This was, of course, antithetical to the individualizing doctrines associated with the

(anarcho)liberalism of the Austrian tradition.

In the context of these intellectual and political divisions it is likely that Simon felt increasingly

ostracized from the dominant intellectual streams that were starting to consolidate in and around the

University of Chicago. In 1949 Herbert Simon left Chicago for Pittsburgh to become Professor of

Administrations and Chair of the Department of Industrial Management at Carnegie Tech (later to

become Carnegie Mellon University) (Simon, 1991). It was during his time in Pittsburgh that Herbert

Simon contributed to the formation of the Carnegie School of economics and human decision-making.

Working alongside academics such as Richard Cyert, James March, Victor Vroom and Oliver

Williamson, the Carnegie School provided a supportive intellectual environment within which

Simon’s desire to mix economics and psychology was not viewed with suspicion, and his desire to

better understand the role of the organization in framing human behavior was encouraged. And so it

was that in the safe haven of Pittsburgh the Carnegie School provided the first home for the fledgling

discipline of behavioural economics. While the Carnegie School and their behavioural theories

developed in isolated parallel to the Chicago School, it was of course the Chicago School that would

rise to prominence first. During the 1970s it was the neoclassicists from Illinois who appeared to have

the answers to the stagflation crisis and gained political favour within the Pinochet, Reagan and

Thatcher administrations. The Carnegie Schools moment was still to come.


New Behavioural Economics: From Heuristics to General Motors.

It could be argued that the most lasting contribution of Simon, and the Carnegie School, was

to establish a legitimate common ground between economics and psychology. Notwithstanding this,

Simon felt compelled in the 1970s to leave his post in what was then the Graduate School of

Industrial Administration (see Sent, 2004: 742), to join the Carnegie’s Psychology Department

(Simon, 1991: 385). But at around the same time a new generation of psychologists would play an

increasingly significant role in the discipline of economics. Esther-Mirjam Sent (2004) has described

this generation as the New Behavioural Economists. While the newness of this intellectual wave in

part denotes its institutional separation from Simon and the Carnegie School, for Sent it is also reflects

key intellectual distinctions between the two groups.

Two figures have, arguably, helped to shape and define the New Behavourial Economics

more than any others. Amos Tversky was a cognitive psychologist who was born in Haifa (Israel) and

obtained a PhD in psychology from the University of Michigan in 1964. Daniel Kahneman is also an

Israeli-born psychologist who obtained his PhD in psychology from the University of California at

Berkley in 1961. Working together in the early 1970s, Kahneman and Tversky sought to bring the

insights associated with the psychological study of human bias and heuristics into economic studies of

the human decision-making process.6 Kahneman and Tversky utilized notions of bias and heuristics to

analyze how individuals make judgments under conditions of constrained time and uncertainty. At the

heart of Kahneman and Tversky’s work was an attempt to uncover the particular processes which

limited individual’s rational capacity, and to determine whether there were patterns associated with

bounded rationality. While explicitly building on the earlier work of Simon, Tversky and Kahneman

6
According to Kahneman, his collaborations with Tversky can be traced back to 1969, when he invited Tversky

to the Department of Psychology, at the Hebrew University of Jerusalem, to deliver a seminar on the intuitive

nature of statistical knowledge. Convening later in the Café Rimon, they devised a study of intuitive statistics

that would lay the foundation for the ongoing collaborations (see Kahneman, 2012: 5).
combined research into the psychology of human decision-making with a more specific concern with

the statistical parameters of judgments. In an influential article that first appeared in the journal

Science in 1974, Tversky and Kahneman outlined what they saw to be the cognitive bases upon which

bias and misassumption enter human decision-making (see Tversky and Kahneman, 1974; see also

Kahneman et al 1982). They essentially argued that consistent errors emerged in human decision-

making on the basis of the heuristics (or shortcuts), which we all deploy to try and make sense of the

complex, uncertain, real world situations we encounter.

At one level, Kahneman and Tvesky connect what they term naïve judgments with the routine

misinterpretation of representativeness and associated causal relations (Kahneman et al., 1982: 5-8,

Tversky and Kahneman, 1974). Accordingly, they argue that the representativeness heuristic works

on the basis that people use a given indicator as a predictor of a given outcome on the basis that the

indicator resembles the outcome. They go on to discuss the example of how people arbitrarily connect

traits of personality (indictor) to occupation (outcome) (using the example of the stereotypical

depictions of the librarian as introverted, meek and tidy; and a salesperson as extrovert, charismatic

and charming) (ibid: 5). Despite the obvious limitations of such indicators as bases of prediction, they

tend to be used by humans as ready-to-hand, shortcuts for us to make a range of everyday judgments.

In deciding the likelihood of whether a given person is a librarian or a salesman (to use Kahneman et

al’s example), it would be more pertinent to assess the base-rate levels of the total number of people

who are employed in these respective occupations than the personality traits of individual people (i.e.

there is a much greater statistical chance of someone being a salesperson in the UK today than being a

librarian) (ibid). Of course, such base-rate figures (as with so much relevant decision-making data) are

rarely ready-to-hand when they are needed: hence the recourse to the so-called representative

heuristic.

Kahneman et al go on to outline a whole series of limitations that are associated with the input

information people rely upon when making a range judgment calls (these include misconception of

the nature of chance, illusions of validity generated by the arbitrary formation of patterns in available

data, anchoring produced by the nature of the data that frame a decision, and the availability heuristic,
which relates to the retrievability of experiential data which may be perceived to have relevance for a

particular judgment (1982: 4-20). What is, perhaps, most important about Tversky and Kahneman’s

analysis is that they suggest that naïve judgments persist even when people (including professional

statisticians) are aware of the irrational flaws that inform their decisions. This is, of course, because

numerous decisions still have to be made, and heuristic shortcuts (no matter how bias laden they may

be) are a useful survival tactic for us all. This is also because statistical rules tend not to be learned on

the basis of everyday life and experience: they originate from a different sphere of human

contemplation and analysis. (ibid: 18) (see also Kahenman, 2012).

The question remains, however, as to why Tversky and Kahneman, and the many others who

built on their insights, are different from the old behavioural economics of the Carnegie School. Sent

observes that ‘Kahneman and Tversky started from the rationality assumption that has characterized

mainstream economics and next analyzed departures from this yardstick, as opposed to developing a

new one’ (2004: 743). Consequently, while recognizing bounded rationality as a necessary condition

of human decision-making, Kahneman and Tversky continued to discern an essentially rational basis

to human decisions. On these terms, heuristics and biases are not so much emotional aberrations, but

relatively predictable errors in attempts to make rational judgments under suboptimal conditions.

While Kahneman and Tversky’s position was still, in some ways, at odds with neoliberal assumptions

about the extent to which everyday, intuitive decision-making could be known, it was still a

perspective on human decision-making which could be more easily reconciled with mainstream

economics (see also Camerer, 1999). To these ends, while Simon and the Carnegie school attempted

to move the subject of economic enquiry into a psychological frame of analysis, Tversky and

Kahneman sought to bring psychological tools of analysis to the mainstream study of the rational

economic subject. On these terms Tversky and Kahneman’s work embodies a normative assumption

of rationality that: 1) suggests that rational courses of action can be identified (although it is not clear

by whom); 2) legitimates intervention in irrational forms of action; and 3) resuscitates the figure of

Homo Economicus (if not as a reflection of actual human behaviour, then still as the paradigmatic

goal)
Kahneman and Tversky’s ability to construct a more reformist union of psychology and

economic provided the intellectual bases upon which behavioural economics could flourish and grow.

The institutional, and financial support, needed for the development of new behavioural economics

would, however, come from another source (see Laibson and Zeckhasuer, 1998). The initial support

of the Alfred P. Sloan Foundation (from 1984 to 1989), and the subsequent establishment of Russell

Sage Foundation’s behavioural economics programming (1986-1992) were crucial in the

establishment of behavioural economics as a (sub)disciplinary enterprise (see Heukelom, 2011). The

so-called Sloan-Sage programme was held together and orchestrated by Eric Wanner. Wanner was a

psychologist who studied at the Center for Cognitive Studies at Harvard University (ibid: 5). The

Harvard Center for Cognitive studies was an interdisciplinary research centre established in the 1960s

which was devoted to studying the mind, and included among its interlocutors Daniel Kahneman and

Herbert Simon (ibid). Wanner’s work developing a Cognitive Science book series for Harvard

University Press enabled him to get to know both Kahneman and Tversky (who were on the Cognitive

Science Book Series Advisory Board) (ibid). In 1982 Wanner joined the Sloan Foundation and

assumed responsibility for its cognitive science program. The Sloan Foundation had been established

in 1934 at the behest of Alfred. P Sloan Jnr, who was at that time President and CEO of General

Motors, in order to support economic research. 7 It is perhaps unsurprising, given his exposure to the

work of Kahneman and Tversky, that not long after joining the foundation Wanner should suggest the

establishment of a new research programme on decision theory (ibid: 12). Ultimately, Wanner’s new

research programme would be called the Behavioural Economics Program. While mobilizing the idea

of behavioural economics that had first been coined by Herbert Simon, the Sloan Foundation’s

programme was more concerned with supporting the kind of work on the predictable irrationality

associated with human behaviour (envisaged by Kahneman and Tversky) than the more radical

approach to human decision-making proposed by Simon (ibid: 18). While the Sloan Foundation’s

financial support for research in behavioural science was relatively modest, Heukelom (2011) claims

7
Since its inception, the Alfred P Sloan Foundation has had a commitment to supporting research in science,

technology and economics that will potentially result in benefits to social wellbeing.
that by bringing like-minded psychologists together, and supporting related conferences and

symposia, the Foundation had a crucial role in generating a sense of disciplinary identity and mission

among the behavioural economist community.

In 1986 Wanner left the Alfred P. Sloan Foundation to become President of the Russell Sage

Foundation (ibid). The Russell Sage Foundation was established in 1907 by Margaret Olivia Sage,

with the mission to improve ‘[t]he social and living conditions in the United States’ (Russell Sage

Foundation, 2011). While much of its early work was devoted to mapping and analyzing urban

poverty, in the post second world war period it developed a broader mandate: supporting the work of

social scientists in the study of the social problems and the development of social policy. Concerned

that his departure from the Sloan Foundation would result in the demise of the Behavioral Economics

Program, Wanner set about convincing the board of trustees at Russell Sage to incorporate the

programme into its own research portfolio. What ultimately emerged was an integrated behavioural

economics research programme, which was funded through both the Sloan and Russell Sage

Foundation, and whose advisory committee was comprised of a mix of economists and psychologists

(ibid: 25). The support of the Russell Sage Foundation was important not only because it extended

and increased the amount of funding that was available to explicitly support the research of

behavioural economics, but also it provided a series of mechanisms in and through which the

fledgling sub-discipline could take shape. Visiting scholars working within the Russell Sage

Foundation’s Behavioural Economics Program would spend time meeting and collaborating at the

Foundation’s head quarters in New York City (ibid: 29). The Foundation also supported the

establishment of a Behavioural Economics books series. Finally, the Russell Sage Foundation formed

the Behavioral Economics Roundtable (comprised of former recipients of Foundation funding for

research in Behavioral Economics) (ibid: 31). The Behavioral Economics Roundtable exists to this

day, and supports behavioural economics through its Summer Institute, where graduate students and

junior academic staff (also known as “campers”) learn the rudiments of the sub-discipline (see Sent:

744).
What we essentially see emerging during the 1970s and 1980s is a brand of behavioural

economics that was able to win far more attention from the economic mainstream than its previous

incarnation. The new behavioural economists were also able to gain key institutional support and

sustenance from influential foundations. It is difficult to assess the impacts, if any, that the financial

support that behavioural economics received from prominent foundations had on the nature of the

nascent discipline. Between the support of General Motors and the Russell Sage Foundation, it

certainly unfair to suggest that the discipline was either a slave to corporate interests, or a weapon for

more progressive policy designs. It is, however, important to note that the type of behavioral

economics that would ultimately gain a foothold in the academic establishment approached questions

of bounded rationality, and the problems of the neoclassical rationality assumption, not as a basis for a

radical rethinking of the human subject, but as a call to rationalize the irrational exuberances of

humankind. We will see, as we move through this volume, that the desire to rationalize the irrational

has become a defining characteristic of the Behaviour Change policy agenda. We will also see that

this normative desire for correctional re-rationalization has raised a series of ethical issues, and

resulted in a number of missed opportunities, within the design of behaviour changing policies.

Pop-psychology and the Design of Everyday Things: From Hare Krishna to Apple

The emergence of behavioural economics fused together the research of economics and

psychologists in ways that enabled human decision-making to be conceived of in more complex and

variable ways. What was not forthcoming, at least initially, from behavioural economics was a clear

sense of how the problems associated with bounded rationality could be acted upon and remedied.

The answer to this question would emerge out of separate, but interconnected, sets of developments

within studies of the psychologies of marketing and cognitive design.

In many ways, a sense of the bounded rationality of individual consumers has been an

intuitive operating principle of the marketing sector since it inception. The ability of advertisers to tap
into people’s irrational desires and unerring need for short-term gratification is central to the

processes in and through which people buy things that they do not actually need and commodity

markets continue to expand. In 1957, Vance Packard’s The Hidden Persuaders exposed the ways in

which the corporate community was seeking to manipulate the decisions and lifestyles of the

consumer society (see also Frank, 1997: 40-41; Twitchell, 1996). During the 1980s social

psychologists increasingly sought to uncover the psychological principles that underpinned hidden

forms of persuasion. This research process was, in part, designed to enable people to recognize when

they were being subconsciously persuaded, but it also sought to enable techniques of persuasion to

become accessible to those who did not work on Madison Avenue or for Saatchi and Saatchi. A key

figure is this process was Robert B. Cialdini. Cialdini was the W.P. Carey Distinguished Professor of

Marketing and Reagent’s Professor of Psychology at Arizona State University. 8 During the 1970s and

80s Cialdini studied the operational practices of what he terms compliance professionals (2007: xii).

Compliance professionals are a cadre of individuals ranging from car dealers to encyclopedia

salespeople, who are particularly skilled in shaping and manipulating the decision-making of others.

Cialdini responded to a series of newspaper advertisements for work within compliance industries, in

order to receive training in the commercial arts of persuasion. On the basis of his covert participant

observations, in 1984 Cialdini published his now famous book Influence: The Psychology of

Persuasion (Cialdini, 2007).

At the centre of Cialdini study of influence, was the same (if unnamed) concern with the

bounded limitations of human rationality. Cialdini thus observers,

‘We can’t be expected to recognize and analyze all of the aspects of each person, event, and

situation we encounter in even one day. We haven’t the time, energy, or capacity for it. Instead,

we must very often use our stereotypes, our rules of thumb to classify things according to a few

8
As we will see in the next Chapter, Cialdini is also now an advisor to the UK Coalition Government on

behaviour change policy development.


key features and then to respond mindlessly when one or another of these trigger features is

present’ (ibid: 7).

Although Cialdini does not draw on the work of Kahnman and Tversky, their heuristics and

biases are clearly present in Cialdini’s view of everyday human decision-making. Cialdini does,

however, diverge from the new behavioural economists to the extent that he does not seek to correct

the rational frailties of human behaviour, but to exploit them in order to produce capacities of

influence. Drawing on studies of animal behaviour, mass suicide events, and even the fund-raising

practices of the Hare Krishna Society, Cialdini exposes the so-called trigger features, which tend to

produce certain degrees of unthinking compliance within us all. Trigger process range from the desire

to reciprocate a social gift, the inherent likability of something or someone, or the inbuilt desire to

establish systems of personal commitment to objects and people. What connects all of these triggers of

influence, and actually makes them so effective, is that are able to ‘manipulate without the appearance

of manipulation’ (ibid: 31). Ultimately, the work of Cialdini remains significant today because of the

way in which it illustrated how the accumulated knowledge of marketing psychology could be utilized

to serve the commercial and non-commercial agendas of individuals and collective bodies. In other

words, it paved the way for a more generalized deployment of behaviour changing techniques within

both the private and public sectors.

A second set of developments, which also crystallize in the 1980s and 90s, suggested

potential strategies for remedying bounded rationality. Cognitive design or engineering is concerned

with the ways in which decision-making is framed by the ergonomic environments and system within

which we live out of daily lives. A strong driving force behind cognitive design and engineering is the

realization that much of the objects, technologies, and devices that infuse our worlds have been

designed with the requirements of the production process and not the end-user in mind. The

prominent cognitive engineer Donald Norman whimsically explains things this way,
‘If I was placed in the cockpit of a modern jet airliner, my inability to perform gracefully and

smoothly would neither surprise nor bother me. But I shouldn’t have trouble with doors and

switches, water faucets and stoves. “Doors?” I can hear the reader saying, “you have trouble

with opening doors?” Yes. I push doors that are meant to be pulled, pull doors that are meant to

be pushed, and walk into doors that should be slid.’ (Norman, 1988: 2-3).

Donald Norman is arguably the highest profile advocate of cognitively oriented design and

engineering. Norman’s academic background spans electrical engineering, computer science and

cognitive studies. In addition to an academic career that has included time at the Harvard University,

the University of California, San Diago and Northwestern University, Norman has also been Head of

the Advanced Technology Group at Apple and worked for Hewlett Packard. Norman’s attempts to

humanize design were distilled in his book The Design of Everyday Things (Norman, 1990; see also

Norman, 2007).9 In this classic text, Norman builds directly on Kahnemen of Tversky’s analysis of

bias and errors. Norman does not, however, conceive of bounded rationality in relation to the

computational limitations of the human condition, but instead focuses his attention on the ways in

which irrationality is produced at the interface of human cognition and our everyday environments.

Norman takes as his focus the design of the approximately 20,000 everyday things that surround us on

a daily basis (1990: 11). These objects range from thermostats to computers, and from clocks to

ovens. Human error, according to Norman, is often not an unpredictable accident, but the product of

the naïve physics through which we tend to construct the world, and the related design features of

everyday life (ibid: 36-38).

Norman describes naïve physics as the heuristic assumptions we routinely make about how

things around us work. While often very inaccurate, such naïve assumptions generally enable us to

make our way successfully through the ever-complex technological worlds in which we live, without

9
The Design of Everyday things was originally published in 1988 under the title The Psychology of Everyday

Things (Basic Books).


the need for an advanced degree in computer science or physics (see also here Norman, 2011). Errors

tend to proliferate when our intuitive, shorthand assumptions about the operational dynamics of

objects actually get in the way of us using them effectively and efficiently. A classical example of this

is people’s misunderstanding of how thermostats work. According to Norman, people often tend to

assume that a thermostat controls the amount of heat that emanates from an appliance (Norman, 1990:

38-39). Consequently, if you want to heat a room quickly, you set the thermostat at a high level to

speed-up the warming process. Of course, thermostats are binary devices, which simply switch on and

off according to whether a pre-set temperature has been achieved: setting the thermostat to high level

does not increase the speed with which a room reaches a desired temperature, it merely means that the

room will eventually reach a higher temperature than that which is desired. The design issue

associated with devices like thermostats is that they do not provide users with ergonomic clues to their

true nature (ibid). Many everyday devices thus contribute to a kind of environmental limitation of

human rationality.

The key implication of research within cognitive engineering has been an increasing

recognition that the limitations of the rationality assumption are not merely the product of a lack of

human rational capacity. Cognitive engineering and design has helped to uncover the irrational push

of the world around us. The partial relocation of error formation from human cognition and into the

environments that surround us has had an enduring impact on the nature of behaviour change policy

(see Chapter 2). Prime among these has been the emergence of the ‘environment’ as a site and focus

of governmental intervention into human behaviour. Crucially, as we will go on to see, this shift

towards environmentally oriented behavioural policy has enabled governmental authorities to partially

circumvent the ethical concerns that have been raised in opposition to the behaviour change agenda.

Nudge and the Soft Paternalist Revolution


We have seen that the new behaviour change agenda finds its origins in the 1940s and 50s

with the work of Herbert Simon. It came to maturity during the 1970s and 80s with the rise of the new

behavourial economists. It then found increasingly practical forms of application through the work of

behavioural psychologists and cognitive engineers. It was not, however, until the turn of the

millennium that the assiduous work of behavioral economists finally achieved political recognition

and influence. A key figure in the political ascent of the behaviour change agenda has been Richard

Thaler. Thaler’s 2008 book Nudge: Improving Decisions About Health, Wealth and Happiness (co-

written with Cass Sunstein) is, without doubt, the most prominent codification of new behavioural

economics. As a volume it has both raised the political profile of behavioural economics and made the

broader behaviour change agenda a significant issue of public debate. So how do Richard Thaler and

Nudge fit into the historical narrative of the behaviour change agenda?

The story of Nudge actually takes us right back to where our story began: Chicago. Richard

Thaler is Professor of Behavioural Science Economics and Economics at Chicago University. His

association with the New Behavioural Economists goes back to the early 1980s. It was at this point

that a young Thaler started to engage with the work of Kahneman and Tversky (Heukelom, 2011).

Thaler was, in many ways, one of the first generation of young economists to emerge out of the new

behavioural tradition. It was in this context that Thaler become involved in the early meetings

between Wanner, Kahneman and Tversky as the first attempts were made to form the Sloan

Foundations Behavioural Economics Programme (ibid: 13). Thaler was actually the first recipient of a

Sloan Foundation grant support in the field of behavioural economics: his 1983 application to the

Foundation funded a sabbatical he would spend in British Columbia with Kahneman (ibid). Following

this collaboration with Kahneman, Thaler went on to play a crucial role in administering the Sloan

Foundation’s Behavioural Economics programme, before leading the Russell Sage Foundation’s

Behavourial Approaches to Financial Markets research group (with Robert Schiller) (ibid). Thaler

would have the further distinction of being the author of the first volume published as part of the

Russell Sage Foundation’s Behavioural Economics Book Series (his 1991 Quasi-Rational

Economics).
An appreciation of Thaler’s strong academic, personal and institutional connections with New

Behavioural Economics is a crucial starting point to understanding the form and purpose of Nudge.

On the basis of his intellectual collaboration with his fellow Chicagoan Cass Sunstein (of the

University of Chicago Law School), Nudge encapsulates the essence of new behavioural economics.

Furthermore, by drawing on the insights of Robert Cialdini and Donald Norman (Norman actually

provides a glowing endorsement on the dust-jacket of the 2008 edition of the book), Nudge outlines

the practical steps, and politically acceptable grounds, upon which the ideas associated with the new

behavioural economics can be put to use.

The central philosophy behind Thaler and Sunstein’s notion of nudge is that of libertarian (or

soft) paternalism. This seemingly oxymoronic notion is important for two reasons: 1) because it

embraces the insights of marketing psychology that it is possible to influence people into making

favourable decisions without having to coerce them (thus maintaining a libertarian feel); and 2) in

drawing on the insights of varied studies within behavioural economy, it recognizes the barriers that

exist to rational human decision-making (thus suggesting the need for some form of paternalistic

intervention on behalf of the state or non-governmental organizations). While criticized by some for

not being able to live up to either its libertarian or paternalist credentials (Mitchell, 2005), Thaler and

Sunstein’s positioning of nudge has enabled them to achieve a certain degree of support from across

the political spectrum. They thus reflect,

‘[l]ibertarian paternalism is neither left or right, neither democrat nor republican. In many areas,

the most thoughtful Democrats are going beyond their enthusiasm for choice-eliminating

programs. In many areas, the most thoughtful Republicans are abandoning their knee-jerk

opposition to constructive governmental initiatives’ (Thaler and Sunstein, 2008: 14).

As we will see in Chapter 2, the bi-partisan appeal of libertarian paternalism has been

confirmed in the UK where it has gained support from the New Labour and subsequent Conservative

lead Coalition governments.


The operationalization of libertarian paternalist policies requires interventions in the choice

architectures (or environments) within which humans live out their lives. According the Thaler and

Sunstein, choice architectures are the varied physical, socio-cultural, and administrative environments

within which decision-making is framed (see Thaler et al 2010). A central tenet of their argument is

that the choice environments that presently surround us are not neutral, or indeed accidental,

outcomes of the evolution of society: they have been designed by commercial and at times (non-

commercial) forces in ways that make it very difficult to make choices that serve our long term

interests. From the school canteen that subliminally promotes unhealthy eating practices, to the

complex and off-putting forms that make taking out a pension plan unattractive, Thaler and Sunstein

argue that many of our choice environments require some form of rationalized re-design. Out of

Thaler and Sunstein’s concern with choice environments emerges the figure of the choice architect,

who is called to be the agent of design-led social change,

‘If you design the ballot voters use to choose candidates, you are a choice architect. If you are

a doctor and must describe the alternative treatments available to a patient, you are a choice

architect. If you design the form that new employees fill out to enroll on the company health

care plan, you are a choice architect. If you are a parent, describing possible educational options

to your son or daughter, you are a choice architect. (ibid: 3).

The question of course still remains that if choice architects are the harbingers of a new

paternalistic society, how can the libertarian commitment to free choice to be preserved?

Thaler and Sunstein suggest that the effective blending of libertarian and paternalistic ideals

within the design (and redesign) of choice architectures can be secured through a particular technique:

the nudge. Drawing directly on the insights of cognitive design and behavioural psychology, the

nudge seeks to act on predictable forms of irrational bias and error through forms of non-coercive

suggestion. For Thaler and Sunstein then the nudge is,


‘[a]ny aspect of the choice architecture that alters people’s behaviour in a predictable way

without forbidding options or significantly changing their economic incentives. To count as a

mere nudge, the intervention must be easy or cheap to avoid. Nudges are not mandates. Putting

the fruit at eye level counts as a nudge. Banning junk food does not’ (ibid: 6).

Perhaps the most discussed, and certainly bizarre, example of a nudge was developed in the

toilet cubicle of Schiphol Airport. In 2005, maintenance crews experimented with the design of the

urinals that were being used in the airport. They found by simply placing the image of a black

housefly inside the urinal that they could improve the accuracy of urination and save cleaning costs in

the process (this technique has now apparently been adopted in the John F. Kennedy International

Airport in New York). This design intervention is a classic nudge (and is even described as one by

Thaler and Sunstein, 2008: 4) because it encourages men to practice a socially beneficial practice

(through appeal to their automatic brain functions and sense of fun, as opposed to a rationally

constructed argument), but is non-compulsive (there is no costs to the individual should they wish to

return to their previous toiletry habits).

Arguably the most controversial application of nudging techniques has been in the field of

organ donation (see Jones at al 2011). In many ways organ donation is one the most directly relevant

policy areas for the application of nudging techniques. Surveys illustrate that far more people declare

a preference for donating their organs after death than actually sign onto organ donation registers.

While the reasons for this disparity are complex (relating in part, no doubt, to the people’s desire to

avoid thinking about their death and what might subsequently happen to their internal organs), it is

clear that given people’s declared preference to donate, that nudging could potentially make the

process easier (Thaler and Sunstein, 2008: 175-182). Most nudging strategies that have been designed

in relation to the issue of organ donation have sought to address the question of default positioning.

Defaults relate to presumed categories within which choices are positioned. In relation to organ

donation the default position is ordinarily set so that it is assumed we do not wish to donate our organs
unless we explicitly opt-onto formal registers. One form of nudge could involve changing the default

to presumed consent, with an opt-out clause should people wish to be taken-off donation registers. In

relation to organ donation, presumed consent naturally raises significant ethical questions concerning

people’s rights to control what happens to their own bodies when they are ignorant of the presumed

consent setting associated with organ donation. In Nudge, Thaler and Sunstein discuss the value of

mandated choice strategies, which rather than pre-setting a default position require people to make a

choice about organ donation in the process of, say, renewing their driving license (a process that seeks

to overcome the forces of inertia that simply stop people getting around to taking even a preferred

action) (ibid: 83-87).10

It is very easy to miss the broader political and philosophical implications of Thaler and

Sunstein’s ideas. Through the association it creates between choice and freedom, and its focus on

environments rather than individuals, the notion of libertarian paternalism (and the associated

techniques of nudge) is able to reframe the historical limitations which have been placed on the role of

government in everyday life. The historical principle that is partially overwritten here is the classical

formulation of liberal society, which was famously established by the nineteenth century British

philosopher John Stuart Mill. Mill asserted that the only time that:

‘[p]ower can be rightfully exercised over any member of a civilized community, against his

[sic] will, is to the prevent harm to others. His own good, either physical or moral, is not a

sufficient warrant’ (Mill, 1985: 68).

10
It is interesting to note that in the UK a system of “prompted choice” has now been introduced in relation to

signing onto the Organ Donor Register. Consequently when people now apply for or renew their driving

licenses that are asked whether they would like to sign onto the register and which organs and tissues they

would be willing to donate. Prompted choice is seen to be more libertarian than mandated choices because it

does not make people make a decision.


Libertarian paternalism challenges the “harm to others” principle on the basis that it may now

be possible to intervene within an individual’s personal dealings without eroding their liberty (so long

as choice is preserved), and that in many instances the reframing of choice environments actually

enhances freedoms of choice (see here Pykett et al., 2011). It is on this basis that behaviour change

policies have increasingly been able to shift focus from harm-to-others issue, such as environmental

pollution and social order, to harm-to-self matters, including healthy eating, sexual conduct and

financial planning.

*****

An interesting post-script to the emergence of the Behaviour Change Agenda outlined in this

Chapter, has been the support that this programme has been receiving from the cognitive and

neurological sciences (see Schüll and Zaloom, 2011; Damasio, 1995; Le Doux, 1996). Recent studies

within the cognitive sciences, and developments within brain scanning and imaging technology, have

enabled ever-more elaborate scientific studies to be carried out into the emotional and more-than-

rational dimensions of human decision-making. In addition to providing a scientific basis for

understanding the empirical research of behavioural economists, such developments have also seen

the establishment of the new subdiscipline of neuroeconomics.

We explore the insights and implications of developments within the cognitive and

neurological sciences at various points in this volume. At this point, however, it is just important to

reflect upon the implications of this Chapter. In charting the rise of the Behaviour Change Agenda we

hope to have achieved three things: 1) to outline the varied intellectual sources associated with the

movement; 2) to reveal the different relations which these competing strands of behavioural

economics (particularly those associated with the new and old behavioural economists) have to
classical economics and the standard economic model of human behaviour; and 3) to reveal the

increasingly significant political and ethical implications associated with the translation of the

Behaviour Change Agenda from academic study into public policies. On the basis of our account of

the contingent process and events that have led to the rise of the Behaviour Change Agenda, we hope

to establish the grounds upon which to develop a sustained critique of its application. Furthermore, we

aim to explore how the insights of this behavioural regime could be used to support very different,

and possibly more progressive, political programmes.

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