New Paternalism Meets Older Wisdom: Looking to Smith and Hume on Rationality, Welfare and Behavioural Economics

Behavioural economists should learn from the classical liberals of the past, such as Adam Smith and David Hume, who recognized the deep complexities of rationality and welfare and advocated for securing citizens the freedom to cultivate their interests and employing the power of persuasion to help individuals help themselves.

Format: Paperback / softback
Length: 160 pages
Publication date: 07 March 2024
Publisher: Institute of Economic Affairs

What can today's behavioral economists learn from the classical liberals of the past?

Erik Matson offers critical reflections on what he calls the new paternalism - a modern-day approach to policy-making that aims to make individuals better off, when judged by their own standards. He argues that the new paternalist approach to policy is far too prescriptive, relying on inappropriate conceptions of rationality and welfare. And he looks to the works of two giants of economics and philosophy - Adam Smith and David Hume - for a richer vision. He places Smith and Hume's 18th-century writings into a contemporary context and concludes that today's practitioners could learn much from their wisdom.

This wisdom, he contends, acknowledges the deep complexities of rationality and welfare. It shows why policymakers should focus on securing citizens the freedom to cultivate their interests, and why regulators should employ the power of persuasion - rather than paternalism - to help individuals help themselves.

The new paternalism is a modern-day approach to policy-making that aims to make individuals better off, when judged by their own standards. It is far too prescriptive, relying on inappropriate conceptions of rationality and welfare. Erik Matson looks to the works of Adam Smith and David Hume for a richer vision. He places Smith and Hume's 18th-century writings into a contemporary context and concludes that today's practitioners could learn much from their wisdom. This wisdom acknowledges the deep complexities of rationality and welfare, showing why policymakers should focus on securing citizens the freedom to cultivate their interests and why regulators should employ the power of persuasion rather than paternalism to help individuals help themselves.

Dimension: 198 x 129 (mm)
ISBN-13: 9780255368339