Is a Return to Socialism a Worthy Option?

FREEDOM OF CHOICE lies at the core of free societies. At one level the idea is so deep-rooted that the thought of any ill effects flowing from this freedom is considered next to impossible. But think again. From a host of health disorders to maladies that are clearly the products of ill- informed choices to the problem of ‘navigability’ in general, the pathologies of choice are too glaring to be ignored.

On Freedom by Cass R Sunstein (Princeton University Press; 136 pages; Rs 1,300) is a slim but deep volume that delves into these issues. Based on his Holberg Prize lecture, the book looks not only at his pet theme—‘nudging’ people to better choices— but at the very structure of bad choices and how they emerge.

These are complex questions and perhaps they are a product of a time when goods, services and choices are abundant. As Sunstein and a host of other scholars have elaborated, so have options with negative consequences. Designing appropriate responses that preserve the element of choice (and importantly, freedom that accompanies it) is a difficult task. Sunstein’s examples and his breakdown of what can be done are illuminating and highlight the complexities involved. Two are worth citing here.

One: John is at a dinner celebration. The food is terrific. He eats a lot of it. He has a wonderful time. The next day, he steps on the scale, and he finds that he has gained two pounds. He wishes that he had not eaten so much. He feels terrible.

Two: Edith is at a work-related conference for a week. She is happily married. She meets a married man named Charles, and there is an immediate attraction. They have a brief, steamy, wonderful romance. When she comes home, she feels terrible about it. She does not tell her husband, but the memory haunts her; she wishes the romance had never happened.

One way to look at these events is to break them down into three stages: Time 1, when the preferences of people like John and Edith may or may not be clear. For example, John knows the dangers of overeating. The actual decision/action takes place at Time 2. This is the time when John abandons caution (or is unable to control himself or displays a weakness of will). Finally at Time 3, John feels regret. The question that On Freedom raises is whether a social planner can fashion ‘commitment devices’ that can alter the course of John’s action at Time 2 (or Time 1, when he may be deliberating whether to binge or not).

The issue is complex. What is so special about intervening at Time 1 to change John’s preferences? Isn’t Time 2, when he indulges himself, a better stage to prevent him from doing what he did? There is no general recipe for altering preferences and behaviours for multiple problems of self-control, lack of information or a more extreme problem like addiction.

‘Why does John or Edith deserve authority at Time 1 or Time 3, rather than at Time 2? What makes either of their views authoritative or authentic, rather than the choice at Time 2? What makes the planner so special, or the regretter? To be sure, both John and Edith might have had less than complete knowledge at the time of choice; in all probability, they did not fully or adequately appreciate the consequences of their choices. They were exporting costs to their future selves. They might have ignored or undervalued these costs. That is important; it suggests a good reason to deny authority, in some cases, to the chooser at the time of choice. But at Time 1 or Time 3, there might well be incomplete knowledge as well, or at least incomplete appreciation of the situation at Time 2.’

This is an interesting perspective. It finally leads Sunstein to conclude, somewhat controversially, that ‘In my view, there is no alternative to some kind of external standard, involving a judgment about what makes the chooser’s life better, all things considered. This judgment might require moral evaluations of options and outcomes. It might require some kind of aggregate judgment about people’s personal well-being.’

Clearly, this is a slippery terrain. For example, consider addiction to smoking cigarettes. In many cases, smokers don’t know the dangerous consequences of what they are doing. An appropriate nudge would be to put pictorial warnings of what happens to smokers’ lungs on cigarette packets. If it were a simple matter of lack of knowledge, this will deter a smoker. But it is well known that a large majority of smokers simply ignore these warnings. Does this require something stronger? For example, higher taxes on tobacco products? This would be in line with Sunstein’s reasoning. But here’s the problem: this will violate the choices available to a smoker, while the idea of nudge is to gently make better information available to change a person’s preferences at Time 1. In contrast, higher taxes come close to interventions at Time 2. These are matters that require careful deliberation about design, choice architecture and policymaking.

Many of these problems of navigability and self-control were known in an earlier age as well. At that time, paternalistic states were expected to take major decisions that affected a whole range of personal choices. In case of socialist states (or those with mixed economies with a pronounced socialist bias, for example India) this was enough of a ‘solution’: If consumer choices are limited by the goods that are available, then many of the problems of self-control and navigability that Sunstein discusses don’t exist or at least they don’t emerge to an extent as they do in societies with much greater freedom.

Is a return to socialism of sorts an option to overcome such problems? That is an opinion that has always remained popular among people of a certain persuasion. Any reasonable person will agree that this is an extreme solution. This is for two reasons. One, this comes close to cracking the egg with a hammer: the negative effects of choices associated with freedom are sought to be overcome by extinguishing freedom itself. Two, historically, the most well-known examples of socialism, in Eastern Europe and the Soviet Union, did not end well. To be true, the problems associated with choice did not exist in these societies but delegating these choices to the state ended up creating economic pathologies that had not been seen before.

There is, of course, a wide gulf between nudging and socialism. But one element is common: a social planner decides when to intervene and how to do that. Ideally, this would be done in a simple and transparent manner. But as Sunstein’s examples show, this is not easy in practice. In societies with better information aggregation and processing abilities, this may be possible as the creation of behaviour analysis units in different governments has shown. Things are a tad messy in countries like India with a much more stifling bureaucratic culture: Nudges are likely to quickly transform into commands. But the idea of helping people navigate their lives with better information and nudges while preserving freedom of choice is brilliant. On Freedom offers a neat look into these complex issues.

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