Chris Lydon has a great interview with Cass Sunstien on his new book with economist Richard Thaler called Nudge.

Their core argument is that the conventional view of economists and political scientists that we calculate costs and benefits in making decisions and choose those paths that maximize our utility is flawed. Sunstien and Thaler suggest that we have both a reflective rational brain and an impulsive emotional brain that often overwhelms our rational tendencies. For example, people often overemphasize recent events when assessing risk (think of fear of shark attack after the movie Jaws) Sunstien and Thaler invite us to consider doing social science by assuming that the impulsive emotional brain is making decisions. Sunstien uses the example of Homer Simpson trying to buy a gun and hearing about a three day background check and responding to the clerk “but I’m angry now!”

homer has a gun

The idea that we are persuaded by emotional appeals might be nothing new for sociologists steeped in frame analysis. But in political science and economics, this is indeed a revolution. In popular parlance, Frank Luntz’ successful re-framing of the estate tax as the “death tax” is a classic example of the effect of the emotional brain at work in making policy assessments.

Sunstien and Thaler advocate the idea of constructing “choice architectures” that take people’s irrationality into account and creates policy systems that make people more likely to engage in beneficial behavior. A policy design in this vein is an automatic “opt-in” to a 401K plan that is voluntary because it can be opted out of but starts with an automatic withrdawal for retirement as a default rather than expecting people to deliberately put aside money for retirement.

Austin Goolsby, Obama’s chief economic adviser, is an adherent of this type of behavioral economics. It is a subtle change in our public policy approach, but has a great power to create effective outcomes. I do wonder if it’s smart politics to say that the public is irrational and thus we should structure policy to work again the public’s worst impulses.