In one of his more trenchant observations on the human condition, Thomas Jefferson wrote, “Freedom is the right to choose, the right to create for oneself the alternative of choice. Without the possibility of choice, and the exercise of creation, a man is not a man, but a member, an instrument, a thing.” Given all the biological, psychological, and evolutionary baggage we carry into the marketplace, are we really free to choose?
Science has made a first line of inquiry into decision making and choice behavior in a new field called computational neuroscience, pioneered by the neuroeconomist Read Montague and discussed in his improbably titled work, Why Choose This Book?1 Computational neuroscience focuses on the information processing that goes on inside our brains. Montague argues that our brains evolved computational programs to evaluate choices in terms of their value and efficiency as judged by goals that we care about. Value gives a choice option a computational number. Efficiency determines whether the choice is worth making. Those organisms that correctly compute the costs and long-term benefits of their choice options will be more efficient than those that do not, and as a consequence they are more likely to survive and pass on their genes for making good decisions. We are their descendants.2
Life, like the economy, is about the efficient allocation of limited resources that have alternative uses, to paraphrase the economist Thomas Sowell. It all boils down to determining the value of the available choices and what each one costs in terms of energy efficiency. To a predator, says Montague, prey animals are packages of energy to be consumed in order to recharge the computer’s batteries. “This doctrine mandates that evolution discover efficient computational systems that know how to capture, process, store, and reuse energy efficiently,” Montague suggests. Those that do, pass on their genetic programs for efficient computational neural processing to make efficient choices. Over the course of millions of years our brain has evolved to be so efficient that it consumes about one-fifth of the energy of an average lightbulb, costing about a nickel a day to run.3 That’s cheap! And cool. Think of how hot your computer gets even while it is just idling. If our brains were designed like our computers, our heads would be too hot to touch.
According to the Computational Theory of Mind (CToM), the mind is nothing more than a computational program running on a special type of machine called the brain. “It’s the information processing that the brain carries out that is equivalent to our thoughts, not the parts themselves,” Montague explains.4 The reason that our computational programs can determine the value of a choice is that we evolved the capacity to care, and more precisely, to care about one option more than another. Our computers can run computational programs, but they cannot do what the brain’s computational programs can do, which is to care about the choices made.5
Computational programs are designed by evolution to learn how to solve certain tasks, and society then tweaks these ancient programs toward specific cultural preferences. Rats, for example, inherit programs that are especially good at learning mazes and pressing bars because they evolved to forage in dark and spatially complex environments. Humans inherit programs that are especially good at visual acuity tasks and at navigating social situations because we evolved to forage in trees and to negotiate complex social environments. There are no blank slates for mice or men. Species have different goals, but the deeper underlying purpose behind goal-seeking behavior is the same. “Despite their differences,” Montague continues, “all goals have one thing in common: They can all be used by our brains to direct decisions that lead to the satisfaction of the goal.”6
Unfortunately, these evolved computational programs can be hijacked. Addictive drugs, for example, rewire the brain’s dopamine system—normally used to reward choices that are good for the organism, such as food, family, and friends—to reward choosing the next high instead. We have all marveled at the inanity of rich and successful athletes, actors, artists, and others who throw away their careers, lose their friends, and finally abandon their families, all in exchange for recharging their dopamine receptors one more time . . . to the point where they end up destitute, incarcerated, or dead. How can this be? Are brain chemicals really that powerful? They are.
Here’s how the system works . . . and doesn’t work. In the brain stem—one of the most evolutionarily ancient parts of the brain, shared by all vertebrates—there are pockets of roughly fifteen thousand to twenty-five thousand dopamine neurons on each side of the divided brain that shoot out long axons connecting to other parts of the brain. These neurons stimulate the release of dopamine whenever it is determined that a received reward is more than expected, thereby causing the individual to repeat the behavior. Thus, the release of dopamine is a form of information, a message that says “Do that again.” (Recall that the dopamine system is probably more of a wanting system than it is a liking system.) Addictive drugs take over the role of reward signals that feed into the dopamine neurons. So too do addictive ideas, most notably addictive bad ideas, such as those propagated by cults that lead to mass suicides (in the case of Jonestown and Heaven’s Gate), or those propagated by religions that lead suicide bombers to commit mass murder (in the case of Islamic militant extremists).
I have made the case in this book that we evolved moral emotions that operate similarly to other emotions, such as hunger and sexual appetite. Thinking of these emotions as proxies for highly efficient computational programs deepens our understanding of the process. When we need energy, we do not compute the relative caloric values of our food choices; we just feel hungry for certain food types, eat them, and are rewarded with a sense of satisfaction. Likewise, in choosing a sexual partner, the brain employs a computational program to make you feel attracted to people with good genes, as indicated by such proxies as symmetrical face and body, clear complexion, and the hourglass figure in women and the inverted-pyramid build in men. In a similar manner, when we make moral choices about whether to be selfish or altruistic, we experience the emotion of guilt or pride for having done the wrong or right thing, but the moral calculation of what is best for the individual and the social group was made by our evolutionary ancestors. Emotions such as hunger, lust, and pride are stand-ins for these computations. As Blaise Pascal famously concluded, “The heart has its reasons, of which reason knows nothing.” Or, less poetically, the Nobel laureate economist Friedrich Hayek noted that “if we stopped doing everything for which we do not know the reason, or for which we cannot provide a justification . . . we would probably soon be dead.”7
How can we utilize this understanding of choice to our advantage? One place to start is in market choices. Montague and his colleagues scanned the brains of sixty-seven subjects inside Baylor’s fMRI machine. Some of them received a sip of either Coke or Pepsi from a tube, while some of them were exposed to a picture of a distinctively labeled Coke or Pepsi can, or to no image at all. The subjects showed no preference for the colas offered with no label (in other words, they failed the classic “taste test”), but they overwhelmingly preferred any cola that was delivered along with the Coke brand. In analyzing the brain scans, Montague discovered that the Coke brand has a “flavor” in the ventromedial pre-frontal cortex, a region essential for decision making. The Pepsi brand triggered no such brain response.
What this means is that certain brands change dopamine delivery to different parts of the brain. “These experiments show clearly that a cultural message, the brand image of Pepsi or Coke, has differential representation in people’s nervous systems in such a way that this brand knowledge can be visualized in fMRI experiments, where its influence on choice can also be measured,” Montague concluded.8 (This is the same area, by the way, that was destroyed in the brain of the now notorious Phineas Gage, the nineteenth-century railroad worker who had an iron tamping rod accidentally blasted through his skull. Astonishingly, he survived, but he suffered lifelong social and emotional disabilities, most notably an inability to make decisions about even the most quotidian needs.) Brands stamp their power on our brains on a short-term basis through dopamine delivery and on a long-term basis by rewiring our neurons. And this process happens on a daily basis—it has been estimated that we are exposed to forty thousand commercials a year. By the age of eighteen months, children can recognize product logos. By age ten they know three hundred to four hundred brands by memory. By adulthood the number of recognized brands climbs into the thousands. “We can show that the idea of Coca-Cola activates structures in your midbrain that literally drive your behavior,” Montague explains. “That is how ideas gain control over instinct.”9
Just as Coke is a proxy for flavor, hunger a proxy for caloric need, lust a proxy for reproductive necessity, and guilt and pride proxies for immoral and moral behavior, so too can we market moral brands in order to reward and rewire brains to value and choose good ideas. This is what consciousness-raising is all about, and we now understand the neural wiring behind it. So in honor of the late economist Milton Friedman, author of the once radical but now mainstream book Free to Choose, which early in the development of my economic ideas rewired my brain’s dopamine system to prefer the brand of free choice in markets, I propose that we begin our consciousness-raising for free societies by marketing this brand—the Principle of Freedom: All people are free to think, believe, and act as they choose, as long as they do not infringe on the equal freedom of others.
In response to the Principle of Freedom, two challenges may be leveled: one is the Overdeterminism Problem, in which the many causal variables discovered by science appear to leave little room for genuine freedom and free choice; the second is the Paternalism Problem, in which critics of free markets and market capitalism could argue that people are too irrational and too determined to act wisely in their own interests and in the interests of society, and so politicians and lawmakers need to restrict our political and economic freedoms and make choices for us. I shall dispense with both of these challenges forthwith. After he published his book Sociobiology in the late 1970s, Edward O. Wilson was viciously attacked; when evolutionary psychology first made headway in the 1990s, there were equally vindictive assaults on its researchers. The genesis of these attacks was a fear that science would rob humans of our freedom and dignity. Nothing could be further from the truth. In fact, the best research to date shows that at most some human traits are 50 percent genetically or biologically determined.
Consider the gene that codes for the production of the brain neuro-transmitter dopamine. Called D4DR, it is located on the short arm of the eleventh chromosome. When dopamine is released by certain neurons in the brain, it is picked up by other neurons that are receptive to its chemical structure, thereby establishing dopamine pathways that stimulate organisms to become more active and reward certain behaviors that then get repeated. Knocking out dopamine from a rat or a human, for example, causes them to go catatonic. Overstimulating dopamine causes frenetic behavior in rats and schizophrenic behavior in humans. We know about the D4DR gene because of the discovery by the geneticist Dean Hamer of its connection to risk-taking behavior. Most of us have four to seven copies of the D4DR gene on chromosome 11. Some people, however, have two or three long copies, while others have eight to eleven short copies. Longer, and fewer, copies of the D4DR gene translate into lower sensitivity to dopamine, which stimulates people to seek greater risks in order to artificially get their dopamine fix. Leaping off buildings, antennae, spans, or earth (from which the acronym BASE jumping comes) is one way to do it, although high-risk gambling in Las Vegas or on Wall Street may also do the trick. As a test of this hypothesis, Hamer first had subjects take a survey that measures desire to seek novelty and thrills. (Skydivers knock the ceiling off this survey.) He then took a sample of their DNA from chromosome 11 and discovered that people who score high on the risk-taking survey had fewer copies than normal of the D4DR gene.
This sounds deterministic in headline form (“Scientists Discover Risk-Taking Gene”), but in fact Hamer claims that this finding enables us to explain only 4 percent of novelty-seeking and risk-taking behavior based on the D4DR gene sequences alone. Recall that in a previous chapter we discussed correlation and what it means to square the r to give us a percentage of the variance in any given trait that can be accounted for by the variable under question. Height and weight give an r of 0.70, or r2= 0.49, so we can say that 49 percent of one’s weight is accounted for by one’s height, which means that fully half of your weight is under the control of environmental conditions, such as diet and exercise. Think about that finding in the context of the Overdeterminism Problem. You won’t find a trait much more biologically and genetically determined than the relationship of height and weight, and yet even here you get to control half of the variance yourself by freely choosing to manipulate your environment and lifestyle choices.
So when neuroscientists claim to have discovered a brain module or a neural circuit associated with X, as important and interesting as such findings are, it is anything but deterministic in its implications. And dopamine is a perfect example for our purposes because it is one of the most exciting and potentially useful discoveries ever made by neuroscientists, but if the genetic architecture determining the output of dopamine in the brain accounts for only 4 percent of the variance among people on some given trait—such as risk-taking behavior—how can that possibly lead us to conclude that we are determined by the biology of our brains?10
Of course, one might rejoin that this is just one of numerous brain chemicals that in cocktail form intoxicate us into taking actions we might not otherwise choose. Given the suite of findings from behavioral economics and neuroeconomics that have demonstrated just how unconscious and irrational our choices are, it may seem reasonable to call into question just how much freedom we have when we feel free to choose. And we haven’t even considered the most dramatic research on the neuroscience of free will—that of Benjamin Libet in his now famous 1985 experiment, since corroborated in many labs. Libet took EEG readings of the brain’s activities in order to determine the precise moment at which we become aware of our intention to perform an action, such as raising a finger. Subjects sat before a screen in which a dot was moving about a circle like the second hand on a clock face. They were asked to do two things: (1) note the position of the dot on the screen when “he/she was first aware of the wish or urge to act,” and (2) press a button that also recorded the position of the dot on the screen. The difference between (1) and (2) was two hundred milliseconds. That is, twotenths of a second elapsed between thinking about pressing the button and actually pressing it.
But that’s not the disturbing part. The EEG recordings for each trial revealed that the brain activity involved in the initiation of the action was primarily centered in the secondary motor cortex, and that part of the brain became active three hundred milliseconds before subjects reported their first awareness of a conscious decision to act. That is, the awareness of our intention to do something trails the initial wave of brain activity associated with that action (what is called the EEG “readiness potential”) by about three hundred milliseconds. That is, three-tenths of a second elapsed between the brain’s making a choice and our awareness of the choice. Add to that three-tenths of a second the other two-tenths of a second to act on the choice, and it means that a full half a second passes between our brain’s intention to do something and our awareness of the actual doing of the act. Because the neural activity that precedes the intention to act is inaccessible to our consciousness mind, we experience a sense of free will. But it is an illusion, caused by the fact that we cannot identify the cause of the awareness of our intention to act. Because the action consistently follows the intention, we feel as if we freely willed the act, when in reality both the awareness of intention and the overt action in response to the intention are caused by prior neural events of which we are unaware.11
Such findings imply that our “free choices” are really nothing more than the equivalent of the magician who offers a volunteer from the audience a chance to “pick a card, any card,” knowing full well that he is employing some version of a “force” that makes the volunteer’s choice anything but free. This is a very serious problem for economists, politicians, and social theorists, because to live in a civil society we need to hold people accountable for their actions, which means that we must assume that they make free choices. If we are fully determined by a combination of our genetics and our environment, then how can we justify punishing someone for an illegal or immoral act? Here are several solutions to this conundrum that I believe maintain the integrity of both science and society:12
Free will as a useful fiction. I feel “as if ” I have free will, even though I know we live in a determined universe. You do the same. Since no one has satisfactorily solved the problem of free will and determinism in four thousand years of philosophical thought and five hundred years of scientific research, the problem may be an insoluble one. (The insolubility, in fact, may be due to nothing more than the limitations of language. Depending on how “free will” and “determinism” are defined, it may simply be impossible to square the circle.) So why not act as if you do have free will, thereby gaining the emotional gratification that comes with this useful fiction, along with the social benefits that accrue by holding people accountable for their actions?
Free will as a fuzzy fraction of determinism. Instead of thinking of concepts like “free will” and “determinism” as reified things—Platonic types that exist as unchanging entities—reconfigure them in the language of fuzzy logic, where we assign a fractional probability to something. Just as the sky can be 0.1 blue at dawn and 0.9 blue at midday, so too can behavior be assigned a fuzzy probability; for example, perhaps someone’s behavior could be scaled somewhere between a 0.1 and a 0.9 in evilness, or between a 0.1 and a 0.9 in how much the evil behavior was freely chosen or shaped by other forces. The law already makes such fractional distinctions for homicides that range between, say, 0.1 for an accidental shooting, 0.5 for a self-defense shooting, and 0.9 for a premeditated shooting. A behavior that ranges in causal influence between 0.1 and 0.9 is still not an absolute 0 or 1, and so moral culpability is sustained through the fractional level of free will that remains. Even if free will is diminished, it is not extinguished.
Free will as causal uncertainty. In science, the causal-net theory of determinism holds that human behavior is no less caused than other physical or biological phenomena, but that it is more difficult to understand and predict because of the number of causal elements in the net encompassing our behavior. The human and social world in which we live is extremely complex, interactive, and loaded with autocatalytic feedback loops that drive systems into states of chaotic behavior. Since no cause or set of causes we consider as the determiners of human action can be complete, practically speaking we can treat them as conditioning causes, not determining ones. Although our genes, environments, and historical pathways on some level do determine our actions, every individual set of genes is unique, each environmental setting is distinctive, and every historical pathway that each of us has taken belongs to us alone. In this sense, each of us is unique and different from all others, the product of matchless genes, environments, and historical pathways that are so complex and so entwined that no one could possibly know all of the causal variables for themselves or anyone else. Free will arises out of this ignorance of causes.
Free will as an evolutionary by-product. Because of our uniquely huge brain and exceptionally large prefrontal cortex, we are self-aware and aware that others are self-aware. We have a Theory of Mind that allows us to place ourselves inside others’ minds, and we know that others have the same capacity. We can reason using symbolic language that also allows us to communicate and reason with others. We are moral animals with an evolved sense of right and wrong and a natural inclination to be both cooperative and competitive, altruistic and selfish, good and evil. Free will emerges from the fact that we can weigh the consequences of the many courses of action available to us, then make choices and act on them, and also that we are aware that we (and others) make such choices. From these evolved capacities we can and do hold ourselves accountable for our actions just as we can and do hold others accountable for their actions.
Free will as an emergent property of the brain. The mind is an emergent property of billions of individual neurons, each one of which is connected to thousands of other neurons that together produce trillions of potential neuronal states. As the individual grows and develops into adulthood, the interconnections grow and develop according to individual life experiences. Although we share a common evolutionary ancestry that generated a universal neural architecture, the brain changes in response to the environment. This sets up another self-generating feedback loop in which new experiences stimulate neurons to grow new synaptic connections. Those new connections are distinctive to every individual mind, which then responds to the environment in a unique manner, producing a behavioral repertoire of responses that is unmatched by anyone else’s. Since no life paths are the same, the trillions of possible permutations of neuronal connections in each brain mean that every human mind is unique. Out of the higher order emergent property of this uniqueness, in conjunction with the previous freedom factors, comes free will.
Free will as a product of neural computation. In this book I have argued that states of mind such as emotions are efficient proxies for computations made by evolution over the Paleolithic eons so that we don’t have to make the calculations ourselves. In this sense, free will may be a proxy for choice computation. Making choices is a real neural process that involves selecting behaviors that have survival consequences, such as predator avoidance, food preparation, mate selection, friendship bonding, social status seeking, and the like. Thus, making choices that lead to behaviors that result in actual consequences for survival and reproduction in our evolutionary history would have led to the evolution of brain mechanisms that give a sense of free will, a feeling of freedom, an emotion of volition. With the complex brains that we possess, living in a world with so many options from which to choose, our brains have built into them a choice-making module that, whether truly free or truly determined, nonetheless makes us feel free.
The Paternalism Problem arises directly from the research on Subjective Well-Being and happiness. If one goal of society is to create the greatest happiness for the greatest number, to what extent should public and private institutions attempt to establish policy to exacerbate sins and enhance virtues? Since research shows that money does not make people happier unless they are below the poverty line, does this justify a form of happiness welfare to ensure that everyone is at least out of poverty? Likewise, science reveals that, on average, married people are happier than divorced and single people, so should government incentives such as tax breaks for marriage be increased to encourage more participation in this social institution? Since people with meaningful work tend to be happier than the unemployed, does this justify government make-work programs? Religious people are slightly happier than nonreligious people, so should the state create religious tax incentives?
According to the London School of Economics economist Richard Layard, such paternalisms are justified by the scientific research.13 Using the findings from behavioral economics, neuroeconomics, and other related sciences that inform us about what makes people happy and why, Layard concludes that governments should get more involved in directing the personal lives of their citizens. Since we know that smoking and drinking are unhealthful, we should increase taxes on such behavior by passing more so-called “sin taxes.” Because a large disparity in wealth between the rich and the poor makes people in lower income brackets feel that they can never measure up, this would justify an increase in taxes on the rich in order to redistribute wealth and discourage a rat-race mentality. Research reveals that we get great satisfaction from helping the poor and the mentally ill, so we should establish incentives to encourage more people to do so. Unemployment dramatically decreases happiness, so government must take steps to eliminate high unemployment even if it means setting up government work programs just for this purpose. Psychologists have proved that excessive commercial advertising to children increases their desire for material things that are really not necessary to experience a fulfilling childhood, so such advertising practices should be banned. Furthermore, Layard thinks that we need to enforce more family-friendly practices at work, subsidize social activities that encourage community spirit, and include in public school curricula a K–12 yearly course in moral education that would cover principles of morality, the practice of empathy, the importance of serving others, the study of role models, the control of emotions, parenting, mental illness, and how to be a good citizen. “This means that public policy should be judged by how it increases human happiness and reduces human misery,” Layard suggests, citing the research that shows that “extra income increases happiness less and less as people get richer.” From this he concludes, “This was the traditional argument for redistributive taxation, and modern happiness research confirms it.”14 Brave new world.
The paternalism conclusion is not even wrong. Happiness. Freedom. Government. Pick two. If you want happiness by government fiat, there goes your freedom. Enforced policies to encourage happiness must inescapably lead to a decrease in freedom. This is true by definition—enforced means you are forced; that is, you have no choice. If you want happiness and freedom, you have to minimize government interference. As Jefferson warned, “A government big enough to give you everything you want, is strong enough to take everything you have.”
The Austrian economist Ludwig von Mises, the spiritus rector of free market economics, demonstrated why the wrong mixture of government and freedom leads to tyranny and unhappiness. He learned the lesson first in his personal life. Mises was born in 1881 within the then powerful Austro-Hungarian Empire. He studied law and economics at the University of Vienna under Friedrich von Wieser and Eugen von Böhm-Bawerk, both followers of Carl Menger, the founder of the Austrian School of Economics. After serving as an artillery officer on the Russian front in World War I, Mises earned international recognition for his first major book, Socialism, in which he demonstrated why planned economies cannot work without a free market pricing system. He continued working on specific problems in economic theory, until his life was disrupted in March 1938 when Hitler marched into Vienna and Mises marched out to the United States. There Mises began his long and lonely struggle against economic and political tyranny, a lone advocate of economic freedom in an increasingly socialistic society. The problem, Mises argued as he expanded his theory to encompass not just the economic sphere but the political as well, is that government interventionism in one area leads to additional interventionism in other areas. In his 1949 magnum opus, Human Action, Mises posed this problem: if you allow governments to paternalistically intervene to protect individuals from dangerous drugs, what about dangerous ideas?
Opium and morphine are certainly dangerous and habit forming drugs. But once a principle is admitted that it is the duty of government to protect the individual against his own foolishness, no serious objections can be advanced against further encroachments. A good case could be made out in favor of the prohibition of alcohol and nicotine. And why limit the government’s benevolent providence to the protection of the individual’s body only? Is not the harm a man can inflict on his mind and soul even more disastrous than bodily evils? Why not prevent him from reading bad books and seeing bad plays, from looking at bad paintings and statues and from hearing bad music?15
Mihaly Csikszentmihalyi, the psychologist who discovered flow (whose work we discussed in chapter 8), gave me an example of too much state paternalism in people’s personal lives, which he recalled was imposed in his home country while it was under Communist control: “Back in Hungary they figured that popular products like Beatles records should be taxed in addition to the normal tax. They called this a garbage tax, because the government thought of such products as garbage. They then applied that tax money to funding what they considered to be more culturally worthwhile projects, such as the symphony, the ballet, etc. It’s very paternalistic, and yet they claimed they are on the side of culture and tradition. But it didn’t work.”16
If research shows that the existence of wealthy neighbors puts me on a hedonic treadmill that I can never satisfy, and therefore policy is legislated forcing my neighbors to redistribute some of their wealth to me and others less fortunate, this will not increase my happiness, because I did not earn the bonus, and it will not increase my neighbor’s happiness, because they did not voluntarily donate their wealth to what they deemed a good cause. Scientific research shows that economic self-reliance makes people happier than economic dependency, and studies show that people are happier, healthier, and more generous when they voluntarily donate their money to causes they deem worthy instead of having their money confiscated from them and given to causes that they would not otherwise have chosen to support. Proof for this claim can be found in two sets of data: (1) studies on national charitable giving, and (2) studies on international happiness and freedom.
1. National Charitable Giving. Research on the difference between forced and voluntary giving reveals a counterintuitive finding on the differences between the political left and right. If we are going to base political policy on scientific data, then what are we to make of the research reported by Syracuse University professor of public administration Arthur C. Brooks in his revealing book Who Really Cares? When it comes to charitable giving and volunteering, numerous quantitative measures debunk the myth of “bleeding-heart liberals” and “heartless conservatives.” The opposite, in fact, appears to be true. Conservatives donate 30 percent more money than liberals (even when controlled for income), give more blood, and log more volunteer hours. And it isn’t because they have expendable income that conservatives are more generous. The working poor give a substantially higher percentage of their incomes to charity than any other income group, and three times more than those on public assistance of comparable income. In other words, poverty is not a barrier to charity, but welfare is. One explanation for these findings is that people who are skeptical of big government give more than those who believe that the government should take care of the poor. “For many people,” Brooks explains, “the desire to donate other people’s money displaces the act of giving one’s own.”
On that front, we don’t need science to tell us what we already know. The French economist Frédéric Bastiat, whom I have quoted on several occasions already, wrote in the early nineteenth century, “Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.”17 Later that century George Bernard Shaw noted with sarcasm, “A government which robs Peter to pay Paul can always depend on the support of Paul.”18 Or as G. Gordon Liddy put it in his straight-faced style, “A liberal is someone who feels a great debt to his fellow man . . . which debt he proposes to pay off with your money.”19 Finally, as the political humorist P. J. O’Rourke observed, “Giving money and power to government is like giving whiskey and car keys to teenage boys.”20
Liberals feel that they already donated to the poor through their taxes, whereas conservatives believe that it is their duty, not the government’s, to assist those in need. Let’s think about these findings in the context of evolutionary economics. Our entire evolutionary history was played out in tiny social groups of highly related family and tightly bonded relationships where mutual aid and cooperative support were vital to ensure the survival of the group members and the group itself. We have already seen how religion is a proxy for tight social bonding among members of a community, so it should not surprise us to learn that religious people are four times more generous than secularists to all charities, 10 percent more munificent to nonreligious charities, and 57 percent more likely than a secularist to help a homeless person. Those raised in intact and religious families are more charitable than those who were not. And the adaptive survival benefits of giving are real: in terms of societal health, charitable givers are 43 percent more likely to say they are “very happy” than nongivers, and 25 percent more likely than nongivers to say their health is “excellent” or “very good.”21
By the paternalistic line of reasoning, then, and following these data where they lead to public policy, governments should give tax breaks to conservatives, the wealthy, the working poor, and the religious in order to reward their prosocial behavior and encourage more giving. All tax-and-spend liberals in favor of this policy are invited to my home for beer and burgers.
2. Studies on International Happiness and Freedom. International research shows that an increase in personal autonomy and self-control leads to greater happiness, and that people tend to be happier in societies with greater levels of individual autonomy and freedom compared to those in more totalitarian and collectivist regimes. The social scientist Ruut Veenhoven, from Erasmus University in Rotterdam, for example, conducted a comprehensive survey on happiness with life as a function of three social conditions: individualism, opportunity to choose, and capability to choose. “The data show a clear positive relationship,” Veenhoven concludes; “the more individualized the nation, the more citizens enjoy their life.” Further, he found no “pattern of diminishing returns,” meaning that “individualization has not yet passed its optimum.” In other words, greater levels of individual freedom and autonomy could lead to even greater levels of happiness.22
The rub is in finding the right balance between individual freedom and autonomy and collective fairness and justice. In the small bands of our Stone Age ancestors, the social ties of genetic relatedness and the social glue of reciprocal exchange served as the natural cohesive to hold people together without a lot of external constraints on freedom and autonomy, but with the rise of chiefdoms and states, artificial institutions were needed to enforce the rules of cooperation and conflict resolution. But how much external governance do we need?
How can we paternalistically encourage behaviors that lead to greater mental health and happiness and not at the same time decrease freedom and choice, thereby obviating the original purpose of the paternalistic policy? The answer may be found in programs that allow the maximum freedom of choice while providing incentives for options that encourage healthier and happier living. An example of just such a program is called libertarian paternalism, developed by the University of Chicago economists Cass Sunstein and Richard Thaler. They swear the term is not an oxymoron.23 Sometimes called “soft paternalism”—to contrast it with the “hard paternalism” of strong state interventionism—libertarian paternalism preserves freedom of choice while implementing what we have learned from behavioral economics and neuroeconomics about people’s needs, wants, and irrationalities. Sunstein and Thaler propose that we encourage the establishment of policies and institutions that nudge people in the direction of doing what is good for them, as informed by science and freely chosen by voluntary consent. Reflecting the language of behavioral economics, the authors write:
Often people’s preferences are ill-formed, and their choices will inevitably be influenced by default rules, framing effects, and starting points. In these circumstances, a form of paternalism cannot be avoided. Equipped with an understanding of behavioral findings of bounded rationality and bounded self-control, libertarian paternalists should attempt to steer people’s choices in welfare-promoting directions without eliminating freedom of choice.24
We know, for example, that when people are assessing a medical procedure that includes significant risk, how the options are presented significantly influences the choice that is made—patients are far more likely to agree to a risky procedure when they are told, “Of those who have this procedure, 90 percent are alive after five years,” than if they are told, “Of those who have this procedure, 10 percent are dead after five years.”25 So there is a difference between feeling lucky to be alive and feeling lucky to be not dead, and that difference will be reflected in how the question is asked. Since the question has to be worded in some manner, that phrasing should be as well informed by science as possible.
Another constraint on choice is the nature and origins of the options from which to choose. As a simple example, if you are the owner of a restaurant, you have to design a menu that you think will appeal to customers. There must be some arrangement of the items on the menu, and since you are going to make that arrangement, you can fill the menu with nothing but healthful foods that taste bland, nothing but unhealthful foods that taste great, or some admixture thereof. Whatever arrangement you make, you have just limited the choices of your customers. If, say, in addition to wanting to make a modest profit in order to keep your business going, you also have a social conscience and would like to help society by encouraging people to consume more healthful diets, you could paternalistically offer people nothing but healthful choices. Ideally, those food items would also be appetizing in order to meet your first need of staying in business, but once that need is met, you can move up the moral hierarchy by prodding your customers toward better dietary habits.
In fact, in March 2007, the restaurant chain T.G.I. Friday’s implemented something very much like this with their new menu they call Right Portion, Right Price, in which they offer customers smaller-portioned meals at a lower price. The CEO, Richard Snead, offered an explanation that perfectly balances the tension between corporate profit and social conscience: “This is a category issue stemming from consumer demand. The category needs to listen. This is a significant part of Friday’s overall goal of personalizing and customizing the guest experience. No matter what your lifestyle choice, you don’t have to sacrifice taste. Smaller portions at smaller prices meet all lifestyle choices.”26
Where there is a binary choice that must be made, an effective strategy is to switch the default option from electing to participate (opt in) to choosing not to participate (opt out). Since people have to make a choice one way or the other—either to participate in the program or not—why not structure the choice that will lead to the greatest social good? Sunstein and Thaler call this libertarian benevolence, a corollary to libertarian paternalism. For example, in the United States we have an opt-in policy for organ donation, where you have to actively punch a little tab on your driver’s license in order to consent to having your organs removed in the event of your death. In countries where organ donation is based on an opt-out policy—such as Austria, Belgium, Denmark, Finland, France, Italy, Luxembourg, Norway, Singapore, Slovenia, and Spain—your organs will be harvested in the event of your death unless you actively choose not to allow it. In countries with an opt-out policy, organ donation participation is on the order of over 90 percent, compared to under 20 percent for countries employing the opt-in strategy.27 Here we have preserved freedom of choice, but by altering the default options we have made a significant difference in the social outcome.
Corporations can employ a similar opt-out system. The next step for T.G.I. Friday’s, for example, would be for them to automatically offer customers the Right Portion, Right Price menu and force them to request the menu with the larger portions and higher prices if they want to switch.28 It’s a time-tested system in corporations already, as when companies automatically enroll employees in pension plans. Instead of asking workers if they would like to participate in the company 401(k) plan, for example, the company just automatically enrolls them unless they actively choose to opt out. Companies that have implemented this system have experienced increases in pension plan enrollments as high as 40 percent. A related program automatically withholds money from people’s paychecks, and then gives them a choice of several financial instruments in which to invest that money. This is a libertarian policy because people still have a choice, but it is paternalistic because extensive research shows that most people are clueless when it comes to investing, whereas companies at least consult with investment experts so that all of the choices offered to employees are sound and reliable investment vehicles.
Libertarian paternalism makes a deeper assumption about our nature—that at our core we are moral beings with a deep and intuitive sense about what is right and wrong, and that most of the time most people in most circumstances choose to do the right thing. Under that principle, the default option should be to grant people the libertarian ideal of maximum freedom, while using the best science available to inform the policies that give structure to the minimum number of restrictions on our freedoms. Let’s opt for more freedom and add back restrictions on freedom only where absolutely necessary and with great reluctance.