The American legal scholar Cass Sunstein has become one of the most influential non-economists toiling in the world of economics. Over the course of his career, his interests arced from constitutional law to a pioneering synthesis of behavioral economics and public policy developed in concert with the economist Richard Thaler. Originally called “libertarian paternalism,” the Sunstein-Thaler approach stresses the fact human choices can’t help but be influenced by the way those choices are framed.
In other words, little details matter a great deal. A candidate listed at the top of a ballot tends to get more votes, just because she’s at the top. Participation in pension plans tends to be higher if people are automatically enrolled. If you place fruit ahead of dessert in a cafeteria line, people eat more fruit than they otherwise would have. It all falls under the Sunstein-Thaler idea of “choice architecture.” Since such influence can’t be avoided, policy makers may as well use it to try to help people make decisions that are generally pretty good. That’s the short version of the 2008 best-seller Nudge, co-authored by the two academics.
In his new book Choosing not to Choose, Sunstein zeroes in on a particular kind of nudge, a default setting, which is extraordinarily effective at shaping outcomes. He argues that defaults are perhaps the best of all nudges. For one thing, they can always be over-ridden, thereby preserving the ability to choose. They also, he says, preserve a certain kind of liberty that people lose when they’re forced to make a decision: the freedom not to choose. What follows are edited excerpts of Sunstein’s conversation with Quartz, when he stopped by recently.
Quartz: Your new book, Choosing Not to Choose, is a really succinct, clear primer—and almost a treatise—on default settings. How is this book related to Nudge? A cynic might say, “Well it sounds better to say you’re allowing people to choose not to choose rather than to be nudging them toward something.”
Cass Sunstein: It’s closely related [to Nudge]. So, one thing I was very struck by after the publication of Nudge—both in academic circles and also in popular circles—was the objection that nudging is paternalistic or intrusive. That often developed—in at least some of the best criticisms—into the suggestion that what you want is not people to be nudged, but for people to make a choice. So instead of, say, having automatic enrollment in a retirement plan or healthcare plan… just tell them, “You can’t work here until you choose what you want.” Or instead of having people being presumed to be organ donors as they are in many nations in Europe—or presumed not to be as they are in the United States—say, “You can’t get a driver’s license unless you say what your preference is for organ donation.”
What struck me as powerful and interesting in these objections to Nudge was that they’re doing something that bears on daily life, but also that has philosophical depth in a way that’s really interesting rather than dead as some philosophical questions seem. It’s really interesting to think when should people be making choices, and when should people be able to live their lives and say, “the default rule is good enough I want to focus on…”
…What’s important to me.
So it seemed to me that it was worth spending some time and focusing on the question: “When should you have the opportunity to choose, which a nudge preserves? And when should you be asked to exercise that opportunity, which choosing itself does?”
In the book, you make the counterargument to those who might have suggested that Nudge was paternalistic. You kind-of say: “No, no actually you’re the one being paternalistic, because you’re saying ‘it’s good for you to choose, therefore you should have to do it.'”
You’re right. The book has a little bit of a—what’s the right word—a little bit of an aggressive response to the people who say, “It’s paternalistic to nudge people.” The view “force people to choose,” that is a paternalistic claim when people don’t want to choose.
One of the concrete examples of the power defaults that I experience in everyday life is New York City taxicab tipping, in which relatively newly installed credit card machines now have 20% set as the minimum, which is way more than I used to pay. But I always pay 20% because I don’t know how to change it. And I don’t want to ask the guy, because I don’t want to come off like a cheapskate. Is that why defaults work, in part?
It’s a fantastic example because we have data on the impact and we have some semblance of the reasons for the impact. So the impact of the 20%, 25%, 30% default setting has been to increase tips in New York City by 10%. And that means if a cab driver is earning $6,000 a year in tips there’s a $600 immediate raise. And that’s not by being a better driver or being nicer or the economy booming, it’s just the different default setting.
There are couple of things going on. I think for people in cabs one thing they want to do is not think hard before they get out of the cab. And if you can just touch a screen and [pay] 20%, that’s a lot better than having to put in manually 15%. So one reason defaults stick is that people are busy. They don’t want to spend time thinking about the tip, just like they don’t want to spend time thinking about what’s the best retirement and healthcare plan and how should they enroll their children in one or another program. So [it’s] inertia and—you may think of it as—an effort tax which we’re all subject to when we’re exiting a cab.
Default settings also, and the way you describe it fits this beautifully, they establish a social norm. So if the norm is 20%, 25% or 30% you feel like a creep putting 15%.
Obscure but powerful
You had a front-row seat [to policy-making] when you were head of the White House Office of Information and Regulatory Affairs in the Obama administration. My understanding of that job is essentially that you are taking the rule-makings and regulations that come up through the executive branch and kind of make sure they align with the president’s thinking and priorities. Is that about right?
Yeah, that’s very close. So president Reagan really created the office in its current form… and it has the authority to say no to regulations subject to the president’s ultimate power of decision and subject to internal processes… That gives the head of the office considerable authority to help shape where you’re going to see regulation and whether you’re going to see regulation.
It’s been described as “obscure but powerful.”
It’s a terrific job… So you can shape—subject to the team of which you’re just a member—you can shape what the regulatory output looks like. You can draw on cost-benefit analysis, you can draw on behavioral economics, and if the group of people who are in the executive office of the president and the agencies are agreeable, you can have some very major impacts… It was unquestionably the job I most wanted.
You mentioned in your book one thing, [which] was an issue that came up while you were in that job, that deals with the notion of defaults. And it had something to do with free school lunch programs, and children who qualified, but didn’t sign up or their parents didn’t sign them up.
So there’s a lunch program where poor kids in the United States get to eat for free lunch and breakfast. It’s a very important program. The idea is that in the US poor children should be able to eat a nutritious meal. And a lot of kids haven’t been in the program because their parents haven’t signed them up.
So they qualify on a financial basis?
Completely eligible. But their parents haven’t signed them up. Now you might ask why haven’t they signed them up. We don’t have a full answer. It has something to do with confusion, busyness, fear.
Why would they be scared? Perhaps if they’re illegal immigrants or something like that?
Even if they’re legal, the government is asking them to fill out forms. What’s this about? It’s a little like if you get a notice from the Internal Revenue Service, your heart might start racing. You might have some fear. So, we don’t know what the reasons are exactly. But we know that a lot of people haven’t signed up. So Congress enacted a law that authorized the Department of Agriculture to adopt what are called direct certification programs, where if the locality or the state knows these kids are eligible … they’re right in. They’re getting the food. They’re in by default. And that program has gotten millions of children nutritious food that they wouldn’t otherwise get. So I think that’s a spectacular success story.
An example that’s in the same general family, not something I was involved in any way, but Oregon fairly recently made citizens that it knows are eligible to vote, automatically registered. You can opt out, but they’re voters by default. If you’re a citizen of Oregon, and you’re eligible, then you’re registered to vote … I think we should be thinking a lot more about areas where people are eligible for certain benefits and it could be a great boon to them if they’re just automatically in.
You grew up in Massachusetts, is that right?
Waban, Massachusetts—W-A-B-A-N—and that’s not a Boston pronunciation of Woburn—W-O-B-U-R-N. There actually is a place called Waban.
I always ask what people’s father did for a living.
So, my dad was a contractor. He had a little contracting company in Massachusetts that built homes. And he was very proud of that. And he was and I am. He built places all over Acton, Massachussetts.
So like the post-war housing boom?
A little later. In the ’60s and ’70s … I remember one thing that made a big impact on me growing up, was my dad had some rentals. People who couldn’t buy the homes and he would rent them out. And he had some rentals to people who couldn’t pay. And this was not good that my dad didn’t get the money. And while we were not poor, it was not good to be supporting housing when you’re not getting any cash flow from those families. And my mother said, “You’ve got to kick them out or make them pay.” And my dad was a very kind and generous person, so if they couldn’t pay, they didn’t have to pay.
There were some arguments at the dinner table between my mother and father. And I was struck both by my mother’s sense that, they can’t just live in your place and not pay—which was pretty reasonable. And my dad’s, I think in the end convincing, argument: They can’t afford it and we’ll let them stay.
You clerked with Supreme Court Justice Thurgood Marshall. What was he like?
He was very, very quick. He had a sense of the human reality of the cases, which he could size up in an instant partly because because he had been a trial lawyer. He was a repository of experience such as the human race rarely has. In the sense that he had been a lower court judge, a Supreme Court justice, solicitor general of the United States and the most successful supreme court advocate probably in the court’s history—at the point when the court was arguably more significant than at any time in the nation’s history.
So he argued and kind of conceptualized Brown v. Board of Education and he had at the top of his mind, it seemed, stories and anecdotes about the early civil rights days. He knew Martin Luther King, he had been on the phone with Roosevelt. He knew Johnson very, very well. He knew the Kennedys. So he was like a walking history book. But also someone who could read a brief and say, “I know what’s really going on here.” And there were some cases where the briefs wouldn’t capture what he knew was going on. And he would ask us, why don’t you do a little digging. And he was always right.
You had a couple great turns of phrases in the book that relate to possible downsides to default settings. One of them is “the architecture of serendipity,” which I like because it would also be a good name for a jam band. There’s also “Pandora-ization.” And these are both sort of about the risk that allowing default settings to do too much can narrow our experiences. Is that fair?
Completely. If you look at a great city, one of its amazing features is that you’re going to find all sorts of things that you might not specifically have have chosen in advance. And they will change your day. Maybe your month. Maybe your whole life. There’s a fantastic play, now playing that’s about to come to Broadway called Hamilton. And the author of the play got the idea for the play because serendipitously he picked up a book on Hamilton in a book store. He read it. And thought after two chapters it would make a musical. And now we’re going to have, I think, one of the great musicals of our time.
Now if you have an architecture of control, let’s say, where you select in advance everything that’s going to affect your life, then you’re going to live in a very small world that will have an echo chamber feature… Pandora, which I love, actually feeds into that. So, I confess I’m a big fan of Taylor Swift.
Everyone’s a big fan of Taylor Swift. I have a Taylor Swift station. And there’s a lot of Taylor Swift songs not surprisingly on that station. And [the other ones] kind of sound like Taylor Swift. But it’s also good to see and hear things other than those you would have chosen in your Pandora.
Man cannot live on Taylor Swift alone.
He cannot live on Taylor Swift alone. You need a little Kanye West, and that architecture of serendipity, which is I think is overlooked as part of what a democratic society needs, it’s at risk when people have the capacity to create communication systems of their own devising….One thing an individual life needs, is say, an optimal amount of serendipity.
What are you reading right now?
A number of books. The book on Hamilton… it’s an incredible story. So I’m reading that and quite liking that. I’m also reading a book called Touch by Claire North, which is a kind of science fiction book that has tremendous depth and humanity. Of the six or so books that are on my Kindle now, Touch by Claire North and Chernow’s Hamilton.
What are you going to write next? Without giving away too much.
I have two in process. One is a book on the ethical issues associated with nudging and choice architecture—with a lot of discussion of the line between legitimate nudging and manipulation. That one is well along. I have a degree of confidence that it will be completed this summer. And another one that I’m definitely completing—I’m in page proofs now—is a book called Constitutional Personae.
Like Dramatis Personae?
Completely. I won’t say much more. Except there are only four of the personae and they are heroes, soldiers, minimalists and mutes.