I read the rest of my way through Daniel Kahnneman’s Thinking, Fast and Slow during the rest of the plane ride to the UK. A fascinating book and worth the read but it did not disappoint in its eventual anti-market bias. Economic theory, which began as a theory of why markets are the road to growth and prosperity has now largely become a subject devoted to explaining why market based solutions are frequently if not even usually sub optimal.
It’s a dangerous book, and if we are looking for an anti-Enlightenment tract you would not need to go far from this book. Essentially the message is that leaving our own lives to ourselves to manage as best we can, with such self-management the optimal approach politically, socially and economically, has major limitations. Because we are exposed to reasons to believe that we are easily misled by our own prejudices and uninformed zones of bias, there is a need for limits on our right to choose our own lives for ourselves. This is from the conclusion:
Although Humans are not irrational, they often need help to make more accurate judgments and better decisions, and in some cases policies and institutions can help. These claims seem innocuous, but in fact they are quite controversial. As interpreted by the important Chicago school of economics, faith in human rationality is closely linked to an ideology in which it is unnecessary and even immoral to protect people against their choices. Rational people should be free, and the should be responsible for taking care of themselves. Milton Friedman, the leading figure in that school, expressed this view in the title of one of his popular books: Free to Choose. (p 411)
The answer is “libertarian paternalism” to this mis-statement of Friedman’s position. I can only say that anyone who accepts the words “libertarian paternalism” as a basis for policy is a more likely to stress the paternalism side ahead of the the libertarian. A lot more.