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The silly season and political spin have collided to produce a claim that a new idea is sweeping through the political classes. It is the latest political theory from the United States which is set out in the book Nudge, by Richard Thaler and Cass Sunstein who are academics at at Chicago Graduate School of Business and Harvard respectively. They are suddenly on the agenda because their book was on the summer reading list helpfully passed round Conservative MPs by Opposition leader David Cameron. He is rather late to jump on the bandwagon; the book's authors are advisers to US Democrat presidential candidate Barack Obama. But the book has taken hold; during a recent visit to the Bank of England by The MJ, a high-powered City banker was spotted clutching a well-thumbed copy. So what's it all about? At its root are two debates; firstly whether people are predisposed to do good which has occupied philosophers for hundreds of years. The second is how much the state should interfere in people's lives. The ‘right' answers are modern alchemy: how many companies and governments would pay handsomely for a way to hotwire the choices people make? The ‘new' thinking is part of a three-way battle between behavioural psychologists, economists and behavioural economists, who are the new kids on the block, over the way people make decisions. The behavioural psychologists argue people will take the option involving the least effort and provides the highest payoff. They say humans make decisions mostly based on emotions rather than pure numbers. Economists believe people are selfish and make rational deicisions on ‘whether the number stack'. Behavioural economists berate people for failing to do the numbers before making a decision. They are growing in influence: Nobel prize winner Daniel Kahneman is counted in their number. The Office of Fair Trading has launched a behavioural economics unit and the National Audit Office has urged more Government agencies to take on board their approach. The idea of nudging is simple. Thaler and Sunstein argue that lazy people who make bad choices can be subtly ‘nudged' to change their behaviour. They call it libertarian paternalism. A family generating too much waste should receive a council leaflet pointing out how much less the average family produces. Placing fruit at eye level in a school canteen will nudge children into healthy eating, banning junk food will not. It works in reverse at supermarket checkouts and big stores have long perfected the art of persuading people to spend more than they intended through ‘choice architecture'. Thaler and Sunstein say: ‘[It is] a relatively weak, soft, and non-intrusive type of paternalism where choices are not blocked, fenced off, or significantly burdened. A philosophic approach to governance, public or private, to help homo sapiens who want to make choices that improve their lives, without infringing on the liberty of others. ‘In many domains, including environmental protection, family law, and school choice, we will be arguing that better governance requires less in the way of government coercion and constraint, and more in the way of freedom to choose. If incentives and nudges replace requirements and bans, government will be both smaller and more modest'. Academics are divided: some say it's nothing new and point to Malcolm Gladwell's bestseller The Tipping Point which raised similar examples such as New York's policy of stopping areas decaying further by fixing broken windows and tackling graffiti. Other's question why, if the magic bullet is that easy to achieve, no-one's had done it before. The counter argument is that people are far too complex to be kidded. What's the reaction from the British politicos? David Cameron's enthusiasm is because he believes it can square the circle: the state changes destructive or expensive behaviour, gets people to give back to their communities or save the planet while avoiding the ‘nanny state'. It allows him to be a paternalistic, one nation Conservative and Thatcherite at the same time. Shadow chancellor George Osborne says: ‘The Government's approach is an old-fashioned one: use the threat of fines and punitive taxation to force people to recycle. We've all seen how unpopular this heavy-handed approach has been with the public. Instead of using sticks we can use carrots.' The critics argue what you are left with is the cold dead hand of the state still present in people's lives in a more dishonest way. Danny Alexander, the Liberal Democrat MP, said: ‘it's more about a stealthy way of doing politics than being straight with people. Is Gordon nudging? - No10 media statement: ‘Corner shops in deprived areas will be given help to sell more fruit and veg in a Government drive to get people eating more healthily and tackle the rising problem of obesity. - ‘The Department of Health will be providing £200,000 this year and £300,000 for each of the following two years to help local convenience stores buy new shelving, chiller cabinets and promotional materials to encourage local people to eat more healthily.' ‘Rather than being explicit about what will happen, it seems to want to lead people to "where we want them to go". I think that's illiberal and the kind of lack of transparency that turns people off politics.' Communities secretary Hazel Blears, who you would think would be a fan, was less than enthusiastic. ‘Every now and then a book pops up which everyone talks about for a while in the Westminster bubble: Freakonomics, The Wisdom of Crowds, The Tipping Point. Nudge is the latest fad,' she said. ‘Each of these books may help us understand an issue or challenge us to think a little differently. Governments can set a framework in which people will want to behave decently. But the harsh reality is that none can provide a blueprint for a better world. Politics is never that easy.' How nudging works: Tax collectors in Minnesota had tried for years to get people to get their returns in on time. Fines and advice leaflets had failed. They then promoted the fact that most Minnesotans had already filled in their returns. The result? The number of returns sky-rocketed. Where could this work for you? Bins and recycling Reducing traffic speeds Obesity Also read Yes - 50 secrets from the science of persuasion - Noah Goldstein et al The Tipping Point - Malcolm Gladwell

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WHITEHALL

Nudging towards a better society

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