Why I have reservations about the "Nudge" philosophy

Article by Philip Booth on ConservativeHome

I have various reservations about the Nudge philosophy that has been embraced by David Cameron. It is clearly attractive to the Conservatives because it seems novel without appearing to smack of market fundamentalism - and the Conservatives seem unable or unwilling to make the case for liberating the market economy directly.

One reservation that I have about “Nudge” is not about the basic underlying idea, but about the likely flaws in implementation. The authors of "Nudge" clearly intend that their proposals should be an alternative to state regulation, but it is difficult to see them being implemented that way in practice. For example, in the pensions field, auto-enrolment into personal accounts is going to be used in addition to all the current government interference in the provision of pensions: we will still have a government-provided state pension, a “second state pension”, continued regulation and tax relief. In addition to all this, people will be auto-enrolled into saving through personal accounts.

A second problem is that of who decides the direction in which to nudge people. The political elite, for example, wish to nudge the young to take out pensions but this risks making pension mis-selling com