22 August 2017
Bo Harald

Good for society at large

Bo Harald - ZEF, Transmeri, Real Time Economy Program

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Nudge - not enough

24 October 2009  |  2408 views  |  0

Started to read Nudge by Thaler & Sunstein. Easy and nice reading - essential thought provocation needed at the latest now.  

What we have is a long list of very serious global challenges - ranging from global warming (which is furthered by unfettered blind growth) to financing of welfare structures (which is coming out of productive and successful enterprises). What we do not have is a wide enough awareness of the fact that it is the sum of every individual's choices that matters.

Even where this picture is clear it is far from agreed what measures should be taken to guide these choices in a way that does hurt the individual less directly and save the planet from some of the further disasters.

Even when the methods are worked out it is very seldom possible to get them politically accepted and implemented as politicians have to be re-elected and media far too often - for quarterly capitalistic reasons - search out and make big fuss about those who resist change (instead of educating the public). Fabricated drama sells even more than just scaring people with bad news. Unfortunately all the killer bees, year 2000 planes falling out of the skies, swine flues etc stories have caused the healthy media skepticism to become unhealthy - the so much needed and before respected watchdog is increasingly seen as a purely selfish spammer.  

Maybe this all is why the writers underline the right of choice for the individual and recommend very gentle and invisible nudging to steer individual behavior into the direction of their own immediate interest (example: 60% of Americans are obese or overweight). Naturally I agree that this "choice architecture" should be built into just-about-everything and feel that the risk of somebody may be overdoing it is smaller than under-doing these days. But I do not think it is going to be even nearly enough.

What we need is a clear, just and transparent pricing. You pay visibly - and upfront for whatever you do - and the harmful for you and the environment should today be even clearly overpriced. Monetary incentives can and often should be given when investments are needed. The need for transparence, sticks and carrots is demonstrated by the failure of emission rights trade. It is not leading to intended results as much of the rights have been obtained for free - and have thus not incentived the industry to invest enough. The markets in any case spread the cost and pass them on to endusers irrespective of how the energy has been produced - no sticks - no carrots - no effect. My own experience from 30 years of banking and now also from other areas (latest one e-invoicing)  tells me that even big carrots are not leading to fast change - "never underestimate the power of inertia" - but even small sticks work wonder.  Partly surely because the consumer gets irritated (I am not going to pay those bastards more..). Much fired up as media and consumer ombudsmen (they too often do protect costs - not consumers..) take the populists' side. But surely also because a growing number of people understand that this is just and needed. If they can help their service providers or the public sector to save costs and environment - they stand a chance to get lower costs, lower taxes and less emissions.   

So we need brave decision makers - and visible support for them. Maybe it is time for a new Facebook Cause: "You pay anyway - why not visibly?"

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