The nanny state is in the news. A lot of people have been outraged by Mayor Michael Bloomberg’s effort to restrict soda sizes, recently overturned by a state court, and some people do not much like his proposal to ban cigarette displays in New York stores. If you share the outrage, you should recognize that various forms of paternalism are all around you, and at least some of them aren’t so bad.

Last year, new government regulations required automobile companies to increase the fuel economy of their cars, to a point where the fleet-wide average must exceed 50 miles per gallon by 2025. True, those regulations will reduce air pollution and promote energy independence, but the majority of the benefits come in the form of gas savings for consumers. For those who abhor paternalism, here’s the problem: Consumers can already buy high MPG cars, and many of them just aren’t doing so, even though they might well save money over the life of the vehicle. If the government is making the fleet a lot more fuel-efficient than consumers demand, is it operating as the national nanny, or the Gasoline Police? Should people be outraged about that?

Paternalism comes in a lot of shapes and sizes, and to come to terms with it, we need to offer a working definition. What seems to unify paternalistic approaches, however diverse, is that government does not believe that people’s choices will promote their welfare, and it is taking steps to influence or alter people’s choices for their own good.

We should immediately distinguish between paternalism about means and paternalism about ends. Means paternalism is like a GPS. You can ignore what the GPS says and try your own route, but if you do so, there is a serious risk that you will get lost. To return to the fuel efficiency example: means paternalists would steer consumers in the direction of considering all relevant costs at the time of purchase, certainly by providing relevant information, and if a fuel economy mandate would help consumers on balance, they would be willing to consider it.

Ends paternalists have more ambitious goals. They might think, for example, that chastity or living a long, healthy life is what is most important, and that even if you disagree, they should steer you toward chastity or longevity. Ends paternalism obviously raises more serious objections than means paternalism, which is designed to ensure that people will end up with what they actually want.

In some contexts, there is a lot to be said on behalf of means paternalism, so long as it is undertaken with caution and care, and is genuinely respectful of people’s actual goals. To understand this point and its limits, we need to get clear on the best objections to paternalism. The first objection has to do with people’s welfare. People might really enjoy running, sleeping, having sex, singing, jumping, smoking, drinking, gambling, or (over)eating. They might have their own views about how, exactly, to go about enjoying those activities. So long as they are not harming others, aren’t their own judgments the best guide to what will make their lives go well?

While the question is legitimate, it should not be taken as rhetorical. As behavioral economists have been emphasizing, human beings err, and our mistakes can certainly impair our welfare; they can even shorten our lives. But mistakes are instructive, and life is a movie, not a snapshot. To the committed antipaternalist, government should not short-circuit the valuable process of learning by doing. If people make mistakes about diets, drinks, love, or investments, they can obtain valuable lessons, and those lessons can make their lives a lot better.

In addition, public officials have their own biases and motivations. Most officials try to do the right thing, but no one can deny that at some times and places, official judgments can be distorted by the pressures imposed by powerful interests. And even if they are well-motivated, officials are human and hardly immune to the kinds of behavioral biases that affect ordinary people.

There is a final objection. In a market economy, companies compete with one another, and people are free to choose among a wide range of options. If a car has terrible fuel economy, and if it costs a lot of money to operate, fewer people will buy it. As a result, companies will produce more fuel-efficient cars. Some consumers may be fooled or tricked, but in the long run, free competition and open markets will help. On this view, paternalism presents a major risk, because it may freeze the process of competition.

These objections have a lot of force. It is true that paternalism can freeze competition. But it need not do so; consider fuel economy standards, which are based on fleet-wide averages and contemplate a great deal of market competition across car companies and vehicle models. And even if we are inclined to think that individuals are generally the best judges of how to make their own lives go well, the word generally is important. With that qualification, we can see that the objections to paternalism depend on some empirical judgments. Those judgments might be wrong. Do people’s choices always promote their welfare? That question cannot be answered with intuitions and anecdotes. The relationship between freedom of choice and welfare is being tested, with complex results. Sometimes people’s means do not promote their own ends.

Behavioral economists have identified a number of reasons that people’s choices do not always promote their welfare. Inertia is a powerful force; sometimes we fail to take steps that really are in our interest. Human beings often procrastinate, and the long-term may not be so salient to us. We can be tempted by emotional appeals. Sometimes we do not take steps that would make our lives go a lot better. If welfare is our guide, means paternalism might be required, not forbidden. Consider people’s occasionally foolish decisions not to take precautions against financial risks (perhaps by failing to save for retirement) or health hazards (perhaps by failing to exercise or have a proper diet).

Here’s a simple but striking example of the possibility that paternalism can actually increase people’s welfare. We would ordinarily expect people to be worse off if government makes it more expensive for them to purchase goods that they want. If government tells you that you have to spend more to buy a computer, a lamp, or a pair of shoes, your life will hardly be better. But empirical work suggests that there are exceptions. More specifically, cigarettes taxes appear to make smokers happier.1 To the extent that this is so, it is because smokers tend to be less happy because they smoke. When they are taxed, they smoke less and might even quit, and they are better off as a result.

For various reasons, including its addictive nature, smoking is a highly unusual activity. In light of the risks of error and abuse, we have to be careful in generalizing from it. But the broader point is that in some cases, there can be real space between anticipated welfare and actual experience, leaving room for a paternalism that respects people’s ends. The most modest forms of paternalism may well be best; they include disclosure, warnings, and default rules (such as automatic enrollment in savings plans). Nudges of this kind may well make people’s lives go better.

Suppose that we are not so focused on welfare and that we believe that freedom of choice has a special and independent status. We might think that people have a right to choose, even if their choices cause harm, and that government cannot legitimately intrude on that right, even if it does in fact know best. If people want to buy twenty-four-ounce sodas, energy-inefficient refrigerators, or cars that have terrible fuel economy, they are entitled to do just that. If they want to gamble or smoke, to spend their money rather than save it, or to exercise just once a year, the government has no business intervening (at least if other people are not harmed).

One version of this position suggests that freedom of choice is an ingredient in welfare, indeed an important one. If the government tells people that they have to save money for retirement, cannot eat fatty foods, must not talk on their cell phone while driving, or have to buckle their seatbelts, it may make them frustrated and angry. If so, government has to give careful attention to that problem.

Another version of this position is that freedom of choice is not merely an ingredient in welfare but an end in itself, and thus a kind of trump card. Many of the most deeply felt objections to paternalism are based on an intuition or judgment of this kind. They often take the form of a question: By what right can government legitimately interfere with the choices of free adults?

It is important to emphasize that even if these points are compelling in the abstract, they are not decisive in all cases. Education, disclosure policies, and official warnings should not be out of bounds. Many employers (both private and public) automatically enroll employees in certain pension plans; but you rarely hear employees objecting that such enrollments are insulting to their autonomy. We should be able to agree that insofar as government is respecting people’s ends, preserving freedom of choice, or both, the grounds for reasonable objection are greatly weakened.

No one should deny that freedom of choice is a central part of a good life. Paternalism can be a serious mistake, especially if it eliminates that form of freedom and overrides people’s judgments about their own ends. Education, warnings, and other nudges usually have big advantages over mandates and bans, precisely because they allow people to go their own way. But legitimate concerns about illegitimate paternalism should not be allowed to prevent officials from seeking to identify the best ways to improve people’s lives, even if they end up influencing people’s choices.

  1. Do Cigarette Taxes Make Smokers Happier?, By Jonathan H. Gruber & Sendhil Mullainathan