Nudge Paternalism

“Most university students do not get enough exercise due to various biases in their decision-making process. Universities should automatically enrol students in a gym membership (increasing their fees by the price of the membership), and allow them to opt out if they wish by turning in a form.” Discuss.

There are on-going normative debates on policy-making and government intervention in citizen’s choices which impede upon liberty in forms of freedom and autonomy. In this essay I aim to provide a brief argument against Paternalism and an evaluation of Nudge Paternalism, as a means to emphasize the advantages of this softer form of paternalism, despite its violation on autonomy, as opposed to complete ‘laisser-faire’. I will conclude
I will present Aggregate Welfare as behavioural economists’ approach to Paternalism and point out its problem before explaining the case of Perfectionism and Asymmetric Paternalism, which strongly encourage policies such as the ‘automatic enrolment of university students in gym membership, whilst allowing the option of opting out by turning in a form’.
Aggregate welfare assumes that individual preferences are homogenous and policy makers can maximize welfare by promoting certain choices and condemning others. Yet the problem arises due to the heterogeneity of individuals, i.e. the retirement savings plan example which I assume the reader to be familiar with – consumption smoothing might not apply to some people who are maximizing their welfare by not saving for the future due to a strong preference for present consumption over future
select default options that coincide with the goals that policy makers perceive as favourable. This contradicts the Anti-Perfectionism account that aims to help individuals realize their existing goals without questioning what these goals are. Automatic gym enrolment for instance is a perfectionist policy because it is beneficial for students’ overall health, which is conducive to better academic performance – a goal that is seen as desirable by policy makers – but it is implemented without the student’s consent. One can respond to the anti-perfectionists that this policy helps people achieve their existing goal of better health. Asymmetric Paternalists aim to help people avoid mistakes but at the same time they do not want to disadvantage people for whom the ‘suboptimal’ choice is welfare maximizing. The option to opt-out in the automatic enrolment allows students who maximize their wellbeing by not pursuing general health but instead for example spending the money refunded from their tuition fees on food and drink, to maximize their own welfare at a low cost of turning in a form. Hence it is argued that there is an absence of substantial interference with individual choice and that Libertarian Paternalism maintains