Untitled on behavioral economics

Two leading behavioral scientists argue we should reject “nudge” policies and stop blaming personal failure for society’s failures 
 
Two decades ago, behavioral economics burst from academia to the halls of power, claiming that correcting individual irrationalities could transform society. The claim, championed by the Obama administration, was that almost any severe societal problem—from retirement planning to climate change—could be healed with the right behavioral bandage. All we had to do was nudge. 
 
It was all very convenient, and false. As behavioral scientists Nick Chater and George Loewenstein show in Title TK, nudge policies rarely work, and divert us from policies that do. For example, nudge-inspired “opt-out” 401(k) programs turn out not to boost saving, and distract from the real source of the retirement crisis: the systematic destruction of pensions.  
 
Title TK shows how across a wide range of issues—from pensions to obesity to climate change—the rich and powerful have pulled off a sleight of hand: blaming individuals for social problems while lobbying to shape the rules in their own favor, with behavioral economics an unwitting accomplice. If we want to solve those problems, we must rewrite the rules  for the common good, rather than try to “fix” the victims of bad policies.  

Nick Chater is a professor of behavioral science at the Warwick Business School. George Loewenstein is the Herbert A. Simon University Professor of Economics and Psychology at Carnegie Mellon University. Both have written and edited a number of books in their respective fields. Chater resides in Oxford, UK, and Loewenstein resides in Pittsburgh, Pennsylvania.