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Austrian Economics and the New Paternalism

Daniel M. Hausman (Rutgers University, NJ, USA)

Contemporary Methods and Austrian Economics

ISBN: 978-1-80262-288-1, eISBN: 978-1-80262-287-4

Publication date: 27 January 2022

Abstract

In the work of von Mises and Rothbard one can find a case for a strong presumption against traditional coercive paternalist policies. Coercion is generally undesirable, and legislators and bureaucrats cannot know what is best for each agent. Not all of the traditional case against paternalism applies to the new libertarian paternalism espoused by behavioral economists and popularized in Sunstein’s and Thaler’s Nudge. There is no way to rule out the possibility that legislators sometimes know better than agents what generally benefits them, and that they can impose feasible regulations that do not limit important freedom and whose costs and risks do not outweigh their benefits. Paternalism is not a bugbear to be avoided at all costs. There’s good reason for skepticism about its virtue and feasibility but no justification for its blanket condemnation.

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Acknowledgements

Acknowledgments

Sections 2 and 3 of this essay derive from D. Hausman and B. Welch (2010) and D. Hausman (2018). I am also grateful for criticisms and suggestions from Jason Aimone, Sean Hargraves-Heap, and an anonymous referee.

Citation

Hausman, D.M. (2022), "Austrian Economics and the New Paternalism", D'Amico, D.J. and Martin, A.G. (Ed.) Contemporary Methods and Austrian Economics (Advances in Austrian Economics, Vol. 26), Emerald Publishing Limited, Leeds, pp. 1-16. https://doi.org/10.1108/S1529-213420220000026001

Publisher

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Emerald Publishing Limited