The new Tory ideas and policies which use the concept of social norms and "nudges" are not designed for popular appeal but to demonstrate to the commentariat and other opinion formers that they are genuinely preparing for government. Good. Read George Osborne's three policy proposals (that's right Tory policies; shock, horror) outlined today using advances in the intersection of psychology and economics. The policies are as follows:
1. Get utilities companies to inform its customers on their bills whether they are using above, below, or average amounts of energy for a comparable home size across the country. The logic is that those above will wish to lower their level down to the average and if those below average are given some positive recognition they will not move towards the average. This will lower overall energy consumption, leading to lower prices (less demand) reducing fuel poverty, and reduce national emissions. This sounds like a superb and well thought out bit of public policy. Getting the incentives right is the foundation of quality policy.
2. Pay people to recycle. This applies the Haifa nursery school logic. I like it.
What do you reckon. 1 and 2 good; 3 bad?
9 comments:
i think all three of g. osborne´s policies are rubbish:
ad 1) likely to have no effect whatsoever. just more regulation
ad 2) do we know for sure that recycle is desireable; if it is why doesn´t the market pay for me to recycle.
ad 3) you absolutely right
This is just paternalism; old politics indeed.
Yeah, agreed, I don't see proposal 3 having much effect at all. The danger such policies run is sounding like they have a very low opinion of the mental faculties of the general public indeed. The first two don't feel patronising to me, but the last one does. The idea that people use store cards just because they walk into a store and see a card does seem patronising, and unlikely to be true of very many people.
Lukas: The market doesn't pay people to recycle because it is pretty crap generally at not externalising costs to the environment; that is the whole point of most discussion of green policy.
1. May have no effect but the minnesota example is an interesting one. These non-cash incentives, which do not stigmatise and do not require large amounts of red tape could be interesting. I'd have to see more evidence but theoretically it sounds good.
2. It is commonly thought (and accepted by all three major UK parties) that the benefits to society from recycling are greater than those conferred to the individual. Internalizing this externality is a good thing. Aren't we all pigovians now?
Oh, and the entrepreneurial kids will make some cash. Say the opportunity cost is too high for some people then they can pay somebody to recycle for them and split the government incentive.
The one problem is that recycling is viewed as an ethically positive thing to do, and as such monetrising it may actually have a negative effect.
Once again, more evidence and research required but the theory and outline of the policy seem good.
Internalising externalities, and altering incentives so that it is easier to act to the benefit of society is not paternalism. The store card policy is. I think its patronising, but I can't see how policies 1 and 2 are patronising. Please explain.
The above comment is to Lukas.
Andy, it appears great minds...
Just regarding the reycling: I am just not convinced whether it is really that beneficial to society to get everybody to seperate garbbage in order to recycle it. Everybody assumes it is. I live in Vienna where the whole recycling craze started in the 80s and all the good burghers of town do their bit leading to tremendously high recycling rates. The city goverment got less keen on it because the enviornmental effect are not that clear and it is expensive. I think that "recycling is ethical" creed needs to be supported by facts. Otherwise it is just cant and confromism of the kind JS Mill hated; id est of the worst kind.
And paying people to do it is just giving away other people´s taxes to promote "ethical" behaviour- ergo it is paternalistic. I know that that Tories want to heal our souls and mend the broken society...
I know that there are companies in Germany which seperate garbage to extract the useful stuff. You have to completely privatise waste management; then it will become clear whether recycling is a good way to reduce waste.
lukas -
I think the point on recycling is that under current schemes in the UK fines are imposed for failing to recycle, whereas the Conservative proposal is a shift to the carrot rather than stick approach. I think this is fundamentally good policy, in terms of affecting behaviour (although would like to see stats on it) - and this is irrespective of whether we accept recycling as a necessary good in the first place. I think you're wrong about recycling, but regardless if one assumes that it is something to be encouraged, this is better policy than the status quo.
James -
I'm not sure if I agree with you on the store card issue. I don't think people have a right to instant credit (especially when they may be ill-informed - I think you will accept that store card marketing is often rather dubious) and so don't necessarily see the liberty point as being very relevant.
It isn't seen as patronising for the state to say that you should wear seatbelts, or impose constraints (in the form of taxation etc) on demerit goods such as alcohol or tobacco. We accept that sometimes the state can play a positive role in encouraging 'better' behaviour - what is your principled reason for denying that we could class excess personal debt as a similar demerit good.
I may be wrong in my analysis - if in fact this policy would either not alter behaviour significantly, or the 'problems' of store cards are not as serious as I may imagine, then I will accept that the policy is unnecessary. However, I think it is unfair to immediately brand it as patronising or paternalistic.
Guy,
The problems of personal debt are not out of control in this country. See Chris Dillow and the pdfs he links to on the matter.
If your problem is a lack of information for the consumer, then the provider of the credit needs to provide more ready information. This doesn't necessitate vast amounts of red tape, simply the terms of the credit agreement need to be laid out in a simple and open fashion (which I believe they already generally are).
On top of this, I don't think this policy would actually affect personal debt levels in the UK in a measurable way. In this manner it is a poor policy for anything other than aroma. The Tories want to make an issue of government debt and link personal debt to it. They want to seem like they are taking "tough" action, even if it will be useless.
Ease of access to credit should be expanded if the benefits of capitalism are going to fully benefit all and not just those who can be termed "capitalists". Policies to limit ease of access are not only wrongheaded but are the worst form of paternalism. The idea is that poorer people are not capable of handling a credit agreement so the State will stop them getting them, for their own good.
It is a policy to tackle a non-existent problem, in a manner which will have zero impact, in a style which is unpleasant.
So pleased the Tories are coming out with their policies. Something to get my claws into.
P.S. this broken society stuff is an embarrassment. You know society isn't broken, I know it isn't, DC knows it isn't. Truly vile.
Yes, I see your point, and am more than happy to admit that if either a) levels personal debt is not a serious issue or, b) the policy would not have measurable effect, then it is wrong. These are empirical questions, to which I'm not sure of the answers.
On point about paternalism - would you cede my point that in many cases store cards are marketed dubiously and targeted at 'vulnerable' people? If so then I am happy to be paternalistic in this case - sometimes the state does know best, and this is nothing to do with the state stopping poorer people getting access to credit (which obviously is a good thing usually).
On broken society - while yes we all probably know that society isn't broken, I think the rhetoric is in line with how much of the public thinks - ie. the country has gone to the dogs (rising crime/anti-social behaviour/the demise of the family unit etc etc). As such it is good politics if not good policy.
I can see your point about store cards, but my suggestion about regulation to do with how they are marketed is a much better, less intrusive, more helpful, and less patronizing policy.
On the broken society you are right. It is bad policy. It is shame less because everybody with a clue knows that society isn't broken. Its populist and that's why you say its good politics. Well to me that is venal politics, playing on people's misconceived fears and not even improving their situations. Really rather repellent.
Good for votes, bad for the country, terrible for the discourse, disastrous for the soul.
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