99 Nw. U. L. Rev. 1245 (2004-2005)
Libertarian Paternalism Is an Oxymoron

handle is hein.journals/illlr99 and id is 1255 raw text is: Copyright 2005 by Northwestern University, School of Law                    Printed in U.S.A.
Northwestern University Law Review                                           Vol. 99, No. 3
Review Essay
LIBERTARIAN PATERNALISM IS AN OXYMORON
Gregory Mitchei
I.   THE EVITABILITY OF CHOICE-FRAMING PATERNALISM ....................................... 1248
II.  USING PATERNALISM TO MAXIMIZE LIBERTY, NOT WELFARE ............................ 1260
III. THE REDISTRIBUTIVE CONSEQUENCES OF LIBERTARIAN PATERNALISM .............. 1269
IV .  C ONCLU SIO N  ......................................................................................................  1276
In Libertarian Paternalism Is Not an Oxymoron, Professors Sunstein
and Thaler set out to show that state control over the structure of choice op-
tions can improve the welfare of citizens without reducing personal auton-
omy.t A public or private institution that adopts the perspective of the
libertarian paternalist will steer people's choice in directions that will
improve the choosers' own welfare but will not prescribe or proscribe any
particular choices.2 This limited regulation of choice behavior should be
* Associate Professor, Florida State University College of Law, and Visiting Associate Professor,
University of Virginia School of Law. The author may be contacted by e-mail at gmitchel@law.fsu.edu
or by regular mail at Florida State University College of Law, 425 West Jefferson Street, Tallahassee,
Florida 32306-1601. I appreciate the helpful comments on a draft by participants in the N.Y.U. Collo-
quium on Market Institutions and Economic Processes, Amitai Aviram, Paul Edelman, Chris Guthrie,
Steve Hetcher, Adam Hirsch, Jon Klick, Mae Kuykendall, Peter Oh, Jim Rossi, Phil Tetlock, Mike Van-
denbergh, and particularly Richard Thaler.
I See Cass R. Sunstein & Richard H. Thaler, Libertarian Paternalism Is Not an Oxymoron, 70 U.
Cm. L. REV. 1159, 1160 (2003) (We propose a form of paternalism, libertarian in spirit, that should be
acceptable to those who are firmly committed to freedom of choice on grounds of either autonomy or
welfare.). Despite its newness, the libertarian paternalism concept has already been cited to discount
libertarian concerns about paternalistic proposals generated from behavioral economics analyses. See
Michael Pereira, Risk Management for the Age ofInformation, 9 FORDHAM J. CORP. FIN. L. 715, 758
(2003) (reviewing ROBERT J. SHILLER, THE NEW FINANCIAL ORDER: RISK IN THE 21ST CENTURY
(2003)) (An emerging strain of scholarship offers a means of reconciling intervention in individual
choices with a concern for autonomy. The idea, known variously as 'asymmetric paternalism' or 'liber-
tarian paternalism,' suggests that planners (government or private) can increase social welfare by setting
default rules that create benefits for those who make errors but impose little or no harm on those who are
fully rational.).
Thaler and Sunstein also published a shorter essay on libertarian paternalism for an economic audi-
ence. Richard H. Thaler & Cass R. Sunstein, Libertarian Paternalism, 93 AM. ECON. REV. 175, 175
(2003). My comments focus on the more detailed discussion of libertarian paternalism found in the
University of Chicago Law Review article.
2 See Sunstein & Thaler, supra note 1, at 1162. Sunstein and Thaler encourage planners within
both public and private institutions to design choice settings in ways that steer people in welfare-

1245

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