Libertarian Welfarism

Abstract:     
In a series of publications, Cass Sunstein & Richard Thaler, and Colin Camerer et al., have proposed an approach to legal policy that encourages individuals to pursue actions that will maximize their expected utility while not imposing on those individuals' decisional autonomy. In this article, forthcoming in the California Law Review, I contend that this policy approach - which has been called "libertarian paternalism" - implies a complementary approach as well, which I call "libertarian welfarism." Libertarian welfarism relies on the same set of policy tools as does libertarian paternalism but with a different goal: to encourage individuals to act in a way that maximizes social welfare. I show that libertarian welfarism leads to different policy prescriptions than does libertarian paternalism, and I argue that the former approach rests on a stronger normative foundation and is less subject to problems of indeterminacy than the latter.

Keywords: behavioral law and economics, libertarian paternalism, asymmetric paternalism

Working Paper Series