Paternalism is about outrage

I’m listening to the Minds Almost Meeting podcast episode on Paternalism.

I think Robin is missing or misemphasizing something that is central to the puzzle that he’s investigating. Namely, I think most regulation (or most regulation that is not rooted in special interest groups creating moats around their rent streams), is made not with a focus on the customer, but rather with a focus on the business being regulated.

The psychological-causal story of how most regulation comes to be is not that the voter reflects on how to help the customer make good choices, and concludes that it is best to constrain their options. Instead the voter hears about or imagines a situation in which a company takes advantage of someone, and feels outraged. There’s a feeling of “that shouldn’t be allowed”, and that the government should stop people from doing things that shouldn’t be allowed.

Not much thought is given to the consideration that you might just inform people to make better choices. That doesn’t satisfy the sense of outrage at a powerful party taking advantage of a weaker party. The focus of attention is not on helping the party being taken advantage of, but on venting the outrage.

What You See Is All There Is, and the question of “what costs does this impose on other people in the system, who might or might not be being exploited”, doesn’t arise.

Most regulation (again, aside from the regulation that is simple rent-seeking) is the result of this sort of thing:

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