To protect the red-cockaded woodpecker in the 1980s, the federal government prohibited the logging of old pine trees where the bird nests. Timber owners responded with more intensive logging, harvesting trees before they grew old enough to become suitable habitats for the woodpeckers. Even the best-intended regulations can spark unanticipated and counterproductive reactions.
To protect the red-cockaded woodpecker in the 1980s, the federal government prohibited the logging of old pine trees where the bird nests. Timber owners responded with more intensive logging, harvesting trees before they grew old enough to become suitable habitats for the woodpeckers. Even the best-intended regulations can spark unanticipated and counterproductive reactions.
Cass Sunstein understands the limits of the regulatory state. He was head of the Office of Information and Regulatory Affairs—"the cockpit of the regulatory state," as he calls it—in 2009-12. But the Harvard Law School professor still believes passionately in the promise of good government—government that not only intends to do good but is really good at doing good. In "Simpler: The Future of Government," he offers a breezy tract on how to render regulation more user-friendly and effective.
Mr. Sunstein is a long-standing champion of the cost-benefit analysis of regulation, and his criticisms are often spot-on. The idea is simple and sensible: If the costs of a regulation are greater than its benefits, the regulation is shelved, regardless of how splendid its benefits are in the abstract. It is encouraging to read that Mr. Sunstein and his colleagues "focused on economic growth and job creation, and . . . sought to ensure that regulation did not compromise either of those goals."
And given Mr. Sunstein's previous work, 2009's "Nudge," with the economist Richard Thaler, it isn't surprising to find that "Simpler" is deeply informed by the insights of behavioral economics—a field of research that reveals several psychological quirks that affect human decision-making. Mr. Sunstein deploys behavioral-economics notions such as "framing effects" (our interpretation of facts is affected by how they are presented to us) and "status-quo bias" (we prefer the status quo, simply because it is the status quo, over potential alternatives) to promote what he calls "libertarian paternalism."
Government, he thinks, should change behavior using "nudges" instead of commands. Regulations can tap into people's psychological quirks and prompt them to choose "better" behaviors—while still leaving them free in many circumstances to act differently. Cigarette packages with grisly images of cancer-ridden lungs are an effort to nudge—rather than command—people not to smoke. (A federal appeals court last August blocked a proposed Food and Drug Administration rule requiring such packages.)
All good, and the reader of "Simpler" might wonder if this is the same Cass Sunstein who clerked for the progressive Supreme Court Justice Thurgood Marshall and was denounced by Glenn Beck as "the most dangerous man in America" upon his appointment to the Obama administration. "Simpler" makes it clear that Mr. Sunstein is no despot in professor's clothing. But he is emphatically not a limited-government kind of guy. He is an enthusiast for active, expansive, "progressive" government.
But his faith in government combines with a scanty appreciation of the creative and disciplining powers of markets to render his case for active regulation, whether imposed through nudges or commands, less than persuasive. The pages of "Simpler" bubble over with examples of adults' weak capacity to choose wisely, which, in Mr. Sunstein's view, calls for more expansive government.
The author boasts, for example, that "to save consumers money, we required refrigerators, small motors, and clothes washers to be more energy-efficient." Apparently producers are too benighted to compete for customers by offering such money-saving products. And consumers are too distracted by their own weaknesses to choose such offerings. Similarly, Mr. Sunstein believes that huge numbers of people really want to be organ donors but are prevented from agreeing to donate their organs simply by inertia.
In this worldview, people's weak wills and eccentricities make them prey both to shameless hucksters and to their own strange psychological traits. Ironically, however, Mr. Sunstein fails to explain why the irrational and impulsively childlike people who are apparently the nation's citizens will elect a government that is itself not irrational and impulsive—or why government officials won't exploit, for their own corrupt ends, the people's cognitive weaknesses. True, individuals often make poor decisions, and hucksters are never in short supply. Surely, though, the environment most favorable to poor decision-making and hucksterism isn't competitive markets but, rather, politics. Milton Friedman didn't need behavioral economics to know that each of us typically spends our own money on ourselves more wisely than a stranger spends other people's money on us.
The author assumes, without much reflection, that government's role in protecting us from ourselves has few limits, either ethical or legal. Seldom in the book does Mr. Sunstein pause to ask if this well-meaning nudge or that benevolent order, such as those that govern our diets or our pensions, is permissible under the Constitution. Nor does he worry that government regulation might, in the long run, make people even more behaviorally quirky. If government succeeds as Mr. Sunstein believes it can at protecting us from our thoughtless dietary choices and poor investment decisions, might we not become even more infantilized?
There is a deeper threat posed by a paternalist state, however "libertarian" we might wish it to be, and it isn't easily accounted for by cost-benefit analysis. Friedrich Hayek highlighted it in "The Road to Serfdom" (1944): "The political ideals of a people and its attitude toward authority are as much the effect as the cause of the political institutions under which it lives. This means . . . that even a strong tradition of political liberty is no safeguard if the danger is precisely that the new institutions and policies will gradually undermine and destroy that spirit."
The regulatory institutions championed by Mr. Sunstein are certainly not the worst that various secular saviors have proposed over the years. If I must be regulated by a progressive, I choose Cass Sunstein. But the regulatory state as envisioned by Mr. Sunstein is nevertheless deeply opposed to America's traditions of liberty and individual responsibility. Such regulation will chew away like a cancer at those traditions. If Mr. Sunstein's blueprint for regulation is indeed the future of government, we might, as a result, be well-regulated—but we won't be free.