Über die Autorin bzw. den Autor

Gilles Saint-Paul is professor of economics at the Toulouse School of Economics. His books include Innovation and Inequality (Princeton).

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"Saint-Paul stands courageously in the middle of the new road to serfdom, trying to stop the heavy traffic being nudged along on it. He alerts us to the greatest threat to liberty since communism--our good will, our paternal-maternal desire to prevent anyone, anywhere from exercising their free will mistakenly. Let us pray Saint-Paul succeeds. If the unintentional enemies of liberty are open to reason, he will."--Deirdre McCloskey, author ofBourgeois Dignity: Why Economics Can't Explain the Modern World

"This is a fresh and original book about the fundamentals of how we approach economic policy. Saint-Paul presents a strong and powerful message about the alarming paternalism implicit in some currently fashionable approaches to economics."--Diane Coyle, author of The Soulful Science: What Economists Really Do and Why It Matters

"This accessible book provides a well-argued case against much that is currently fashionable, particularly in behavioral economics. Ranging over issues in philosophy, political science, psychology, economics, and public policy, the book deals adventurously with big issues while setting out the economic arguments intertwined with them. A very enjoyable and highly provocative book."--John Driffill, coauthor ofEconomics

"This book will enlighten and infuriate economists in equal measure--which is what an intelligent book should do. It makes an important contribution and is a good read."--Richard Disney, University of Nottingham

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"Saint-Paul stands courageously in the middle of the new road to serfdom, trying to stop the heavy traffic being nudged along on it. He alerts us to the greatest threat to liberty since communism--our good will, our paternal-maternal desire to prevent anyone, anywhere from exercising their free will mistakenly. Let us pray Saint-Paul succeeds. If the unintentional enemies of liberty are open to reason, he will."--Deirdre McCloskey, author ofBourgeois Dignity: Why Economics Can't Explain the Modern World

"This is a fresh and original book about the fundamentals of how we approach economic policy. Saint-Paul presents a strong and powerful message about the alarming paternalism implicit in some currently fashionable approaches to economics."--Diane Coyle, author of The Soulful Science: What Economists Really Do and Why It Matters

"This accessible book provides a well-argued case against much that is currently fashionable, particularly in behavioral economics. Ranging over issues in philosophy, political science, psychology, economics, and public policy, the book deals adventurously with big issues while setting out the economic arguments intertwined with them. A very enjoyable and highly provocative book."--John Driffill, coauthor ofEconomics

"This book will enlighten and infuriate economists in equal measure--which is what an intelligent book should do. It makes an important contribution and is a good read."--Richard Disney, University of Nottingham

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The Tyranny of Utility

PRINCETON UNIVERSITY PRESS

Contents

Acknowledgments..................................................................................viiIntroduction.....................................................................................11 Political Organization and the Conception of Man...............................................72 The Challenge to the Unitary Individual in Western Thought.....................................143 Economics: The Last Bastion of Rationality.....................................................194 Economics Goes Behavioral......................................................................415 From Utility to Happiness......................................................................516 Post-Utilitarianism: Searching for a Collective Soul in the Behavioral Era.....................65Appendix to Chapter 6. A Numerical Example.......................................................737 The Policy Prescriptions of Behavioral Economics...............................................778 The Modern Paternalistic State.................................................................979 Responsibility Transfer........................................................................11510 The Role of Science...........................................................................12311 Markets in a Paternalistic World..............................................................13412 Where to Go?..................................................................................146References.......................................................................................155Index............................................................................................161

Chapter One

The state is man writ large. —Plato

Westerners are proud of their political institutions. They associate them with a high material standard of living, a great variety of individual choices, freedom of speech, and checks and balances that prevent governments from drifting toward despotism. Because these institutions are so satisfying, they are tempted to believe that they are universal. That means that they are not inherent to the West and could be adopted by any culture, without that culture being changed. It is such a view, for example, that underlines the (now somewhat discredited) neoconservative agenda of spreading democracy to the Middle East. Some people disagree with this agenda because they think that democracy and the related institutions in which we believe are actually part of our culture, and that another culture could not adopt it without first changing itself. Both Japan and Turkey, for example, underwent a long phase of Westernization before becoming actual (and far from perfect) democracies.

A culture influences the determination of political institutions through many channels. One is its conception of Man. The "liberal" political institutions that we seem to cherish are inherited from the Enlightenment and its conception of Man, which is itself the outcome of a long evolution in the history of thought, from Aristotle to Christianity, to the Renaissance and the Reformation. This tradition states that the individual is autonomous and his aspirations respectable. That is why it places much emphasis on individual rights and has given birth to Lockean theories of governments where the legitimacy of power is grounded in the consent of individuals to participate in a social contract rather than some immanent divine order.

This conception is so pervasive in our society that we are not even aware of it, for a number of reasons. Our daily practice of democracy tends to trivialize it. We risk turning it into a consumer good, ignoring its cultural and philosophical foundations. Above all, our relative contempt for intellectuals leads us to forget that these institutions were designed by them, and reflect their conceptions.

Although we take our individualist philosophy for granted, even in the West it was not prevalent in a not-so-distant past. In ancient times the individual's well-being was entirely subordinate to that of the tribe. Individuals were just functional elements of a wider collective machine, and all that mattered was the tribe's power and capacity to survive. The scope for individual choice was trivial compared to the resources, efforts, and sacrifices that were imposed on the people in the name of the community. In the Republic of Sparta a man had the right to live only if he could prove to be sufficiently strong, and he then had to devote his life to the army. For the Spartans, the individual is just a vector for the genes of the tribe. The social organization is designed so as to make the best use of these vectors for the purpose of obtaining as much power as possible for the tribe. Individual goals and aspirations are largely irrelevant.

The individual emancipated himself from the tribe with the advent of Christianity, which presents itself as a personal religion rather than the religion of a tribe, a state, or a nation, and furthermore introduces the notion of free will. This set the stage for the liberal political philosophies of the seventeenth and eighteenth centuries, which are explicitly based upon the individual. It is instructive to note, in this context, how the political systems proposed by these philosophies are matched with a theory of the individual. To take the most prominent cases, both Locke and Hobbes consider the individual as conscious, self-aware, and rational, and base their political philosophies on these views. However, these two individualists differ about the nature of Man, and so do their favorite political systems. Man, according to Hobbes, is a predator, and civil peace can only be reached if he surrenders all his natural rights to the state. For that reason Hobbes advocates an absolute monarchy. For Locke, man is intrinsically good, and the political system should be designed to allow people to fulfill their individual aspirations. He therefore advocates that government's main role should be to arbitrate contractual disputes between individuals, and that governments should be organized along the principles of representative democracy and the separation of powers.

Freedom and Responsibility

A cornerstone of liberal thought is that individual freedom is inseparable from individual responsibility. Voltaire said: "My freedom stops where that of others starts." This powerful statement tells us that in order to be operative, freedom must have well-defined boundaries. This goes so far that the American Constitution and the 1789 French Declaration of Human Rights do not define freedom so much by what you may do (positive rights) but rather by what may not be done to you (negative rights);—freedom, in other words, is defined by its boundaries, not by its contents. Equally important are the boundaries set on the government's freedom. Thus the Habeas Corpus act of 1679 restricts the power of the state by preventing people from being imprisoned without due trial.

Mill (1863) proposes a concise definition of the limits to both individual and government actions, which arguably would lead to the maximum possible degree of freedom:

The sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of...