Robin, I agree that the solutions you provide above are very good ones. No doubt if people are rational enough to use them, they will work better than paternalist intervention would. But people will only use those solutions after they realize they’re being irrational. The advantage of paternalism is that as long as people recognize someone else is being irrational, they can help him regardless of whether that person know he’s being irrational himself. And in my experience, most irrational people don’t know they’re being irrational; I certainly didn’t before I started reading this blog.

Yvian, many of the other approaches I listed also rely on less personally involved parties.

I could see how bureaucrats would be able to ignore the individual’s biases, but why would it follow from that that the bureaucrat would not introduce as much bias of his own? I agree their biases would be different, but I can’t see them being less.

I don’t think diets are a good example, because we can’t show that “healthy and well-balanced” is necessarily what people want. The snake oil example seems better to me, because we can objectively show that snake oil is useless. Of course, in that situation the buyer isn’t purchasing a cure at all, he’s purchasing self-deception or a way to show his daughter that he cares.

I haven’t been here long, but I don’t think gambling prohibitions are a good example on Robin Hanson’s blog Biases against gambling have held off innovations in decision-making (via prediction markets) for who knows how many years (decades?).

Consider diets. Most people choose their own diet. Some people, like prison inmates and students in school lunch programs, get their diets chosen by the government. Most people who choose their own diet will to one degree or another make decisions based on temporary desires (”I’m really in the mood for a bacon burger”). But the government bureaucrats who decide other people’s diets have no personal stake in the matter, and usually end up designing something healthy and well-balanced.

Another example is gambling. Most countries have either banned or restricted it for paternalistic reasons. If you’re in Vegas and really need a few hundred bucks quick, it’s pretty hard to resist the temptation to play the slots. But if you’re in Washington D.C. thinking about the costs and benefits, it’s easy to decide that the latter outweigh the former.

Or to take a favorite example of Robin’s, consider health care. If your daughter’s dying of cancer, and someone tells you in a very sincere voice that snake oil is certain to save her life and can be yours for the low, low price of $999.99, you’ll probably buy the snake oil even though all those ivory tower scientists in the Vast Allopathic Conspiracy say it doesn’t work. Doctors tell me stories about this sort of thing all the time. It’s much easier for a bureaucrat in D.C. to review the evidence, decide snake oil should be banned as quackery, and save you a thousand dollars.

This isn’t to say that governments aren’t prone to different sorts of errors, like those springing from corruption, but they don’t need to suffer exactly the same biases that their individual citizens do.

“Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the forms of kings to govern him? Let history answer this question.”

Zim: You can’t have an invasion without me! I was in Operation Impending Doom 1! Don’t you remember?
Tallest Purple: Oh yes. We remember…
(flashback)
Zim: (in giant robot destroying a city) AH HA HA HA HA HA HA!
Pilot: But sir, we’re still on our own planet!
Zim: Silence! Twist those knobs! Twist those knobs! You! Pull some levers! Pull some levers!
(end of flashback)
Zim: I put the fires out.
Tallest Red: You made them worse!
Zim: Worse… or better?

Actually, whether democratic politics is an “efficient decision market” in some sense is a hotly debated question in political science and public choice theory. One reference is Caplan, B. “Rational Irrationality and the Microfoundations of Political Failure” Published in Public Choice 107(3/4), June 2001, pp.311-331. See also his work “The Myth of the Rational Voter” which discusses this issue in depth.