Libertarian Paternalism and the Pantomime of the Rational Actor

Harold Rosenberg prefaced his 1949 essay, "The Pathos of the Proletariat" with a quote from Marx, "the working class is either revolutionary or it is nothing." "The hero of history," Rosenberg explained, "was to be a social class, a special kind of collective person."

But this collective person, the Proletariat, is "without human motivation, whether individual or collective." In Rosenberg's view, Marx never explained how an inert personification was supposed to transform itself into the heroic subject of history. When volume III of Capital finally got around to addressing class, the mute reply to Marx's question, "What constitutes a class?" was the epitaph, HERE THE MANUSCRIPT ENDS.

Rosenberg described Marx's conception of revolutionary subjectivity as "un-Marxian" in that it derived neither from political economy nor materialism but from dramatic formulas and imaginative metaphors:

The self-consciousness that converts the class from economic personification into historical actor is not an intellectual comprehension of class interests and relations but is part of the revolutionary act itself. The class engages itself in the drama of history by its passionate and willful poetry of the event [italics in original].

But this modern poetry can have nothing to do with the ecstatic, hallucinatory poetry of the past. The bourgeois French revolutionaries recognized their identity through a re-enactment of ancient Rome. The working class does not have the luxury of such indulgences. They are scarcely motivated to act "until the situation has been created which makes all turning back impossible." That situation constitutes a "growing mass of misery" and worsening crisis. But even that is not enough.Such misery could as easily precipitate escape into fantasy.

To sustain the revolutionary struggle, the conditions themselves must be joined by a remarkable collective act of will, a "readiness to sacrifice itself for the moment alone":

The proletariat must be prepared to die in order to exist and for nothing else. Such appears to be the impasse of truly secular (without ideologies, as well as without myths) historical creation.

The trouble is, until the revolution happens it's all just a hypothesis. And the longer the absence of evidence supporting that hypothesis endures, the more likely it is to be read as evidence against. Here is where things get messy.

Marx... refuses to regard proletarian action as an if of creative hazard. For him the revolution is an historical certainty. From this translation of the dramatic into the "scientific" arise the essential ambiguities of Marxism. ...though he thinks of the revolution as a tragedy, he does not behold its incidents as tragic, and his work lacks the pathetic tonality appropriate to its notion of the workers transforming themselves through constant risk of their lives. The rationalism of Marx's prose... wins against his beloved Shakespeare and Aeschylus. An optimism with respect to the historical drama as a whole subdues the anguish of the hero's striving against utter defeat through which the happy resolution is to be reached. Even in his description of the Commune and its executioners, the peak of his revolutionary eloquence, it is the foes of the revolution that he most vividly evokes.... For him the Commune is a single lost battle in a war that can have but one conclusion. Thus Marx himself prepares the shallow trust of Marxism in rationalistic formulas.

According to Rosenberg, the dilemma for Marxism is that it must either admit the radical contingency of a revolutionary class consciousness, "or it must reduce the situation to a given number of external elements, definable in advance, and thus become identical with what is known as 'vulgar materialism' or 'mechanical Marxism.'" There is no "happy medium" of a foreseeable autonomy."The failure of the situation to give rise to revolutionary consciousness leads Marx and Marxists to a second type of effort to guarantee the revolution: through politics and propaganda."

Politics and propaganda -- or to use more modern terminology, nudge the proletariat into actions aligned with its revealed revolutionary destiny. The comparison I am seeking to draw is with the segue from rational choice theory to behavioral economics. To paraphrase Marx, Homo economicus is either rational or it is nothing. The failure of humans to comply with the standards of rationality prescribed by rational choice theory informs policies "to motivate behaviour change among those who, on reflection, would have liked to have made different choices for themselves." 

From "Nudging, Shoving, and Budging: Behavioural Economic-Informed Policy," Adam Oliver, Public Administration, early view published online 2015:

Thaler and Sunstein use the term libertarian to modify the word paternalism in order to signify that their approach is liberty-preserving. In nudge policy, there should be no burden on those who choose their pre-existing behaviours rationally and thus wish to continue with those behaviours. Therefore, the approach does not allow regulation or bans. The approach is only paternalistic in the sense of wanting to motivate behaviour change among those who, on reflection, would have liked to have made different choices for themselves. That is, a nudge is meant to bring the instantaneous decisions of those who think that their non-reflective actions are irrational into better alignment with their deliberative preferences, and therefore relies on the assumption that deliberative preference is necessarily rational. Thus, the focus is on reducing negative internalities – the longer term harms that people impose on themselves through their own ill-considered automatic decisions.

Libertarian paternalism rules out using significant financial incentives or overt persuasion to change behaviour. The essence of the approach is that behavioural economic insights, such as those summarized above, can and should inform the design of what Thaler and Sunstein call the choice architecture, or in other words, the context or the environment, so that more people make automatic decisions that, on reflection, they would like to make and yet, due to bounds on their rationality and human error, ordinarily fail to do so. 

The concept of libertarian paternalism and its application in the form of nudges has attracted the attention of governments in a number of countries, but none more so than that of the United Kingdom, where a right-of-centre coalition government lauded the apparent promise of the approach to offer non-regulatory inexpensive demand-side solutions to some of the most profound problems in contemporary societies. ‘This new approach’, according to a 2010 government report, ‘represents an important part of the Coalition Government’s commitment to reducing regulatory burdens on business and society, and achieving its policy goals as cheaply and effectively as possible’, Soon after being appointed Prime Minister in 2010, David Cameron established the Behavioural Insights Team (BIT), colloquially known as the Nudge Unit. Whether or not this moniker is appropriate requires an assessment of whether the interventions that were advocated as nudges by the BIT comply with the original requirements of libertarian paternalism laid out by Thaler and Sunstein.

Oliver maintains the term "nudge" has become a popular generic label for "a whole spectrum of policies, some of which are informed by weak evidence bases and others of which are divorced from the original requirements of libertarian paternalism." Some of these approaches Oliver describes as "coercive paternalism" and "behavioral regulation." The parallel with Rosenberg's critique of Marxism suggests we have been here before. It wasn't pretty.

For Engels in 1893 the continuity of the revolutionary movement no longer depends upon the reflexes of a proletariat that has been forced into revolt; it is no longer subject to the intermittences of the heart and mind of the working class.

In order that the masses may understand what is to be done, long, persistent work is required, and it is just this work which we are now pursuing, and with a success which drives the enemy to despair. 

Instead of learning in action, the working class is put to school by the Party; it marches with its will in the secure custody of the leadership. Marching has indeed replaced revolutionary action, the movement which was to have been the source itself of the "alteration" of the workers.

Rosenberg referred to this substitution of party leadership for class spontaneity a "demonic displacement of the ego of the historical collectivity":

As a liberating program Marxism founders on the subjectivity of the proletariat. So soon as it declares itself, rather than their common situation, to be the inspiration of men's revolutionary unity and ardor - how else can it offer itself simultaneously to the French working class and to non-industrial French colonials? - Marxism becomes an ideology competing with others. When fascism asserted the revolutionary working class to be an invention of Marxism, it was but echoing the Marxist parties themselves. If the class as actor is a physical extension of the Party, fascism was justified in claiming that a magical contest in creating mass-egos could decide which collectivities are to exist and dominate history. Moreover, it proved that heroic pantomime, symbolism, ritual, bribes, appeals to the past, could overwhelm Marxist class consciousness. What choice was there for the workers between the fascist costume drama and a socialism that urged them to regard their own working clothes as a costume? In Germany and Italy the working class was driven off the stage of history by the defeat of the Party - in Russia it was driven off by its victory.

Similarly, as an exercise in "libertarian paternalism" behavioral economics founders on its takeover of rationality on behalf of the misbehaving humans. It reveals itself as yet another ideology competing with other ideologies. Instead of misbehaving, we will get marching in time to deliberative preferences. Instead of marching nudged by paternalistic libertarians, we will get marching led more forcefully by parties more aesthetically inclined to "heroic pantomime, symbolism, ritual, bribes, appeals to the past..."