1. Paternalism vs. Libertarian Historycally, the right hand side has been holding the advantage. J.S.Mill(1869), “On Liberty” The state should repress a man’s acts only if they harm others. Harm to himself alone was not a good reason for the state to limit his freedom. Nanny state Paternalism State as night-watcher Freedom of choice vs.

2. Soft Paternalism A new wave of paternalism. Unlike the traditional “hard paternalism”,it calls itself “libertarian paternalism”. Their aim is not the “nanny state”, but the “avuncular state”, worldly-wise, offering a nudge people in the right direction, perhaps pulling strings on your behalf without your even noticing.

3. A Pension Scheme in Soft Paternalism Many people do not join a pension system and will suffer in their later lives. Joining is a “no-brainer”, but a little brainwork and paperwork prevents surprising number of people from joining. Therefore, pension systems should force people to join by default, leaving them free to opt out. In a case study, the enrolment rate rose from 49% to 86% by changing the default rule in this way.

4. Save More Tomorrow “The American Dream begins with saving money” ( D.Cheney ). To urge saving, the state has to tempt workers to commit themselves today to saving later (two UCLA professor). Divert a fraction of worker’s future pay increase automatically into their pension pot. Workers will easily agree to it because they seem readier to part with tomorrow’s cash than today’s; and as long as they hike their saving rate by less than their pay rise, their extra thriftness will not feel like a cut in their disposable income. In a case study, the saving rate rose from 3.5% to 13.6%.

5. “Sin Taxes” policy A government makes the sale of cigarettes illegal to anyone who does not buy a “smoker’s ID”. The smoker’s ID costs $5000 and entitles the holder to 2500 packets of cigarettes tax-free. People would no longer be able to slide into a smoking habit one packet at a time.I

6. A theory backing them up On some of the biggest decisions in their lives, people succumb to inertia, ignorance or irresolution.And their private failings – obesity, smoking, boozing, profligacy – are now big political questions. A government has to provide information to citizens in order for them to make rational decisions on everything.

7. Are people so stupid ? Generally, paternalism seems to be dangerous. It is hard to distinguish between “soft” and “hard” and “soft” will easily fall into “hard”. For instance, the soft paternalistic pension schme seems to have a contradiction in itself. It makes the default option is “joining” because people are stupid enough to join. But if people were so stupid, they could not choose to opt out and the default option will become the “must”. As for the national pension system in Japan, people obviously choose not to join by their own will and rational calculation. Who is stupid is rather the government which made such a ridiculous pension system.