Non Scholæ Sed Vitæ: Does Nudge Theory Indicate a Privation of Education? Table of Contents Introduction ....................................................................................................................... 2 1. The Objectives of Nudge Theory ..................................................................................... 3 i. What is Nudge Theory? ........................................................................................................... 3 ii. How Nudges Fix Behavioural Problems .................................................................................. 5 2. Nudge or Educate? ......................................................................................................... 6 i. Libertarian Paternalism: Papering Over the Cracks .................................................................. 6 ii. Nudges as Cheaper Alternatives to Education ........................................................................ 7 3. Education: The Global Common Good ............................................................................ 9 i. Preventing Detrimental Habits ................................................................................................ 9 ii. Rethinking the Curriculum.....................................................................................................10 Conclusion ....................................................................................................................... 12 Bibliography .................................................................................................................... 13 1 Introduction This paper intends to present the hypothesis that the increased use of Nudge theory is symptomatic of a privation of international education. In order to perform this task, the paper will implement the method of intertextual analysis between Richard Thaler and Cass Sunstein’s 2008 work, Nudge: Improving Decisions About Health, Wealth, and Happiness (Nudge) and the United Nations Educational Scientific and Cultural Organization’s (UNESCO) 2015 publication, Rethinking Education: Towards a global common good? Using this method, I aim to demonstrate that the increasing global interest in education appears to have arisen following the success of Nudge theory. Nudge theory was popularised by Thaler and Sunstein, thus we will implement their definition of a nudge as “any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives.”1 A choice architect is someone who “has the responsibility for organizing the context in which people make decisions.”2 Therefore, Nudge theory is the use of unenforced choice altering behaviour by people responsible for governing the context of situations. This is described by Thaler and Sunstein as “libertarian paternalism”, in that they believe “people should be free to do what they like” (libertarian), whilst also having choice architects “influence choices in a way that will make choosers better off, as judged by themselves” (paternalism).3 Since we will be exploring the UNESCO work on education, it is logical to employ their definition of education, which is, “learning that is deliberate, intentional, purposeful and organized.”4 Learning is the acquiring of knowledge, which is the application of “meaning to experience”, that can be otherwise classified as skills, values, information and understanding.5 As such, education is the intentional act of passing on skills, values, information, and understanding. Education is made up of formal, non-formal, and informal learning and UNESCO stress the importance of informal education that is less institutionalized, such as “learning activities that occur in the workplace (for instance, 1 Richard H. Thaler, Cass R. Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness (Yale University Press, New Haven, CT, 2008.) p. 6. 2 Idem. p. 3. 3 Idem. p. 5. 4 UNESCO (Senior Experts’ Group). Rethinking Education Towards a global common good? (UNESCO Publishing, Paris, 2015.) p. 17. 5 Idem. p. 16. 2 internships), in the local community and in daily life, on a self-directed, family-directed, or socially-directed basis.”6 Since informal education deals with real world behaviours that nudges target, we will focus on this area of education. The first section of this paper will begin with a discussion of Nudge theory and why it can be considered a success. We will explore what Nudge is, discuss the benefits that it offers, and indicate why it has been implemented as a useful tool by governments and corporations alike. Then we will probe a major behavioural issue that Thaler identifies in his 2017 Nobel Prize lecture, From Cashews to Nudges: The Evolution of Behavioural Economics, which is inertia and examine how nudges can help overcome this behaviour.7 In the second section we will question why this behavioural deficiency is dominant within society and explore whether the popularity of Nudge is symptomatic of a deeper problem, which is a lack of education. We will consider Thaler and Sunstein’s pre-emptive counter arguments against critics of Nudge and access whether they successfully recognise the problem identified in the hypothesis. Then we will put forward the suggestion that because nudges are cheaper than education there is a greater incentive to increase nudges rather than repair educational issues. The final section will consider whether inertia can be fixed through education and assess Ian MacMullen’s claim that schools are actively teaching a status quo bias. We will then explore UNESCO’s solution to this problem in their encouragement of education as a global common good. I will advance the notion that the focus on informal education is specifically being targeted by UNESCO through their attempt to affirm education as the “global common good”. The paper will conclude with a summation of what has been discussed and an indication of the further research that these findings solicit. 1. The Objectives of Nudge Theory i. What is Nudge Theory? 6 7 Ibid. Inertia is the tendency to avoid action and leave situations unchanged. 3 Nudge theory operates as a tool for helping to improve decision making without infringing on individual’s freedom to make their own choices. Nudges are introduced because people make predictable behavioural errors that can be corrected through cheap preventative measures. These behavioural errors occur in a variety of identifiable forms: overconfidence and undue optimism, issues of framing (people are more likely to choose a healthcare option if they are told that ninety in one-hundred survived, rather than being told that ten in one-hundred are deceased), loss aversion, status quo bias (otherwise known as inertia), following the herd (social influence), dynamic inconsistencies (people may initially choose to go on a diet, but later decide not to), and self-control issues.8 To solve these issues Thaler and Sunstein introduced Nudge theory as a tool through which behavioural errors can be corrected without impeding on the freedom of those being targeted. The authors created a useful mnemonic device out of the word NUDGE, which choice architects can remember when contemplating the nudges available to them. iNcentives Understand mappings Defaults Give feedback Expect error Structure complex choices.9 These options present easily implementable interventions that can fix the behavioural problems that people display. This theory has become incredibly successful since its conception, winning the 2017 Nobel Prize in Economic Sciences and being employed as a popular tool by various governments and corporations around the world. The most notable of these is the UK’s ‘Behavioural Insights Team’ (BIT), otherwise known as ‘Nudge Unit’, which was established in 2010 under a David Cameron government. The success of BIT led to its advancement as an independent special purpose company in 2014. BIT now claims to have operated in 31 countries in 2020 alone.10 In addition to BIT there is the ‘BVA Nudge Unit’ which describes itself as, “a global consultancy specialized in driving successful behavioural 8 Thaler and Sunstein. Nudge. These are the behavioural deficiencies I identified within the text. Idem. p. 100. 10 Behavioural Insights Team “About Us” Accessed, 16th of April 2021. <https://www.bi.team/about-us/> 9 4 change.”11 Combined, these two companies have a range of clients across the world, from multi-national corporations, to governments, and global institutions like the United Nations and WWF. Examples of the influence of Nudge are prevalent, with Indra Nooyi, the CEO of PepsiCO, telling the Harvard Business Review in 2015 that, in regard to pushing healthier food choices, “(w)e’ve taken lessons from Richard Thaler and Cass Sunstein’s book Nudge.”12 Nudge theory has clear benefits that have seen it emerge as a popular tool within the global community. ii. How Nudges Fix Behavioural Problems We cannot consider all of the behavioural deficits that nudges aim to correct within the scope this paper, so we will focus on the behavioural floor that Thaler identifies as the most systemic. In his Nobel Prize Lecture he expresses that “(maybe) the most powerful nudge we have in our arsenal is simply to change the default.”13 He believes this is potentially the most important nudge because the likeliest behavioural deficiency is status quo bias.14 Thaler and Sunstein define status quo bias as “a fancy name for inertia”, in that many people choose to do nothing and take the option that requires the least effort.15 Remaining in a state of inertia is a common issue that effects the vast majority of people, thus, Nudge theory advocates defaults that benefit those who choose to do nothing. An example of this approach is to have employers adopt the default position that employees will be automatically enrolled into pension plans. This is a very small, but hugely impactful nudge because not enough employees are enrolled into pension plans, which are essential for long term planning and preparation for retirement. Employees rarely choose to be removed from these plans if they are automatically enrolled, yet when the default is not to be enrolled many people simply fail to sign up for them. Even for those who decide they do not want to be enrolled into a pension plan, that choice remains open just not as the default option. This nudge has the potential to improve the lives of a vast number of people since it reduces the chances that they will fall 11 BVA Nudge Unit “About Us” Accessed 28th of April 2021. <https://bvanudgeunit.com> Ignatius, Adi. “How Indra Nooyi Turned Design Thinking into Strategy: ‘A Well-Designed Product Is One You Fall in Love With.’” Harvard business review 93, no. 9 (2015.) p. 85. 13 Thaler, Richard H. From Cashews to Nudges: The Evolution of Behavioural Economics (Nobel Prize Lecture, Aula Magna, Stockholm University, Stockholm, 2017.) 26:10 14 Ibid. 15 Thaler and Sunstein. Nudge. pp. 7-8, 83. 12 5 into poverty upon reaching retirement age. This nudge is a seemingly small, costless shifts in choice architecture that has the ability to cause enormous positive ripple effects. For this reason, it would be illogical to claim that nudges do not have benefits. Nevertheless, this paper is interested in the question, why are people prone to inertia in the first place? 2. Nudge or Educate? i. Libertarian Paternalism: Papering Over the Cracks The success of Nudge theory is undoubtably a result of the simplicity and low-cost nature by which nudges can be implemented. However, this paper hypothesises that these cheap solutions are symptomatic of a deeper, potentially systemic, societal problem. Clearly nudges serve to prevent the behaviour we have discussed from manifesting negative effects in people’s lives, but we are investigating why these behaviours exist in the first place. Thus, the two questions we pose are, have these behaviours become systemically ingrained within society? and do nudges cover up the underlying failings of education systems? To provide an analogy that illuminates this problem, I ask the reader to imagine a road with a pothole on it. A nudge operates in the same way that putting a sign in front of the pothole prevents drivers from damaging their tires. If we take the road to be the education system, the pothole to be a privation of education, and the drivers to be those progressing through the education system, then the nudge serves as a cheap solution to prevent the educational problem from damaging people’s lives in the short term. Nevertheless, if the pothole is not repaired then the risk of the situation worsening is expected, with the initial pothole growing or more potholes appearing on the road. Eventually resources will have to be committed to the problem or it will continue to grow, and no one will be able to drive down the road without having their cars damaged. A reply to this analogy might be that I am just presenting the “slippery slope” argument, which Thaler and Sunstein refuted in Nudge.16 They engage with this issue by writing, “(sceptics) might object that if we permit information campaigns that encourage people to conserve energy, a government propaganda machine will move rapidly 16 Thaler and Sunstein. Nudge. p. 236. 6 from education to outright manipulation to coercion and bans.”17 Yet, my argument is a more nuanced approach because I am propounding that we might already be at the bottom of a slope if education has already failed. Therefore, I am not indicating that nudges will move from education to more oppressive nudges, rather I am hypothesising that the success and popularity of Nudge is indicative of a systemic problem that has already occurred; which is the privation of education that already exists. This is not to imply that nudges are not useful or that they should no longer be considered for temporary solutions, only that there should be a focus on solving the underlying problems that nudges reveal. In the same way that a smoke alarm is a useful tool for alerting us to a fire, but it does not put out the flames. Although Thaler and Sunstein do not confront this issue directly, they somewhat indirectly approach it in their criticism of the claim that we have, “(t)he Right to Be Wrong”.18 They suggest that an argument directed against nudging is that people have the right to be wrong in order to learn from their mistakes. However, they refute this as a weak challenge because there are many examples in which one does not have the opportunity to be wrong more than once. For example, children should not learn about the dangers of a swimming pool by falling in without prior warning because there is the possibility that they will drown.19 This criticism is entirely justified and well explained, although it fails to anticipate the underlying issue that this nudge only covers up the more important concern, being that some children do not know how to swim. It is easy and cheap to warn children not to go into the water, whereas it is time consuming and costly to teach them how to swim. The claim I am making is not that humans need to learn from their mistakes, or that they naturally make excellent decisions, only that they are not being provided with an education that would limit the requirement for nudges. If every child were taught how to swim, then nudges not go into the pool would no longer be necessary. For this reason, the hypothesis indicates that nudges are cheaper solutions to deeper underlying problems that would require greater resources to repair. ii. Nudges as Cheaper Alternatives to Education 17 Ibid. Idem. p. 241. 19 Ibid. 18 7 For Thaler and Sunstein, there are certain educated humans that make correct and rational decisions, those they term “Econs” or “homo economicus” (the economic man).20 Since the majority of people are not Econs and are prone to irrational decision making, they require nudging. Yet, Nudge theory is concentrated on altering behaviour, therefore, should the aim not be to educate all people in the direction of becoming rational agents? It does not seem controversial to pose that teaching critical skills that improve rational decision making with the intention of producing more Econs is a realistic target. With Nudge theory providing a cheap alternative for fixing the failings of human rationality, there is the potential that those responsible for educating rational skills fail to properly prioritise these critical skills because the problem is left for choice architects to solve. For example, if not enough people are signing up for pension funds, then it is probable that a vast majority have never been educated in understanding the importance of a pension, otherwise they would have enrolled. Although a nudge can solve part of the problem through automatic enrolment, the fundamental lack of education means that many workers will not be saving as much as they would have done if they had been educated about the benefits of pensions. Thaler and Sunstein debate this problem in the “Save More Tomorrow” section.21 They reveal that despite automatic enrolment, most people still fail to save enough, and the most obvious solution is education.22 However, they indicate that education is not, in itself, an adequate solution because the evidence does not support its effectiveness.23 I do not question the legitimacy of the evidence they provide, what I do question the approach to education they present. The method they consider is a free financial education programme for the employees of a large company, which found that at the end employees were, “excited about saving more but then fail to follow through on their plans. One study found that at the seminar everyone expressed an interest in saving more, but only 14 percent actually joined the savings plan.”24 Education appears to have succeeded in helping the employees understand why saving more is important because many were “excited”, but inertia caused them to fail to act on this understanding. I speculate that this method was ineffective because it is an attempt to repair an educational failing once the detrimental behaviour had already become a habit. Thus, an emphasis should be placed 20 Idem. p. 6. Idem. p. 103-18 22 Idem. p. 111. 23 Idem. p. 111-2. 24 Idem. p. 112. 21 8 on those currently within education systems so that pupils do not developed adverse habits in the first place. 3. Education: The Global Common Good i. Preventing Detrimental Habits We begin this section by making the controversial claim that international populations have not been successfully educated when it comes to the skills required to maximise their decision making. Of course, children cannot be taught everything, but learning the essential informal skills required to make rational decisions should be considered a priority. If there are behavioural problems preventing people from making decision that have a significant impact on their quality of life, then it is the role of educational institutions to assist in preventing these behaviours developing before they become habits. If inertia is identified as one of the critical behaviour issues that prevents people from making effective decisions, then it would make logical sense to educate students with the skills that prevent the onset of inertia. This statement approaches the issue from the position that inertia is not intrinsic, but even if it is naturally occurring this does not imply that it cannot be changed.25 Therefore, the question we are asking is whether the behavioural defects can be prevented from manifesting in order to reduce the demand for nudges? It appears that Thaler and Sunstein accept this possibility because when discussing drug compliance within the health care system they state, “the Automatic System can be educated to think: ‘My pill(s) every morning, when I wake up.’”26 As such, there appears to be an acceptance that automatic behavioural systems can be educated. They do caveat this claim with the proviso that educating automatic systems to perform more complex tasks, like “remembering to take medicine every other day is beyond most of us.”27 However, we are not interested in determining how complex a task the automatic system can handle because inertia is the complete opposite, it is the automatic 25 This raises the interesting philosophical issues of free will and the nature versus nurture debate, but these issues are beyond the scope of this paper. 26 Idem. p. 89. 27 Ibid. 9 response not to perform any task. Thus, what we want to uncover is whether basic teachable skills are being overlooked because of the success of nudges. If inertia is the tendency to do nothing and its cause is a status quo bias, then this behaviour should be the target of educational institutions. ii. Rethinking the Curriculum Since inertia is caused by a status quo bias then we can question whether this can be tackled by education. This is a pertinent topic to discuss because it appears, according to research done by Politics of Education specialist Ian MacMullen, that educational institutions are typically teaching about the benefits of existing laws and political institutions, and not encouraging a critical approach.28 Although we are not discussing the political effects of status quo bias, Macmullen’s findings can be applied to the kind of inertia we are discussing since he writes, “status quo biases in education often cause status quo biases in judgment as these are understood in the fields of cognitive psychology and behavioural economics, namely, as irrational preferences for (or beliefs in the superiority of) the status quo.”29 The acceptance of status quo bias does not necessarily require the bypassing of the students own rationality because, “(t)he educational bias could simply take the form of exposing children to a skewed selection of the available evidence and arguments for and against an existing institution (including evidence and arguments about the existence and merits of alternatives).”30 In other words, students are seemingly nudged into adopting a status quo bias by the education systems choice architects by virtue of the fact that they are receiving information that encourages them to accept this bias.31 Since these educational biases begin at a young age, MacMullen believes that they are “likely to encourage status quo biases in judgment simply by increasing the likelihood that citizens’ early beliefs will favour the status quo.”32 I believe that this is why UNESCO have encouraged education to be considered a global common good, so that governments and educational institutions take this issue more seriously. UNESCO 28 MacMullen, Ian. Civics Beyond Critics: Character Education in a Liberal Democracy First edition. (Oxford, United Kingdom: Oxford University Press, 2015.) p. 185. 29 Idem. p. 187. 30 Ibid. 31 It is beyond the scope of this paper to consider the use of nudges within education, but education systems are constantly nudging pupils. 32 Idem. p. 188. 10 share the same worries in their understanding that education may be prioritising results and formal learning over the informal learning of critical skills. There are many educational issues that UNESCO contend with in their book, but the most pertinent to our cause can be found in the final section, “Education as a common good?” Here the panel of experts advise a prioritisation of the protection of educations foundational principles because international educational discourse have become a results-based business, “(i)t tends thereby to neglect a much wider spectrum of results of learning, involving knowledge, skills, values and attitudes that can be considered important for individual and societal development, on the grounds that they cannot be measured (easily).”33 These are the very skills that if left unlearnt, lead to the behavioural floors that nudges are left to deal with. Thus, UNESCO advise that education be seen as “the organization of learning opportunities as a collective social endeavour”, rather than, “an individual process of skill acquisition”.34 Education ought to be concerned with improving the collective experience of all, rather than individually results focused which shifts attention from critical thinking skills to the memorisation of a curriculum that does not require students to develop critical thinking. This is not to suggest that nudges should no longer be utilized since they will provide advantageous instruments so long as the potential underlying educational problems are corrected, and a more sustainable approach is achieved. Ideally, nudges should serve as temporary solutions, as discussed in the pothole analogy, but it is critical that the underlying issue does not go unchecked or unrepaired. Therefore, the ideal approach is to employ a temporary solution whilst finding a resolution for the larger problem. Although this paper’s hypothesis cannot be proven with empirical data, there is sufficient evidence to suggest that it should be taken seriously because if children are developing detrimental behaviours and habits, then this could be indicative of a systemic problem. Thus, this paper recommends that an investigation be conducted into whether the current education system is failing in its responsibilities to teach essential skills. The results of this investigation might reveal that a certain degree of trust in the status quo may be beneficial to society, but the only way to discover this information is to conduct such an experiment and gather relevant data. 33 34 UNESCO. Rethinking Education Towards a global common good? p. 81. Ibid. 11 Conclusion Throughout this paper we have discussed the hypothesis that Nudge theory reveals a privation of education. We have considered the objectives of Nudge theory and revealed how it clearly serves a positive function in society. Through nudging people, institutions can help people choose to make decisions that are better for them and improve their standard of living. However, we raised the possibility that nudging potentially covers up a more fundamental problem that is creating the need for nudges in the first place. In the same way that a smoke alarm alerts one to a fire, nudges reveal the failings of education systems. We explored the suggestion that the low-cost nature of nudging might be responsible for the reluctance to invest in educational systems and considered the consequences of this. In the final section we explored whether preventing the behaviour of status quo bias should be prioritised by educational institutions and, through the work of Macmullen, we learnt that it seems inertia is actually encouraged by teaching a status quo bias. This led us to hypothesise that UNESCO is encouraging a global focus on improving the valuable informal skills that have been overlooked by international results-based education systems. Ultimately, nudges make up for the lack of training in these skills, which is beneficial in the short term, but presents a much larger problem for the future. Thus, this paper recommends an investigation be conducted into whether international education systems are failing to prevent the development of critical skills in their students and encouraging detrimental habits. 12 Bibliography Ball, Sarah, and Head, Brian W. “Behavioural Insights Teams in Practice: Nudge Missions and Methods on Trial.” Policy and politics (2020.) Castleman, Benjamin L, Francis X Murphy, Richard W Patterson, and William L Skimmyhorn. “Nudges Don’t Work When the Benefits Are Ambiguous: Evidence from a High-Stakes Education Program.” Journal of policy analysis and management (2021). 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