“World
of Good” Social-Impact Report 2006, http://www.worldofgood.com/impact/index.shtml
A
“social-impact report”? We
have heard of “environmental-impact report”;
for example, one has to be filed with regard to the disposition of
our Montebello Hills before a decision be made about the hills.
A social-impact report would talk about the probable and possible
social consequences of a planned or existing activity.
To write a social-impact
report about the following idea, you would ask what questions?
For example, what might be the unforeseen and unintended
consequences?
“Choosing
Wisely”
Can 'libertarian
paternalism'
make the
world a
better
place?
Laura Vanderkam, 11 June
2008
In
classical economics, human beings are rational actors. We make choices that
maximize our utility—that is, that make us happier, wealthier, or whatever
we desire most. Averaged over all of society, the invisible hand of these
rational choices should make everyone better off.
It’s
a good theory. Unfortunately, as University of Chicago economist Richard
Thaler and others [Nudge:
Improving Decisions About Health, Wealth, and Happiness,
by
Richard H. Thaler and Cass R. Sunstein,
Yale
University
Press] have demonstrated in the relatively new field of
behavioral economics, most human beings bear little resemblance to these
rational actors. “In many cases, individuals make pretty bad
decisions—decisions they would not have made if they had paid full
attention and possessed complete information, unlimited cognitive abilities,
and complete self-control,” write Thaler and newly appointed Harvard Law
School professor Cass Sunstein in Nudge: Improving Decisions About Health,
Wealth, and Happiness. So they advocate a different approach, which they
call “libertarian paternalism.”
It’s
a clunker of a name, but a fascinating concept: in general, people should be
free to do what they like and to opt out of arrangements that they don’t
like. However, because many
situations require us to choose, it’s legitimate for “choice
architects” (those who set the ground rules for a situation) to make it
easier for people to make choices that will leave them better off—“as
judged by themselves.” If choice architects consciously try to do this,
Thaler and Sunstein argue, we will wind up with better public and private
policies.
The
classic example is saving for retirement. Most of us know that we should be
saving more—but fully 30 percent of eligible employees fail to enroll in
company-sponsored 401(k) retirement plans, even though employers tend to
match employee deposits up to a
point.
Is this because the employees are too strapped to make contributions, even
with the employer match? Apparently not, the authors say, citing data from
the United Kingdom, where a handful of defined-benefit plans don’t require any employee
contribution at all.
They
do, however, require employees to sign up.
Scarcely half of eligible people do. “This is equivalent to not
bothering to cash your paycheck,” they write—something that no rational
economic actor would ever choose.
A
better solution? Rather than requiring employees to opt in, require them to
opt out. This changes the numbers dramatically. One 2001 study found that
under opt-in 401(k) rules, barely 20 percent of employees had enrolled after
three months of employment, and 65
percent
had done so after 36 months. With automatic enrollment, 90 percent of new
employees were participating shortly after joining their firms. ... http://www.city-journal.org/2008/bc0611lv.html
July 31, 2008