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date: 06 July 2022

Abstract and Keywords

Richard Thaler and Cass Sunstein argue for “libertarian paternalism,” defined as the strategy to devise policy that will “maintain or increase freedom of choice” and at the same time “influence people’s behavior in order to make their lives longer, healthier, and better”. These two goals are often in conflict, and striking the right balance between them has proved difficult in both theory and practice. Where does Adam Smith fall in this debate? This chapter argues that Smith developed his own version of “libertarian paternalism.” It differs in important ways from that of Thaler and Sunstein, but it shares with them an attempt to balance respect for individual autonomy with a desire to help people lead better lives. Smith’s position accommodates the importance of both liberty and paternalism in enabling individuals to construct lives worth living, while avoiding some of the problems that have beset more recent versions of libertarian paternalism.

Keywords: Adam Smith, libertarian paternalism, autonomy, choice, Richard Thaler, Cass Sunstein

James R. Otteson

James R. Otteson is Thomas W. Smith Presidential Chair in Business Ethics and Professor of Economics at Wake Forest University.

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