Paternalism in Economics: Redefinitions and the Behavioral Turn

In this chapter I analyze whether economic theory possesses the necessary tools for assessing freedom of choice and paternalism adequately. First, I discuss how economists refine their analytical tools and redefine the concept of paternalism in order to fit the latter in the methodological framework of their discipline. I argue that the traditional economic approach is a non-reflexive mixture of liberalism and utilitarianism. As such, it is ill-equipped to handle the problems that arise when these two principles collide. Economics has striven to justify instances of reasonable, seemingly paternalistic regulations in several ways, often deliberately avoiding the term paternalism. I distinguish several types of this theoretical strategy of redefinition. The methodological lesson of this overview will be that if economic analysis should understand paternalism and have an impact on public debates about paternalistic policies it should both reconsider its normative assumptions and rely more systematically on empirical research.