In our new age of democracy and laissez-faire markets, there is an immense sense of freedom and trust in the system. Not only do we have unrestricted competition in the market but also access to widely circulated information due to advancements in technology. Along with the advent of the Internet and the rise of social media usage comes the idea of being monitored on the Internet. When we use the Internet on a daily basis, we are subjecting ourselves to a number of different risks and even while there are “disclosure” or privacy agreements, they scarcely do enough to protect us.
Big corporations have access to and can precisely monitor what we are browsing on the web. Furthermore, they can use this information to specifically cater to our interests and push us to buy specific items through advertisements. While theorists such as Thaler, Sunstein, and Patel would call this “nudging as a form of soft paternalism to help people overcome cognitive or behavioral biases in decision-making,” it is still a level of confidentiality that is being tapped into.
Nudging can be defined as the libertarian paternalistic theory in which certain individuals, dubbed “choice architects” can nudge people towards making the most rational choices. Concerning nudging in the context of a capitalist society, other contemporary political economists such as Robert Reich and David Harvey would doubt the need for such “nudges” and question its authenticity and integrity. Therefore, the idea of nudging in the United States is contradictory within its general motivations as it is at once a way for big corporations and overnment to take advantage of our personal information as well as a means to help individuals make rational choices. However, our ability to make better choices through nudging comes at an expense of not only our personal privacy but also giving up our own power to make decisions. There have been a number of strategies in which corporations such as Facebook can monitor our online behavior. In addition to partnering with third-party websites such as Google, Facebook itself has also come up with powerful algorithms that can manipulate what we see on our Facebook timelines.
One such strategy that has now given way to newer systems was Facebook Exchange, a bidding system that shows people “real time bid ads related to their web browsing when they return to Facebook” As a Facebook user myself, I noticed specifically when my Google searches would appear on Facebook the next second I opened a new Facebook tab. While this startled me in the beginning, I soon got used to it and this is only the tip of the iceberg of the extent to which corporations can monitor our behavior.
While these advertisements are not particularly dangerous, it makes us more inclined to buy these items because they specifically relate to what we are interested in or browsed on the Internet. Therefore, Facebook Exchange may have a behavioral effect on us that extends beyond just a nudge. Before looking at the dangers behind nudging, let us first look at its benefits as put forth by Thaler, Sunstein, and Patel. Thaler and Sunstein consider nudging as “any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. The idea of nudging also goes hand in hand with the concept of libertarian paternalism, the idea that people should be free to do what they like, but it is okay for choice architects to make decisions and influence people’s behavior to help them. Thaler and Sunstein also assume that nudging has positive effects and occurs within the sphere in which people’s behaviors can be altered in a superior way. They argue that nudging can, in fact, solve the problems of traditional regulation in which certain powers can have too much control.
Since nudging is simply pushing people, not forcing them to act a certain way, it is instilling control while still letting individuals make their own decisions. Applied to modern-day technologies like Facebook, Thaler and Sunstein would think that it is okay for advertising to “nudge” people towards buying what they are interested in. Thaler and Sunstein’s perspective on nudging is that it is a way for policy makers to effectively influence the behavior of the population without restricting their freedoms or imposing rules.
However, they disregard the inherent dangers behind influencing the behavior of people without them realizing. Similar to Thaler and Sustein, Raj Patel also assumes that humans do not make the most rational decisions on their own and will support the idea of choice architects aiding people. Humans are not inherently “homo economicus,” or rational beings that make the right decisions although corporations come close. Patel critiques how homo economicus does not take into account other factors such as people being inconsistent about choices or having other motivations for making decisions.
If we take into consideration the behavioral aspects of decision-making, Patel would support nudging to help people make more rational choices. If corporations can be choice architects that are closest to the ideal of homo economicus, perhaps it is okay if they nudge us to make certain decisions. Since the decisions that we make ourselves are constantly shifting due to our tastes and preferences, it may be beneficial for a third party to monitor our behavior.
Applying the concept of nudging to a specific case, Wang, Scott, and Chen did an exploratory study on how nudging works on Facebook. Before starting the study, they generally supported the idea of nudging to positively influence people’s lives and sought to discover how certain types of nudging would influence people. In what they defined as “soft paternalistic interventions that nudge (instead of force) individuals toward certain behaviors,” they tested different types of nudging that would occur whenever an individual wanted to make a post on Facebook.
The first type was a profile picture nudge, in which people would be shown the pictures of five different people who could potentially see this post. The second was a timer nudge that would provide a short time delay before something was posted and give people the option to cancel their post. A third type of nudge was a sentiment nudge that would analyze the content of the post and give potential reactions. Overall, the study made people more aware of their privacy settings on Facebook and altered how they posted content on social media.
However, this study disregarded one valuable factor: the idea that people should be made aware of their privacy instead of “nudged” to make decisions. Instead of having a third party source have access to confidential materials, people simply need to be aware of the decisions that they make, without the interference of choice architects. While the purpose of Wang’s study was “to help prevent users from making online disclosure that they later regret,” it would make more sense for people to monitor their own online behavior.
On the opposing end of Thaler, Sunstein, and Patel are Robert Reich and David Harvey who would be against the idea of nudging in a democratic and capitalist society where people are considered to be free. Reich recognizes that while nudges can provide “private benefits” too people, there will also be “social costs” that can outweigh the benefits. In what Reich’s book titled “Supercapitalism: The Transformation of Business, Democracy and Everyday Life,” he talks about how investors and consumers have made gains in the capitalist system but citizens and the democratic process have fallen behind.
Corporations can now partner with the government and shape policies that benefit themselves rather than citizens. The free market idea of democracy within capitalism ceases to exist when the common good of the people is replaced by a profit motive. Reich would likely not support the idea of nudging as the “promise of corporate democracy is illusory. ” Even if nudging appears on the surface level to help people make decisions, especially in the case of Facebook, there is too high a chance that the corporation will exploit their power for profit gain.
Reich recommends that in order to truly escape corporate power we need to actually “get our thinking straight,” and perhaps not rely on choice architects. Similar to Reich, David Harvey would also doubt the idea of nudging in a supposed capitalist society. Having mentioned the subprime mortgage crisis and the role of state power in his book “The Enigma of Capital and the Crises of Capitalism,” Harvey also revealed how the government’s control over the economy could be its downfall.
Not only did such neo-liberalist ideas of nudging legitimize harsh policies that consolidated the power of the capitalist class, it also ensured that certain corporate and financial institutions were protected at all costs by the state. This defeats the original purpose of choice architects using nudging in a positive way as set forth by Thaler and Sunstein. In addition to the interplay of government and economy, Harvey also describes how the stock market takes on almost a Ponzilike character in which the rich continue to benefit by bidding up asset values and making a profit off of it while the rest of the population watches.
Although nudging could be used in cases of extreme loss such as in global financial crises, it is the fact that power falls into the hands of the wealthy that is concerning. After looking at the pitfalls of nudging, it is important to find a middle ground that can address how it is still possible for nudging to be used in a positive manner. As Bovens wrote in his article “Why couldn’t I be nudged to dislike a Big Mac,” he distinguishes between the conceptions of nudging and prodding.
While nudging pushes people towards making certain decisions, prodding is fundamentally trying to control people. He also discusses the ethics behind health campaigns that are targeted towards making people stop eating Big Macs from McDonalds, as they are unhealthy. Even though this type of a prod is helping people in the long run, there needs to be a classification between when self-determination must be valued. In general, nudging is different from subliminal images as it is not a hidden fact that people are being manipulated as long as they become aware of it.