Libertarian paternalism
Topic: Schools of Economic Thought and Economic Laws · NCERT: Beyond NCERT
Meaning
Libertarian paternalism means steering people towards choices that are better for them while leaving them fully free to choose something else. It is "paternalist" because someone decides which direction is better. It is "libertarian" because no option is banned and costs barely change. Richard Thaler and Cass Sunstein built the idea of the nudge on it (Nudge, 2008). Critics ask who decides what is "better". They also warn that steering which works below conscious thought can become manipulation.
Example
The LPG "Give It Up" campaign (2015) asked better-off households to give up their cooking-gas subsidy voluntarily. No one was forced, and over 1 crore households did so.
Don't confuse with
- Hard paternalism: this uses bans, fines or large taxes, such as outlawing junk food. It removes choices, while libertarian paternalism keeps them all.
- Laissez-faire: under laissez-faire the state does not try to steer choices at all.