The idea of libertarian paternalism was popularized five years ago by the legal theorist Cass Sunstein and the behavioral economist Richard Thaler, in their bestselling book Nudge. Sunstein and Thaler argue that policymakers can preserve an individual’s liberty while still nudging him towards choices that are supposedly in his best interests. A classic example is having employees automatically enrolled in a 401(k) retirement account, rather than asking employees to opt in to such a program. The nudge doesn’t stop employees from opting out, and it encourages people to invest in their future, which Sunsteing and Thaler think is in their best interests.
To this, White replies that there is no practical, objective way for an outside observer—even a super-rational economist—to define another individual's best interest. And that undermines the very premise of libertarian paternalism.
Practically speaking, therefore, nudges can’t do what they are intended for—to design a system to help individuals overcome cognitive biases make choices in their best interests—because economists and policymakers can’t understand the full range of motives that determine “best interest” when picking a retirement planning strategy to consuming a sugary beverage. Instead of helping people overcome cognitive weaknesses, policy makers are just nudging people towards the interests that policy makers prefer. "Libertarian" or not, paternalism is paternalism.