Paternalistic Economic Policies: Foundations, Implications and Critical Evaluations

Rainer Klump and Manuel Wörsdörfer

Summary

The article analyzes the inherent risks of paternalistic economic policies associated with the newly established economic sub-disciplines of behavioral economics, happiness economics and economic psychology. While the authors in general welcome these sub-disciplines for enriching and critically evaluating mainstream economics - especially their criticism of the Homo oeconomicus ‘heuristics’ is of great value contributing to a more realistic idea of man -, the derived implications and recommended lessons for economic policy should be received with concern and thus be subjected to a critical constitutional politico-economic review. The article also shows that the new economic sub-disciplines are not necessarily accompanied by a paternalistic style of politics; traditional, constitutional-political recommendations can also be derived from the (new) ‘normative economics’: The happiness economics approach by Frey et al., for example, not only avoids the inherent risks of a paternalistic state, it also stands (more) in the Kantian and constitutional economics traditions taking the autonomy and (citizen) sovereignty of people, human dignity and (the protection of) human rights seriously. It thus seems to be better suited for a modern version of Ordnungspolitik.

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ORDO is a forum for the discussion of fundamental concepts in institutional and regulatory economics and their application to real-life national and international problems. ORDO is the only academic journal in the German-speaking world that explicitly specializes in the interplay between economic, legal, political, and social organizational systems.

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