‘Nudge’ by Richard Thaler and Cass Sunstein, published by Penguin Books

I chose this book because, during the last few years, its ideas have often been quoted as being behind the thinking of the new government as it tries to change our behaviour in certain areas, without introducing new laws and regulations. The authors are two professors at the University of Chicago who have become well known on the back of this work and its enthusiastic acceptance by politicians in the USA and Europe. I was interested to read about the ideas and consider its application to business.

The underlying assumption behind the book is that most people are lazy when it comes to making choices and, unless they are ‘nudged’, they will take the short-term view or maintain the status quo. My initial reaction to this was that this did not apply to me but then came the killer questions; do you complete questionnaires that will save you money? Do you send back the form that offers the flu jab? Do you walk that extra 50 yards to pick up a free sample?

Therefore, the argument goes, people need to be nudged so that it is easier to make the choice that is in their long-term interests. Many of the examples refer to health issues. Healthy food needs to be at eye level and near to the store entrance; people are encouraged to eat from smaller plates; you have to opt out rather than opt in for injections and free treatments.

This idea is dressed up in rather academic terms by being expressed as ‘choice architecture; the way in which choices are presented so that the ‘best’ choice is the one that is automatic or requires the least effort. The goal is to alter people’s behaviour in a predictable way without imposing rules or sanctions or economic incentives. As an example, putting healthy food at eye level is a nudge but banning or taxing junk food is not.

One problem is that the implementation of this idea causes accusations that governments and do-gooders know what is best for people and that nudging is just another way of creating the dreaded ‘Nanny State’. It can also be an excuse for failing to take decisive action, like recently when Andrew Lansley decided against regulating the food companies and went instead for educating us to eat more healthily.

After reading the book, I was uncertain. My natural inclination is to leave people to make their own choices and let us do what we like to ourselves as long as we are not harming others. But does this mean that people shouldn’t be nudged in the right direction and saved from themselves? I guess it all depends on the issue and the nature of the nudge: OK to put cigarettes out of sight but not chocolate; OK to remind us of the risks but not to forbid us to take them.

The book also raises some interesting issues for business; should employers adopt what the book calls ‘libertarian paternalism’ and nudge their employees to make additional pension arrangements, organise life assurance, have health checks and eat the right foods? Is it any of their business to extend their influence in this way? In the end each company and each government has to make its own choices and, based on the culture it wishes to create, strike the right balance between liberty and paternalism.