What, Exactly, Do You Want?

Cass Sunstein at the New York Times: “Suppose that you value freedom of choice. Are you committed to the mere opportunity to choose, or will you also insist that people actually exercise that opportunity? Is it enough if the government, or a private institution, gives people the option of going their own way? Or is it particularly important to get people to say precisely what they want? In coming decades, these seemingly abstract questions will grow in importance, because they will decide central features of our lives.

Here’s an example. Until last month, all 50 states had a simple policy for voter registration: If you want to become a voter, you have the opportunity to register. Oregon is now the first state to adopt a radically different approach: If the relevant state officials know that you live in Oregon and are 18 or older, you’re automatically registered as a voter. If you don’t want to be one, you have the opportunity to opt out.

We could easily imagine a third approach. A state might decide that if you want some kind of benefit — say, a driver’s license — you have to say whether you want to register to vote. Under this approach, the state would require you to make an active choice about whether to be a voter. You would have to indicate your desires explicitly.

In countless contexts, the government, or some private institution, must decide among three possible approaches: Give people the opportunity to opt in; give people the opportunity to opt out; or require people to make some kind of active choice. For example, an employer may say that employees will be enrolled in a pension plan only if they opt in. Alternatively, it may automatically enroll employees in a pension plan (while allowing them the opportunity to opt out). Or it may instead tell employees that they can’t start work unless they say whether they want to participate in a pension plan.

You may think that while the decision raises philosophical puzzles, the stakes are small. If so, you would be wrong; the decision can have huge consequences. By itself, the opportunity to choose is not all that matters, because many people will not exercise that opportunity. Inertia has tremendous force, and people tend to procrastinate. If a state or a private company switches from a system of opt-out to one of opt-in, or vice versa, it can have major effects on people’s lives.

For example, Oregon expects that its new policy will produce up to 300,000 new registered voters. In 2004, Congress authorized the Department of Agriculture to allow states and localities to automatically enroll eligible poor children in school meal programs, rather than requiring their parents to sign them up. As a result, millions of such children now have access to school meals. In many nations, including the United States, Britain and Denmark, automatic enrollment in pension plans has significantly increased the number of employees who participate in pension plans. The Affordable Care Act builds on this practice with a provision that will require large employers to enroll employees automatically in health insurance plans.

In light of findings of this kind (and there are many more), a lot of people have argued that people would be much better off if many institutions switched, today or tomorrow, from “opt in” designs to “opt out.” Often they’re right; “opt out” can be a lot better. But from the standpoint of both welfare and personal freedom, opt out raises problems of its own, precisely because it does not involve an actual exercise of the power to choose….(More)