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Last November, I had the chance to go to Dubai for the first time to participate in the World Economic Forum Summit on the Global Agenda.


One of the most interesting people I met there was Peter Ubel, a practicing physician who is also trained in the ways of behavioral economics and psychology (here’s Peter’s Huffington Post write-up of his Dubai experience).
Peter has just published the book Free-Market Madness, in which he combines both of his areas of expertise. The book’s focus is a critique of unfettered markets. He says:

Think of this attack as one designed neither to defeat free markets nor to force capitalism to surrender, but rather to prevent markets from gaining more territory than they deserve. (p. xiv)

His argument is not that markets are immoral or produce negative externalities. Instead he argues that people often (but not always) make bad or irrational choices. His book is an exploration of “what happens when the invisible hand meets the unconscious brain.” (p. xv)
The marketplace is crowded now with books riffing on the cognitive bias literature (many are monosyllabic — e.g., Nudge and Sway). What’s distinctive about Free-Market Madness is Ubel’s willingness to advocate slightly more aggressive government interventions — or gentle shoves to improve the quality of people’s lives. Instead of merely relying on Nudge-like changes of defaults and informational solutions, he’s open at times to old-fashion command and control regulation.
Peter tells the hilarious story of trying to sell his book to an editor who, after asking to know the bottom-line, take-home message of the book finally asked: “Are you aiming for a nuanced argument?” Peter goes on to write:

“Yes,” I replied, and explained that I planned to write a book that would be both nuanced and captured in a marketable sound bite. I believe I lost him at the word yes. (p. 191)

I find this hilarious because I had virtually the same “Is it nuanced?” discussion with a book editor a few years ago. Potential trade authors beware: Nuance doesn’t sell. But that’s just what Peter has tried to do.
He takes head-on the difficulty of distinguishing acceptable risky behavior (such as sky diving or driving a car) from harder-to-accept risky behavior (such as eating or drinking or smoking to excess). He often resolves the difficulty not with theory but with vivid observations:

I have cared for many patients who, when trying to quit drinking alcohol, have experienced what are known as withdrawal seizures. … I held the hands of a 40-year-old man recently — his belly swollen like he was pregnant with triplets, his skin the color of a faded dandelion — while he cried about his inability to stop drinking beer. In fact, we recently had a patient in our hospital who was so addicted to alcohol that he swallowed three dispensers’ worth of Purell hand sanitizer and collapsed in his hospital room with a blood-alcohol level three times the legal limit. And to return to cigarette smoking, I witnessed dozens of patients, their voice boxes removed because of throat cancer, who, despite having a chance of avoiding a cancer recurrence, still insisted on smoking through their tracheotomies. I cannot equate people who continue smoking with people who can’t get out of L.A. (p. 135 to 136)

There is an undeniable power to these examples — but part of me still wants to deny them. They are all ex-post examples where the state of the world turns bad, and these examples don’t give much weight to the pleasure that smoking and drinking gave to these and other people earlier.
Peter knows there are real concerns with a “nanny state” that restricts citizens’ freedom — as parents legitimately restrict the freedom of an infant, confident that they know better what is in the child’s best interest. He wants to use the lessons of behavioral economics and psychology to provide principles for greater and lesser deference to individual decisions. But I would have been happier with a richer list of specific applications to assure me just what is at stake with this more aggressive assault on contractual freedom.