Does the Government know enough to tell us what to do?

23rd August 2011

Phrased like that, most people would say no.

How about, is it right for the Government to try to improve the health and wellbeing of citizens by using well established business principles?

That's more likely to get a yes.

It's relevant because the Government's Behavioural Insights Team (the "nudge unit") got a massive thumbs down from the Lords' Science and Technology Select Committee under Baroness Neuberger.

They were supposed to be using "behavioural insights" to help the public to make better decisions on health and wellbeing.  Of course, they failed to show any useful results. 

The science of behaviour is psychology. 

One of my friends made a freedom of information request to find out how many psychologists they'd got in the BIT.  A psychologist in these terms is one who is qualified, registered with the HPC and chartered by the BPS (like me). 

The answer, how many in round figures, was a truly round figure. 0

As with the happiness index , the Government went for political appointees, not experts.

Naturally, the things that the BIT did, and that the Lords' Committee rubbished were things that they would have known wouldn't work, if they'd asked the right people.

Like giving people "traffic light" warnings for high sugar and salt content foods. 

It's well established that giving people more information will, in most cases, lead to confusion and either no decision at all (like deferring pension planning until after retirement) or a worse decision.

The sort of things that effectively change behaviour are also well known.  Simply go round a supermarket.

The fresh fruit is at the front, it welcomes you, makes you feel healthy and virtuous. 

Milk and bread, that you nip in to get every day or so, are right at the back, so you'll see as many products as possible that you might buy.

The high margin items will be at eye level (women's items an inch and a half or so lower than men's and a foot or two above children's) so that they are the things you see easily.  Sale items will be at the end of rows where you will slow down with your trolley, low margin items will be out of your eye line.

The supermarkets (and any store that actually wants to make a profit) shape your decision making in multiple ways – exactly the same as the BIT was supposed to do.

One difference is that the supermarkets are good at it and employ professionals, the Government are poor at it and employ political allies and amateurs.

Their naive assumption is that with enough information people will buy a balanced diet, but who does that since food rationing was abolished? 

You can throw information at them, like the "traffic light" scheme but people can't cope with the information they already have. 

If you call in the professionals (psychologists, especially the ones who work with marketers, supermarkets, businesses etc.) you get designs that actually influence people – in exactly the same way as the supermarkets do.

The other difference is that you then design ways to influence people to eat healthily, to economise etc., rather than to spend more money in your particular shop.

The question then becomes, should you? 

And that is where we came in. 

It's an ethical argument, like should Government ban smoking, should it refuse to pay public money for weight reduction surgery caused by overeating etc. 

If there is anything that you think the Government ought to do – tax the rich, protect public health, encourage responsible behaviour and not rioting, whatever- there are several ways to do it. 

You can order it or forbid it, which tends to bread resentment and confusion (what exactly is the "smoking area" and how do you confine the smoke?), give people information about it, which doesn't work (how many people gave up smoking because of the warnings on the packets),or you can use some sort of beneficial manipulation of people's mental habits (an extreme example would be make cigarettes so expensive that people have to think before buying). 

Only the last one works – but unfortunately the BIT didn't know it.

The question is ethical, the fact that you can doesn't mean that you should, as once the genie is out of the bottle you can't get it back in.  You can't stop the supermarkets influencing people now, even if you think it's immoral. 

But if Government is going to try to control behaviour in some way (by law, by making it a police state, by giving people information or appealing to their better nature or their natural good sense and long term thinking) mightn't they at least consider doing something that will work?


Kim Stephenson is an occupational psychologist and trained financial adviser.

His website Taming the Pound is aimed at helping people get control of their thinking about money, so they can use their money – and avoid their money using them.

More from Kim on Mindful Money:

Warren Buffett is a genuis

I love a market with a happy atmosphere

Sooner or later it's bound to work – isn't it?  

Why a great leader doesn't always make for a great business.

Financial regulation: Why bother at all?

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