Nudge vs. Lovemark
A few days ago, I was writing an article on “Mencius vs. Han Feizi.” As an instructor majoring in Chinese philosophy, I know the difference between the philosophy of Mencius and that of Han Feizi. Two scholars were living in the Warring States Period in ancient Chinese history before Jesus Christ was born. Mencius the Confucian put a great importance on emotions and claimed that the decision making by emotion is right. We have to follow our emotion and take care of each other’s emotion. Emotion-driven life is the essence of happiness.
On the contrary, Han Feizi the legalist argued that the citizens are ignorant and irrational. Therefore, what the government has to do is to control the emotions of the citizens for common good. He surely knew that the citizen’s emotions are important, but that does not mean that he respected them. Instead, the founding father of the Chinese legalism argued that the policy makers should butter people up to take control of them. Without a doubt, it is the Chinese version of Machiavellism. But Han Feizi was not an evil man. Out of paternalism, he thought that the rational government should take care of the irrational citizen as father does to the kids. As Gothel from Tangled sings, “Mother knows best!” But wait a minute, what was the ending of that animation? And what was the lesson from that movie?
During the coffee break, I was lucky enough to bump into the news article Nudge Debate by David Brooks. In that article, he pointed out the problem of “Nudge Politics” by saying, “But this raises a philosophic question. Do we want government stepping in to protect us from our own mistakes? Many people argue no. This kind of soft paternalism will inevitably slide into a hard paternalism, with government elites manipulating us into doing the sorts of things they want us to do. Policy makers have their own cognitive biases, which will induce them to design imperfect interventions even if they mean well.”
After reading this article from beginning to end several times, I talked to myself, “Man, this is another version of Mencius vs. Han Feizi!” But hang on! I am not saying that Mencius was like a neoclassical economist. Mencius thought that emotions are precious. On the other hand, Homo Economicus the icon of neoclassical economists does not care about other people’s emotions. As a matter of fact, Homo Economicus itself was theorized not to have emotion! Now, we can see the difference.
In my opinion, Kevin Roberts, the author of Lovemarks, is the 21st century Mencius. He wrote in his book, “Marketing people talk about emotion. They present charts and diagrams, even raise their voices and wave their arms, but fundamentally they treat emotion as...out-there, felt by someone else and able to be manipulated.” As CEO Worldwide of Ideas Saatchi and Saatchi, he knows the importance of Consumers’ emotions. But he dares not to manipulate them. Instead, he urged the company to become the loved brand. And he calls the loved brands “Lovemarks.”
Now, let’s turn to see the difference between Lovemark politics and Nudge politics in terms of emotion. Lovemark politics states that a decision made by emotion is right. On the other hand, Nudge politics argues that a decision made by emotion is not right. We cannot directly say it is wrong, but it is rather irrational.
In Nudge politics, as a consequence, the government indirectly manipulates the citizen's irrational emotions into making rational decision. Behavioral economists calls it "nudge", but I believe that nudge is nothing other than indirect manipulation of the citizens' mind by government. It is nothing new, actually. In consumer behavior theory, they use the term "decoy effect" instead of nudging. Supporters of decoy effect believe that the company is more rational than the customer. But Kevin Roberts asserts that such kind of old shady tricks are cheap. Those are not sustainable in business and savvy consumers will come to realize what is going on in no time. Companies of the 21st century should not try to manipulate the consumer's emotion. That kind of strategy will not work any more. Instead, the company has to respect customers' emotion. Then the customers will love the company in return, saying "my loved brand." Roberts coined the word "lovemarks" to explain the brands which are passionately loved by the consumers as we saw before.
Out of their own bounded-rationality, behavioral economists believe that citizens are not smart enough which is not true. And out of their libertarian paternalism, they try to seduce the irrational citizens to choose the decision of which the rationality is guaranteed by the government. That's the whole trick, Another Statism coming, but in a more mysterious and sophisticated way.
I hear Richard Thaler complaining. He would say, "I did not try to manipulate the citizen's decision making. I just secretly pave the way for common good so that the citizens unconsciously follow it." Mr. Thaler, I do believe that you are a good person and all you do is nothing to do with your own benefit. In fact, I am your big fan and really enjoy your book. But let's sleep on it. You use your psychology to limit the choices and let the citizens "voluntarily" pick up your choice. I have no idea why such a brilliant economist like you do not see the problem in it.
I do believe that every government should be the lovemark of its own citizens instead of nudging them. The lovemark governments do not nudge the citizen's emotions, only respect and learn from them. Citizens do not want to listen to their government simply because they are not loved and respected by that. Citizens are as rational as government. As Jesus said, "Do to others as you would have them do to you." No need to nudge.
All is well.
