Private acts, social acts and entrepreneurship: Can Millian liberalism justify regulation against bad nudges?

Retail firms routinely use non-deceptive ‘nudges’ (i.e., psychological cues) to induce consumers to buy their products. Le Grand and New (Government Paternalism, 2015) and Oliver (A Political Economy of Behavioural Public Policy, 2023) argue in favour of regulations (‘budges’ in Oliver’s terminology) that prohibit such nudges when regulators judge the relevant product to be harmful to consumers. These writers claim that such regulations are compatible with John Stuart Mill’s Harm Principle. I examine this claim through a close study of Mill’s relevant writings. I show that, when Mill explicitly considers issues analogous with present-day discussions of nudging, his position is broadly similar to those taken by Le Grand and New and Oliver. However, he is able to take that position because his mental model of a competitive market is that of early and mid-nineteenth century political economy. That model does not represent the entrepreneurial mechanisms by which competitive markets can support and promote what for Mill is a fundamental human value—the value of individuality. If the role of entrepreneurship is recognised, Le Grand and New’s and Oliver’s justifications for regulations against non-deceptive but supposedly harmful nudges are contrary to the spirit of the Harm Principle.