Final answer:
Libertarian paternalism is the concept that combines individual freedom with gently guided choices by the state to enhance welfare without coercion. It is related to libertarianism's principle of minimal governmental intervention but allows for subtle influences on individual decision-making to improve societal outcomes.
Step-by-step explanation:
Richard Thaler and Cass Sunstein's concept of "libertarian paternalism" is best encapsulated by the idea that it's possible to steer people's choices in welfare-promoting directions without eliminating freedom of choice. The term essentially suggests that it is both possible and legitimate for governments to design policies that will naturally encourage individuals to make choices that are deemed beneficial, both for themselves and for society as a whole, while still preserving their liberty to choose. Under libertarian paternalism, individuals retain the autonomy to opt-out of such arrangements if they so wish.
Libertarianism advocates for minimal government intervention, suggesting that a government that governs least governs best. It emphasizes that government should primarily exist to protect individuals' rights and discourage coercive actions. In the case of libertarian paternalism, the light touch of the state is designed to influence choices in non-coercive ways, respecting individual freedom while guiding decisions subtly towards more socially optimal outcomes.
This perspective aligns with John Stuart Mill's harm principle, which states that individual autonomy should only be constrained to prevent harm to others. Libertarian paternalism upholds this principle by not outright restricting choices but by nudging individuals toward certain behaviors that minimize the likelihood of harm. It focuses on designing choice architectures that have built-in incentives or nudges for making specific choices, maintaining the essence of freedom while encouraging beneficial conduct.