Review on lecture by Cass Sunstein – How Change Happens

On June 3, Harvard professor Cass Sunstein gave a lecture at the invitation of Netspar and Tilburg University about one of his books published this year: “How Change Happens”. In addition to academic expertise, Sunstein also has political experience, namely as an adviser to Barack Obama. He used that position to take into account the power of the standard choice in policy: what you choose if you do not make an active choice. For the pension domain that is pre-eminently relevant now that employees can and must choose more, and there are more people who do not save in the second pillar.

In his lecture, Sunstein discussed a different kind of choices: how are societies transformed? Sunstein outlined three factors that play a role: 1) people do not behave according to their own preferences if they think they deviate from what others want; 2) people are guided to a greater or lesser extent by what others do; 3) action depends on whether people can observe the behavior of others. The first two factors cannot be measured, with the result that large revolutions are unpredictable. Lenin was surprised by what he achieved, the same applies to the French revolutionaries, perhaps also to Trump, and to the victims of Weinstein who generated #metoo.

What can we learn from this for the Netherlands and in particular for pensions? In any case, we cannot predict whether and when Dutch people will take to the streets if they are dissatisfied with institutions – except if they are organized by, for example, trade unions, but in the definition of Sunstein this is not a revolution but a representation of interests. The wait is sooner whether unorganized people – starters without a housing perspective, without an employment contract, and without a pension build-up – take spontaneous and massive action. And if so, whether they force change with it.