No 10’s controversial “nudge unit” has been spun out into a company – but it hasn’t fallen far from the nest. The 16-strong Behavioural Insights Team (as it’s known) will become a private entity and will be able to tap into cash originally set aside for fledgling inventors.

It will then sell its services back to the government and, if all goes well, other governments and organisations.

Former quango now-charity Nesta will provide £1.9m funding for the Unit’s experiments, and the government retains a 30 per cent stake in the new venture.

“Pretty well wherever you see humans and bureaucracy you can use behavioural insights,” claimed the Unit’s head, David Halpern.

The Unit was established as a result of the result of enthusiasm from Conservative thinkers including David Willets, Oliver Letwin and Danny (now Lord) Finkelstein for the book Nudge by Richard Thaler and Cass Sunstein. It suggested that new psychological insights could allow governments to steer people towards desired top-down choices without people realising they were being manipulated.

Cameron recommended this introduction to “new psychology” as summer reading for all his MPs, and before long Osborne was teasing the then-PM Gordon Brown that: “The Conservative Party is now the party of ideas in British politics”. Willets gushed that “the extraordinarily exciting convergence of evolutionary biology, game theory and neuro-science” was “[confirming] Conservative insights”.

But Cameron and Osborne had been sold the sizzle, not the steak.

Beneath the clumsy jargon of this “new” psychology (rife with ad hocneologisms like “choice architecture” and “framing”) is a world in which humans are rats in a lab experiment – fearful and imitative, responding simply to crude physical stimuli like shocks or flashing lights.

The “model human” that Nudge constructs lacked moral autonomy – the ability to make sensible choices (surely part of any respectable Conservative, or even any humanist tradition). People may indeed make odd choices, but their reasons for doing so may be complex and subtle. They may include culture and tradition, for example – but there’s no room for this in the mechanistic Nudge account. Nor is the difference betweenus a factor – some of us are risk-thirsty, others risk-averse. Context is everything, and the crude reductionism of Nudge discards much of this context.

There are other perils for policy-makers too. It absolves the political elite from creating bold or optimistic ideas and explaining to them us, the electorate, as if they we are grown-ups. As one critic cpointed out, “it cannot make a poor healthcare system into a good one and it cannot generate competing visions of a better tomorrow where none exists.”

You can’t Nudge your way to a better NHS.

Unravelling the myth of the Nudge Unit’s ‘success’

The tangible successes of the Team have been elusive and anecdotal, and can largely be explained by better design. Note that “better design” as opposed to “new behavioural insight” requires no psychological or pseudo-scientific woo attached. It doesn’t need a Behavioural Team. Take for example the Team’s widely reported “success” regarding an apparent increase of the number of annual organ donations in the UK by almost 100,000.

“The methods have proved surprisingly effective,” trills the Financial Times. New wording urging potential donors to register is “expected to deliver 100,000 more donors each year.”

“Channelling the power of reciprocity, is expected to deliver 100,000 new organ donors each year,” echoes The Independent newspaper’s editor – who goes on to say the government should harvest everybody’s organs without consent, by default.

So is this a huge success for “new psychology”, then? It’s actually nothing of the sort. In its organ donor experiment (detailed here (PDF)), the Behavioural Insight Unit introduced an appeal for donor registrations onto web pages where the appeal hadn’t been seen before, such as the DVLA website.

It trialled eight different designs. Some designs emphasised guilt, “Three people die every day because there are not enough organ donations”, while others tried a different emphasis: “You could save or transform up to 9 lives as an organ donor.” (Transform for the better, one assumes: and only if you’re not Shaun Ryder).

But all the designs increased registrations, slightly, by almost identical amounts – with the difference between the “most effective” and the “least effective” designs was not significant. The least appealing design increased registrations by just over two per cent. The best performing design by just over three per cent. And the difference in response between the “reciprocal” and the “guilt” wording was less than 0.1 per cent. What made more difference was including a picture of people in the appeal.

So it’s difficult not to conclude that the act of placing an appeal for organ donor registrations where it they had not appeared before (such as the DVLA, or plastered all over the NHS website) was actually the most important factor here. And that the “reciprocity” is just feel-good guff.

Another trial cited as a success was increasing the proportion of court fines paid by sending a text message reminder. Is this an example of “new psychology” or “behavioural insight”, or simply the bureaucratic machinery catching up with a world where we have received travel alerts and football scores by text message for many years?

In fact, there has been no new understanding of psychology in the past 20 years. But there has been a huge increase in wonks and consultants – particularly wonks who can justify the bureaucracy doing more tweaking and prodding. Nobody needs to go poor or hungry today if they advocate poking or nudging us. It has become a self-perpetuating gravy train.

Nudge illuminates just one puzzle of life: why politicians often appear to think we’re stupid. Thanks to their enthusiasm for “behavioural insights” we can see the answer to that one. It’s because they really do think we’re stupid.