Thursday, November 7, 2013

Great post from Don Boudreaux on Ken Arrow and the Virginia election


I kind of take this point like I take Sraffa's critique of Hayek or certain criticisms of marginalism: it's a good reminder to avoid sloppy talk.

I think we can make statements about the public good, we just have to recognize two things:

1. There is no actual actor that is the collective, and
2. What we identify as the public good is of necessity normative even if it is informed by everyone else's utility function.

So I would feel perfectly comfortable talking about the need for an egalitarian society and potentially legislation to achieve that as being in the public good or even an American ideal. I might use language Don would consider collectivist.

I can make the claim quite legitimately that I come to this conclusion based on some sort of aggregation of what other Americans think. It's a rough, back of the envelope aggregation on my part, but it's legitimately an aggregation of individual preferences.

But it's not some sort of objective, uncontestable aggregation of those preferences. Instead it's an aggregation based on my some of my own values as well (which, in fair divinations of the public spirit, is itself derived from public values and virtues). This isn't a useless way of talking about the public good, but it isn't objective either - not in the same way that my preferences are (they are subjective of course, but I can objectively say "Daniel prefers X").

Similarly when we get an election result it's tough to say that it is the public's will. What we have to recognize is that it is one aggregation of individual preferences, and the aggregation is done according to the dictates of a certain set of democratic institutions.

THAT is a fair, objective claim about what this "public will" is.

As Ken Arrow and Don Boudreaux discuss, it's not legitimate to talk about this as an actual sensible preference set on its own. It isn't.

As individuals and as citizens, what we have to decide is whether those mediating democratic institutions aggregate preferences in a way that we like or not.


  1. I agree with you, Daniel Kuehn. But hasn't there been research on the aggregation of preferences and opinions that are not homogenous at all, never mind independent? There was a paper in the Journal of Economic Theory (with Itzhak Gilboa as one of the coauthors) on this not too long ago.

    There's also another working paper on this matter by a pair of economists from Italy dealing with a similar subject.

    1. There are like a bazillion papers on the aggregation of preferences. It's called social choice theory.

      I am not sure your first link falls under this. It's interesting that the second link uses entropy maximization. It's always good to see that the stuff I'm learning in Infometrics is used out there.

    2. Ah yes, I forgot about that domain. And Kenneth Arrow was one of the leading pioneers for social choice theory, right?

      As for the second link...yes, concepts from information theory have been applied to matters toward sub-fields of economics apart from research in econometrics. But I don't think you will be taking concepts that have been applied to social choice theory any writing any research papers on this any time soon right? In any case - has your lecturer on information theory ever mentioned the International Journal of Approximate Reasoning? It's a journal that is classified in the field of computer science (according to the Elsevier website), but it's actually an interdisciplinary outlet - apart from computer scientists, philosophers, mathematicians, and economists have published research in that outlet. I think there is stuff in that journal pertaining to information theory, and I would be surprised if your lecturer wasn't aware of that outlet.

      One last thing - the first author of the second link has published in Social Choice and Welfare not too long ago.

  2. One thing that is worth bearing in mind in that Arrow stressed his theorem applied not only to government, but to all methods of allocating resources in which large numbers of people were involved, including markets. Also, if the theorem is combined with theories of divided minds or multiple selves, they may well imply even an individual cannot have a utility function.


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