Ever hear the ancient maxim “de gustibus non est disputandum” mentioned in the context of neoclassical economics? Do economists still use that phrase? Back in the old days, it was just a rather pretentious way of saying that in modern neoclassical welfare economics we’re not meant to second guess other people’s preferences when thinking about “utility.” There are some fun issues there that don’t involve my usual concerns relating to resolving interpersonal conflicts of preferences. Maybe we can spend a post or two on normative issues in this often neglected no-conflict case?
The use of the de gustibus principle in neoclassical welfare economics derives from the way we define “utility” in that theory, or rather the two ways we define it: preference rank utility (typical, explicit) and internal perceptions of satisfaction from preference fulfillment utility (occasional, implied).
Do I really have to say it every time? Fine. I’m talking about neoclassical welfare economics right now, the economic theory that underlies bad economics of the conservative sort. I’m not talking about general “welfare analysis,” where one defines “utility” any old way. In general welfare analysis one can, of course, dispute other people’s preferences all day long. Why not? One can do whatever one likes. The sky’s the limit. General welfare analysis may also lead to bad economics, but not the sort I mean here.
In neoclassical welfare economics proper, one can’t dispute other people’s preferences under the now conventional preference rank utility because all one is talking about with “utility” is someone’s preference rankings. There’s nothing beyond that on which to hang a dispute. Under the older and now less common but still occasionally used or at least implied internal perceptions of satisfaction from preference fulfillment utility, one can’t dispute other people’s preferences because one doesn’t have access to the relevant internal perceptions. It’s not a matter of common sense suppositions, inferences, assessments, etc.
Continuing a point from last week, say someone is about to eat a poisoned apple he or she may or may not realize has been poisoned, but we do. That’s their preference, to eat the (poisoned) apple. Should we stand idly by or dispute their preferences? Dispute? How? “Hey, buddy, your preferences are all wet! That’s a poisoned apple, that is!” Too common? Fine, cue the simplifying thought experiment. Let’s say we can’t dispute by providing the potentially missing information in a way the person can understand, we can only allow or prevent him or her eating the apple.
According to the ostensibly uncontroversial normative proposition at the core of neoclassical welfare economics, we should allow the person to eat the poisoned apple because that’s his or her preference, which we’re not disputing, and there’s no interpersonal conflict to muddy the water. In the idiosyncratic and misleading argot of economics, we’re “maximizing” total social “utility,” by doing nothing in this case, and the person in question is, of course, “maximizing” his or her own personal “utility” by expressing his or her own preference.
Is that something you would support? No, I’m just asking. I get it. Maybe he or she likes poisoned apples. Maybe he or she wants to make a grand gesture, dramatically biting the offending apple and descending gracefully to the ground in an elegant swoon, declaring on the way down, “I meant to do that!” And if not actually intentional, what do we care if he or she hasn’t chosen to expend sufficient energy investigating the status of the apple to discover it’s been poisoned? That’s not our responsibility, is it? We’re not that person’s nanny. “Drop dead, dumbass!” Don’t upset yourself now. I can see the other side as well. Maybe it would be better to intervene, just to make sure we’re all on the same page as far as the latest information on the apple? Maybe try to explain a little something about the science? If relevant, maybe discuss the potential suicidal ideation a bit? Do something beyond standing idly by watching the show? My point is not to provide an answer but simply to suggest there may be some controversial ethical issues that bear discussion even here, in the ostensibly obvious no-conflict case, but if one listens to purveyors of bad economics explain the relevant normative principle, one may never realize it. Why? Well, let’s just say they don’t try very hard, do they?
But wait. Is poisoned apple eating really that person’s “preference,” per se, in the sense we have in mind in neoclassical welfare economics? Isn’t the normative proposition about social utility meant to apply only when we have “perfect information” and so on? No, I don’t think so. Perfect information and so on are typically introduced at an entirely different level of the theory, when thinking of the conditions of so-called “perfectly competitive market,” an atypical, ideal, possibly entirely unreal theoretical construct. Actually, I don’t recall even mentioning the existence of markets in my thought experiment, did I? Is that significant? Are the normative propositions about “utility” in neoclassical welfare economics meant to apply only in a market context? If so, it’s news to me. Anyway, maximizing social utility is meant to always be good, isn’t it? Not just under unusual, ideal market conditions? No, I’m just asking. Funny how the ethical propositions of normative neoclassical welfare economics remain opaque after all this time, isn’t it?
And while we’re here, what is “perfect” information, anyway? Our belief the apple has been poisoned, based on whatever evidence, data, scientific reasoning we used to determine that? The bit of potentially false information we think the other person should know about? Because that’s actually all we have. I wonder, is “perfect” information even a real thing, or is it something only medieval monks and small winged creatures in the Fairy Land have access to? Well, I guess if we’re making things up, sure, let’s call it perfect information. Why not? Modeler’s Omniscience. Oh the power, the awesome power! And how about the companion piece, “perfect” rationality? No, not normal human levels of rationality. Perfect rationality. I’m talking Mr. Spock, on Vulcan, in full meditation mode. Is the poisoned apple eater perfectly rational? Are we perfectly rational? Well, I’m not sure. I suppose it depends.
Oh, heck, let’s just skip to the bottom line. According to the normative argument presented in neoclassical welfare economics, is the poisoned apple eater’s “utility” being maximized or not when he or she fulfills his or her preference and eats the apple, which we know has been poisoned but he or she may not know? Is it good or bad? Should we intervene or not, if that’s our only option? What does normative neoclassical welfare economics suggest? Not entirely sure, but I think it must be good, right? Ethics can be fun, albeit a tad confusing, when one uses random, false, unreal factual premises and casually defined terms. But that’s why people don’t study philosophy, isn’t it? So they can babble away about ethics without undo restraint? Keep things unsuitably simplistic? If you found that amusing, you’re in for a real treat in my other posts, because issues in the no-conflict case are a relatively insignificant side show compared to what happens when we apply normative neoclassical welfare economics in the context of resolving interpersonal conflicts of preferences, allocating scarce resources, etc., my usual focus.
Hey, here’s an idea. Take the normative content out of economics. Flag requisite normative or ethical inputs as such and receive them on a recurring, contingent basis from the people via democratic government. Make economics a science, at long last. Fulfill the dream. Oh, did I say that idea before? A million times? Well, let’s make it a million and one and call it a day, shall we?
