Diminishing Marginal Utility Of What Now?

Last time I mentioned one way people try to link normative economics in a macroeconomic context and a neoclassical welfare economics context involves the concept of diminishing marginal “utility.” Let me say a few more words about that this week.

Diminishing marginal “utility” is the idea any given individual’s preference rank (“utility”) for units of any particular good or commodity tends to fall with the number of units of that good consumed, so one prefers the first unit to the second, the second to the third, etc. The concept seems straightforward and plausible enough in certain contexts, which are the contexts usually used when describing or explaining it. For example, if one is eating cheeseburgers, in one sitting at least, one may well prefer the first to the second and so on. However, in other contexts it seems rather less obvious. It’s commonly referred to as a “law,” although in economics a “law” is often just something economists need to make some equation or model work out. A law of the Fairy Land, so to speak, not of reality. So not sure I’d take it all that seriously, but often plausible enough.

Like many elements of economic theory, the seemingly simple concept gets complicated rather quickly if one starts thinking about it in a context other than the preferred, best case, least potentially problematic context. Way back then, Alfred Marshall discussed the concept in the context of a “specific commodity.” However, one sometimes sees the concept applied to consumption of all goods or commodities generally or even the economic power (money) making at least some of that consumption feasible. It seems a little less intuitive the marginal “utility” of consumption in general or economic power (money) declines with the units consumed. Indeed, I sometimes wonder if the idea is being inappropriately conflated with revealed preference arguments. Revealed preference says if someone has a choice of A and B and chooses A, then for that person A tautologically has higher “utility” than B. However, that reasoning doesn’t work if B is not really capable of being chosen, given one’s current economic power. If one accepts A as a sort of stop gap to save up an additional unit of economic power to get preferred B, it become a bit odd to suppose the “utility” of the second unit of general consumption B, or the instrumental economic power (money) to get it, was less than the first.

Fortunately, none of this really matters for our present purposes. One can think of diminishing marginal “utility” as a law or not, applying to general consumption or not, applying to economic power (money) or not, endogenous to neoclassical welfare economics or not. I’m just setting the stage. My main point here is that accepting diminishing marginal utility of economic power (money) or general consumption alone is insufficient to link the normative argument about “utility” from neoclassical welfare economics to the one about issues of concern in macroeconomics. We’re not really going to get anywhere in terms of linking up those two normative theories until we have some way of calibrating the “utility” of economic power (money) or general consumption of different people. That is to say, one’s marginal “utility” of economic power (money), general consumption, or really even specific goods, may diminish a great deal yet remain logically incapable of being compared to someone else’s undiminished “utility” or indeed greater than it. The former is the case with preference rank “utility,” while the latter is a possibility with inaccessible internal perceptions of satisfaction from preference fulfillment “utility,” which are the two types of “utility” relevant to neoclassical welfare economics. However, if we propose some interpersonal calibration such as that the “utility” of the initial unit of economic power (money) or general consumption is the same for everyone and diminishes from there, then we can link “utility” to endpoints of interest in macroeconomics. 

The addition of that exogenous ethical content clearly takes us out of the world of neoclassical welfare economics proper and into the world of “general welfare analysis,” which also takes us out of the realm of the bad economics in the conservative style that is my focus. In this case, we're talking about an ethical theory based on human equality and commonsense notions of human welfare, akin to many traditional forms of real utilitarian ethical philosophy, not the ethical half-theory in neoclassical welfare economics. That is to say, it’s not an ethical theory that places special significance on someone’s most highly ranked preference if that preference happens to require immense economic power to accommodate, it’s not about preference rank based “utility,” albeit maybe another sort.

General welfare analysis is just economists trying to do ethics in a somewhat more comprehensive way than in the ethical half-theory of neoclassical welfare economics, by manipulating “utility” in incongruous ways or just redefining it wholesale. As I noted before, it can lead to anti-democracy bad economics involving technocratic overreach of ethical decisions that belong with the people and democracy, but not the rhetorically sly, misleading, conservative, variety I typically discuss. Again, it’s fine if one is making explicit normative or ethical arguments, identifying the issues, helping people evaluate the normative inputs and conclusions for subsequent democratic decision making, doing proper ethical philosophy. That’s not what I’m talking about when I talk about bad economics in the conservative style, which involves a sort of bait and switch, a contention one is confining oneself to one set normative inputs then not actually carrying through on that, instead adding other normative inputs in obscure, unannounced ways. 

I suggest we don’t pay enough attention to normative economics in various contexts like neoclassical welfare economics, bad economics in the conservative style, and applied macroeconomics, or relating them to one another, general ethics, and political democracy. Normative economics generates the lion’s share of confusion and conflict relating to economic issues and policy. Real economic policy always involves often controversial and contentious normative issues. Economic policy must and will address it, one way or another.

Normative Economics Four Ways

I strayed into somewhat unfamiliar waters recently, normative economics in a macroeconomic context as opposed to my usual neoclassical welfare economics context. Maybe I should say a few more words about that this week. Interesting area. I took up the issue before not so long ago, but not very satisfactorily.

Normative economics in the context of neoclassical welfare economics is about things like “utility” defined in certain ways, Pareto optimality, economic efficiency (defined with respect to “utility”), market structure, market failure, “optimal” economic arrangements, etc. Neoclassical welfare economics is considered a branch of microeconomics despite dealing with markets, economic systems, and other macro scale issues because of the method, the focus on individual behavior, if not of real people, then at least of theoretical ciphers. It’s the familiar sort of normative economics I’ve been suggesting for the last couple of years is closely related to what I call anti-democracy bad economics in the conservative style, which I contend misinterprets it, plays games with it, uses it for rhetorical and political purposes. The sort of bad economics in the conservative style I have in mind is the sort that sees no particular role for democratic government, neglects the ethical half-theory structure of neoclassical welfare economics, tries to slip in additional ethical propositions, etc.

Confusingly, neoclassical welfare economics shares the “microeconomics” category with so-called “general welfare analysis,” which explicitly introduces additional normative propositions that often invalidate or contradict the conclusions of neoclassical welfare economics itself. “General welfare analysis” is not a defined normative theory like neoclassical welfare economics, but a limitless collection of normative or ethical theories involving individual economists adding whatever normative propositions strike their fancy, including potentially quite controversial ones, and playing with factual premises. That means normative economics in a general microeconomics context, as opposed to a specifically neoclassical welfare economics context, is not well defined and can be anything really, depending on the interpretation and manipulation of “utility” and other model elements.

In contrast, normative economics in a macroeconomics context concerns not “utility” but various economic metrics like total output, growth, inflation, unemployment, wages, etc., weighing them against one another and against various ethical issues relevant to economic policy. Like what ethical issue? Well, like those associated with the definition, distribution, and use of economic power in market to resolve interpersonal conflicts of preferences that are exogenous to neoclassical welfare economics, so human welfare, fairness, equity, rights, etc. The normative or ethical arguments that feature in applied macroeconomics, real policy recommendations, part of what I’m calling a macroeconomic context, are not explicitly discussed in macroeconomic theory. As far I know, the theory contains no explicit normative reasoning, as I’ve mentioned in previous posts.

Unlike most neoclassical welfare economists, who are quite often concerned to deny their theory has normative content or are cagey or confused about its limits as an ethical half-theory, macroeconomists seem quite comfortable with their own normative activities. I’m not a macroeconomist myself, but one fellow informed me recently macroeconomists begin their study of the ethical and normative issues involved in their policy recommendations as early as Macro 101, not to be confused with the rather more infamous Economics 101. I suppose one might thus consider macroeconomics anti-democratic in some ways by presuming to technocratically decide normative or ethical issues and tradeoffs one may think more suitably addressed by the people and democracy because of their subjective nature. The penchant of macroeconomists for talking about The Economy as a machine or organism, and giving their policy recommendations in terms of velocity, heat, tightness, health and so on, rather than explicitly in terms of the ethical issues involved, adds to the problem. If one is the ethical arbiter for society, the least society might reasonably expect is to hear clear discussions of any ethical decisions or tradeoffs involved, rather than opaque metaphors that neglect to mention people, tradeoffs, ethics, etc. However, that sort of opaque, technocratic overreach in social decision making is really a rather different issue from the sort of anti-democracy bad economics in the conservative style based on misinterpretations of neoclassical welfare economics that is my main focus.

My general point is that neoclassical welfare economics and applied macroeconomics represent two distinct types of normative economics based on different goals, using different arguments, with adherents viewing themselves differently related to normative issues. However, it’s not unusual for people to want to link them in various ways. Sometimes people simply get them twisted and, for example, conflate “utility” with money or output, or equivocate on “efficiency” defined with respect to “utility” and to output. Sometimes people link them explicitly, for example, in microeconomic general welfare analysis by adding exogenous normative propositions to neoclassical welfare economics to manipulate “utility” using “social welfare functions” to link it to macroeconomic concerns. The notion of a diminishing marginal “utility" of economic power (money), total consumption, etc., is an interesting example of an attempt to link the two arguments. I thought I might say a few words about it here, but I’m already pushing it, so maybe save it for another day.

Positive economics is well and good, but if one spends all day discussing philosophy of science, I suggest one is neglecting the part of economics that generates the lion’s share of confusion and conflict, and often supports anti-democracy sentiment: normative economics. One might want to spend a few moments on normative economics in the contexts of neoclassical welfare economics, bad economics in the conservative style, microeconomics including general welfare analysis, and applied macroeconomics. It’s a fun, interesting, timely area. 

The Production Efficiency Versus Equity Tradeoff

Last week I went over the false “economic efficiency (defined with respect to “utility”) versus equity tradeoff” and looked briefly at the “production efficiency (defined with respect to output) versus equity tradeoff.” Let’s look at the latter again this week.

First, let me just make a general comment about tradeoffs. One can have a positive tradeoff, or one can have a normative tradeoff, but one can’t really have a tradeoff where one argument is positive and the other normative. A positive tradeoff is an inverse relationship between two empirical phenomena or two logical / mathematical results. A normative tradeoff is an incongruity between two normative or ethical values such that one must be weighed against the other. Two different things. It follows that for something like a “total output (or equivalently, production efficiency) versus equity tradeoff” to be sensible as a tradeoff, we must either interpret “equity” as an empirical phenomenon, or we must attach normative value to “total output.”

Let’s first consider the positive tradeoff. Some person or other may suppose distribution of economic power X “equitable,” so the potential positive tradeoff is between economic output and distribution of economic power X, not the concept of “equity,” in general. Equitable means fair, not necessarily equal, but let’s say X is some distribution of economic power more equal than the status quo distribution, and someone feels that result more ethically justified or fairer on some basis and hence more equitable. Common enough view. In that case, we’re talking about a potential positive tradeoff between total output (or production efficiency) and more equal distribution X, not between total output and “equity” or distributional concerns in general, possibly involving fairness, human welfare, rights, etc. The answer to a positive question like that is to scientifically investigate the potential tradeoff to see if the relationship holds and what the tradeoff actually is. If economic power is more equally distributed, does output go up or down and, if so, by how much? Why might it go down? Incentive effects? Sabotage? Why might it go up? Possibly more robust demand, fewer human resources lost to poverty and an inability or restricted ability to express ideas, talents, effort, etc. Interesting positive question. Not dispositive normatively, of course. We pay for a number of things we think make our society more ethical. We spend resources on police, our justice system, prisons, etc. If we do indeed need to pay something for distribution X, we as a society may decide to do it or not. And, of the course, total output may not be the only empirical phenomena that might vary with the distribution of economic power X and be normatively relevant to this issue. We may need to consider effects on crime, health, resources, happiness, etc. Just saying, positive effects and tradeoffs may be relevant to normative issues, but they aren’t the normative issues themselves. Don’t suppose when you solve some positive issue you necessarily solve potentially related normative issues.

Next let’s consider the normative tradeoff. What normative content might we attach to total output that would make sense of a proposed normative tradeoff with the ethical concept of “equity,” in general? Might the relevant normative value really involve just total output? Consider this funny counterfactual, what if “total output” went to no one? What if we put it on a rocket ship and just distributed it to outer space? Does that matter? If so, then the normative value is not really about abstract, disembodied “total output,” it’s about people. In that case, the normative tradeoff involves the value of enhancing at least one person’s material situation in some way and the value of living in a fair, just, ethical, equitable society. Doesn’t seem much of a dilemma to me to be honest. The normative value of living in a fair, just, ethical society seems a big issue to me. Some unknown person or people, ethically deserving or not, needing it or not, being materially better off, isn't really in the same league. But some may think differently, of course.

One suspects some confusion may occur here involving evaluating normative tradeoffs in the unreal, arbitrary, attenuated conditions of the Fairy Land, where a variety of ethical issues, including distributional ethics, are held in abeyance, and in the real world. In the Fairy Land, the resolution of the tradeoff becomes a bit of a non-issue as well, but in the other direction. If distributional ethics, fairness, justness, etc. are meant to not exist, what values are we trading off against the value we attach to total output and production efficiency? It’s why the use of arbitrary, unreal models with false factual premises creates so much more confusion in normative economics than the superficially similar use of arbitrary, unreal models with false simplifying assumptions creates in positive economics. Are we talking about ethics for reality or the Fairy Land? Normative tradeoffs in reality or the Fairy Land? All ethical issues relevant to reality or just one or a few? Real people or theoretical ciphers? Serious ethical philosophy or a funny little side show?

A final wrinkle relates to the issue of actors and roles. Thus far, I’ve been talking about normative tradeoffs in the context of a particular person weighing the values involved. However, the economist / observer versus subject distinction allows a different interpretation. If one adopts the perspective of an observer looking at subjects supporting different positive outcomes, one may suppose the relevant “tradeoff” is not the conceptual dispute between ethical propositions, per se, but a tradeoff involving the two groups of subjects. One may discuss a positive tradeoff involving the numbers of subjects satisfied with one or the other resolution, or a sort of second order normative tradeoff for the observer involving weighing the normative values leading him or her to support one group or the other. The latter normative issue may or may not equate to the observer simply thinking through the conceptual tradeoffs on his or her own. There are two levels of ethical philosophizing going on in that situation, don’t get them twisted.

Economists are funny sometimes. They’re always quite eager to give others life lessons about tradeoffs, but one is never entirely sure they actually understand the tradeoffs they’re meant to be explaining. Gets a bit murky sometimes. Case in point, there is no “(economic) efficiency versus equity” tradeoff, and the “(production) efficiency versus equity” tradeoff is either a rather badly described potential positive tradeoff or a badly described nod to a rather opaque ethical issue. It’s the kind of thing that happens when one casually mixes positive and normative, science and philosophy. One might just make a hash out of both, leading to intellectual monstrosities like anti-democracy bad economics in the conservative style. Maybe do one thing at a time?

Indifference and Ignoring

Let’s look this week at the difference between ignoring some issues and being indifferent to some issues in the context of neoclassical welfare economics and fake distributional indifference in bad economics in the conservative style.

Say we have status quo A and alternative B that differ with respect to the resolution of some interpersonal conflict of preferences. We should be indifferent to A and B under the limited, ethical-half theory of neoclassical welfare economics based on a certain sort of “utility.” “Utility,” when defined in either of the two ways consistent with neoclassical welfare economics, cannot be used to resolve interpersonal conflicts of preferences. The resolution of such conflicts depends on ethics exogenous to that theory. That’s the correct version or interpretation, which renders neoclassical welfare economics relatively ethically uncontroversial by avoiding the lion’s share of ethics, which involve the issue of how to resolve interpersonal conflicts of preferences (needs, wants, desires, etc.).

If one instead interprets neoclassical welfare economics as suggesting one should “ignore” the differences between A and B, rather than acknowledge them and express indifference to them, one might suppose economists are meant to support A, the status quo policy option. For example, some people support status quo A and others support alternative B on some exogenous ethical grounds, economists are meant to “ignore” the controversy over A, ignore those who support B, and thus directly or indirectly, explicitly or implicitly, support A. That’s the incorrect version or interpretation, which conflates indifference with ignoring and transforms neoclassical welfare economics into a potentially contentious, controversial ethical or normative theory that supports the status quo.

It’s superficially plausible, it works rhetorically, because neoclassical welfare economics does indeed imply economists qua economists may ignore the substance of exogenous ethical arguments not based in “utility” as outside the scope of that theory. However, neoclassical welfare economics does not imply economists qua economists may ignore the fact outcomes differ with respect to “utility,” or ignore the consequent indifference or neutrality that should logically ensue under the normative argument in that theory.

The same general error lies behind the false yet commonly promoted “efficiency versus equity tradeoff” we get if A happens to be “economically efficient” (defined with respect to “utility”) and B is not. I discuss it often enough, but let’s discuss it again here. The normative argument in neoclassical welfare economics is based on “utility.” The only reason we care about “economic efficiency,” defined with respect to “utility,” is what it says about “utility.” It doesn’t have its own independent normative significance apart of “utility.” If we can’t rank outcomes on the basis of “utility,” it’s theoretically incorrect to say neoclassical welfare economic theory still allows us to rank them by whether they’re “economically efficient” or not. It works rhetorically because one can easily lose track of the distinctive, confusing, relative quality of “utility” in neoclassical welfare economics that generates distribution indifference and just suppose instead it’s all “utility,” so “economically efficient” outcomes must always rank higher in some way. If one is confused on this point, one may suppose neoclassical welfare economics ranks A superior to B, because A is “economically efficient” and B is not, and proposes a tradeoff in terms of lost “efficiency” if moving from A to B to accommodate exogenous ethics. That’s fake distribution indifference. It gives the wrong answer. It is theoretically incorrect. The normative argument in neoclassical welfare economics does not rank A normatively superior to B under the conditions specified. It expresses indifference between A and B. As an aside, one may sensibly propose a tradeoff between “production efficiency” defined with respect to output and “equity,” but the idea only total output matters is a form of distributional ethics, and the argument in neoclassical welfare economics concerns maximizing “utility” not output. So that particular tradeoff doesn’t really make sense if “equity” just means distributional ethics, and it’s not a theoretical result from neoclassical welfare economics but an argument from macroeconomics involving the effect on output of changing patterns of economic power.

The same general sort of error relates to the fake “anarchism” one commonly sees in which existing laws relating to the definition, distribution, and use of economic power in markets to resolve interpersonal conflicts of preferences (the ethical issue of the extent of the market) are equated with having no laws, no coercion, no government, no expression of ethics on resolving interpersonal conflicts. Again, the argument involves “ignoring” the exogenous ethics about resolving interpersonal conflicts of preferences and thus, following bad economics in the conservative style, may incorrectly be thought consistent with, or even implied by, neoclassical welfare economics. However, by ignoring the differences in “utility” between A and B, ignoring true distributional indifference, that argument is actually inconsistent with the limited normative content of neoclassical welfare economics, which proposes differences in “utility” normatively significant in the sense of generating indifference.

Also, the argument really only ignores exogenous ethics about resolving interpersonal conflicts of preferences in favor of a typically implicit more general form of exogenous ethics suggesting there’s something normatively significant about the status quo, A. The argument doesn’t really work as advertised, doesn’t really get one anywhere in a philosophical sense, because supporting the status quo because it’s the status quo is just as much a form of exogenous ethics as the sort that supports A or B on more substantive grounds. Why is that error not immediately identifiable as such? I suppose because ignoring some exogenous ethical issues and going with whatever status quo mechanism we have to resolve interpersonal conflicts of preferences conveniently comports with the exogenous ethics of some. 

The argument there’s really nothing ethically justified about any mechanism for resolving interpersonal conflicts of preferences, including the status quo one, leads to the dead end of real anarchism. It fixes the fakery of fake anarchism, but becomes ethically implausible. Again, it seems safe to say most people prefer to live in an ethical society, not under the law of the jungle. They will have ideas relating to how society should resolve interpersonal conflicts of preferences that don’t involve violence and brute force. I know I do. Do you?

Fake distributional indifference can take many forms but its false, misleading, confusing, rhetorical nature leads always away from real neoclassical welfare economics toward misleading, anti-democracy bad economics in the conservative style. We should fix bad economics in the conservative style.

Fake Distributional Indifference and Market Distortions

It’s been a while since I talked about fake distributional indifference involving restricting policy choices to those that ostensibly do not “distort” or “interfere” with markets. Let’s do that bit of bad economics in the conservative style this week.

Say A is the status quo. B is some change to which one would be indifferent relative to A on the basis of “utility” in neoclassical welfare economics. C is some change one would prefer to B, but to which one would be indifferent relative to A, on the basis of “utility.” For example, A might be sell a vaccine on the open market to those with the economic power to get it, B might be allocate the vaccine to sick people first using some non-market mechanism, C might be transfer enough economic power to sick people to ensure they can get the vaccine first if they choose. We’re talking about an interpersonal conflict of preferences relating to the allocation of a scare resource, here a vaccine, and the exogenous (to neoclassical welfare economics, to “utility”) ethical decision how that conflict should be resolved.

The example fits the bill because if sick people are ensured enough economic power to obtain the vaccine on the market, then the ethical view that medical need should inform allocation of the vaccine can be accommodated without “distorting” or “interfering” with vaccine markets. The quotation marks are there because using terms like "distort" and "interfere" when discussing policies or mechanisms governing the resolution of interpersonal conflicts, such as economic power in markets, is itself indicative of fake distributional indifference and bad economics in the conservative style, a point I’m attempting to establish in this post.

Let’s discuss fake distributional indifference taking the form of swapping out indifference between A and B for preferring A to B ostensibly because indifference holds between A and C, and C is preferred to B, so B is irrelevant in some sense to the real, underlying choice. It's logically incorrect, of course. If one prefers A to B, one cannot also be indifferent between A and B. The interesting question is how does the rhetoric work? Why does it seem so convincing and lead so many people to bad economics in the conservative style? How might one get the impression preferring A to B does not add normative or ethical propositions that go beyond the “utility” that generates indifference between A and B, that are exogenous to neoclassical welfare economics?

I would suggest this issue involves the relationship between B and C. Not identity; C is preferred to B. But something involving equal availability, feasibility, cost, etc. A factual premise that wherever one might implement B one might just as easily implement C. In the Fairy Land of Economic Theory, this may make perfect sense. The stroke of a pen, a few taps on one’s keyboard, and one can implement C as easily as B, so it may be incomprehensible one would ever talk about B rather than C, a sort of error, having no real significance. In that case, switching out indifference between A and B for preferring A to B, but then being indifferent between A and C, may appear an inconsequential and benign departure from formal logic. Hardly what one might call rigorous thinking, but maybe fine casually, informally.

But let’s consider what’s going on when neoclassical welfare economics is applied in the real world as opposed to theoretical situations, where implementing any policy, A, B, or C, may involve practical issues, costs, the normative views of people other than one’s fellow economists. Is it just as easy, available, feasible, costly, acceptable to voters, to transfer economic power to sick people to ensure they can get a vaccine first on the market if they choose (C) as some other mechanism (B)? Or is that a false factual premise in the real world?

I would suggest it’s a false factual premise. Take cost, for example. Identifying sick people is relevant in either case, but is then transferring the relevant economic power to the relevant people equally as costly, technically feasible as other allocation systems? If costs higher, is it worth it? How would one determine that on the basis of “utility” alone? Or consider feasibility in terms of voter acceptance. Might voters look at the transferring of economic power to sick people to do with as they like a different ethical issue in some respect from ensuring sick people can get the vaccine first, if they like? One ethical issue seems more about the use of economic power in markets to resolve a particular conflict of preferences, in this case vaccines, while the other ethical issue seems more about the distribution of economic power more generally. One is about resources devoted to vaccines, specifically, and the idea sick people should have priority regardless of their economic power. One is about increasing the “utility” of possibly already quite economically powerful sick people. Those are not identical ethical issues. Some economists may suppose they should address the policy option suggested on the basis of “utility,” blithely ignoring the differences in “utility” involved in the two options that should render them indifferent. That’s obviously incorrect. However it’s also beside the point because the issue in this instance is not about economists but voters, the political feasibility of policy options in the real world as opposed to the Fairy Land of Economic Theory. On the point of political feasibility, does it matter why one policy may be politically feasible and another not? What if voters are simply confused, ignorant, irrational, whatever, in such a way B is a politically feasibly policy option but C is not?

If there are differences in ease, availability, practicality, costs, voter acceptance, then insisting those who support B express their values via C instead becomes rather more clearly incompatible with indifference between A and B than in the Fairy Land, surely. Recall the ostensible reason we have distributional indifference is because we’re meant to avoid controversy by holding certain ethical issues exogenous. Supporting A over B by making things difficult for those who prefer B to A on exogenous ethical grounds, when one is meant to be indifferent, is inconsistent with that objective.

Hoops are bad enough, but in some cases, when the issue is presented as restricting policies to those that do not “distort” or “interfere” with markets generally, the issue can be complicated by the role of economic power as an incentive in labor and capital markets. If we implement a tax and transfer policy to get sick people the economic power they need to get the vaccine on the market if they prefer (C), have we “distorted” or “interfered” with any markets? How about labor or capital markets, through incentive effects? One may reasonably wonder, are we just setting up unattainable conditions? Playing funny word games? Giving people the old run around? Telling people who prefer B to A that’s fine, as long as they find the mythical chimera and shake its mighty paw? I’m not just cracking wise. I’ve heard people say things like that. They’d like to be truly indifferent, they just can’t really see how one might possibly change the status quo in the one correct way, jump through the hoops, evade the obstacles, fulfill the exacting conditions.

The icing on the cake is that one can very easily advocate for C as an ostensibly superior option to B without misleadingly and incorrectly preferring A to B, without B blocking, so to speak. One can use neoclassical welfare economics for good rather than bad.

Fake distributional indifference isn’t real distributional indifference. If you’re doing economics with fake distributional indifference, you’re not doing real neoclassical welfare economics, you’re doing bad economics in the conservative style. Did you know? Annoyed? Disappointed? Let me say once again it’s all good as long as one isn’t playing games with neoclassical welfare economics, if one identifies, explains, discusses the added normative propositions so people can evaluate them, think about the controversy involved, vote on them, etc. One needn’t restrict oneself to neoclassical welfare economics. One can do explicit conservative economics with added normative propositions. It’s the misleading, confusing, underhanded nature of bad economics in the conservative style that makes it “bad” for my purposes.

Addendum. To state what is hopefully the obvious, A (and C) preserve the market mechanism for vaccines while B “distorts” or “interferes with” that mechanism. Real indifference between A and B implies indifference to distorting or interfering with that market. Neoclassical welfare economics does not support the fetishization of markets. That’s a characteristic of bad economics in the conservative style, unless the additional normative propositions are made explicit, in which case it’s just some form of conservative economics.