I was trying to think of innovative ways to portray or explain in a non-economics context the partial nature of the ethical half-theory of neoclassical welfare economics, and I think I might have one. Want to hear? Fine, I’ll tell it.
What makes neoclassical welfare economics an ethical half-theory in realistic contexts is that while it clearly has some normative or ethical content, the resolving of interpersonal conflicts, a significant part of ethics, is meant to be exogenous to that theory. That’s because the normative content of modern neoclassical welfare economics is (ostensibly) limited to the preference rankings of individuals, rather misleading called “utility,” but a type that is undefined (or in older formulations, inaccessible) in interpersonal contexts. Imagine now a more general ethical theory, say called “neoclassical welfare ethics,” that has that same feature. Let’s think about what it says, how it relates to reality, and how it might be misinterpreted in a realistic context, used for rhetorical effect.
Let’s take it out of the world of economics and the ethics of economic power. Say one is a guard in a Nazi murder camp thinking about normative issues like what one ought to do, or advise others to do, about another guard, who is about to follow orders and kill an inmate. Say the guard’s preference rank from lowest to highest is not kill inmate, kill inmate. The inmate’s preference rank from lowest to highest is be killed, not be killed. They may have other preferences as well, about ethics say, but let’s just concentrate on those for now. If one does nothing, or fails to advise others to do anything, such as question the orders, ask for a second opinion, intervene, hatch a plot, whatever, then things will go down on schedule and the guard will follow orders and kill the inmate.
What does our theory say? Well, first there’s no way to compare the “utility” of inmate to guard because interpersonal comparisons are undefined (or impossible), so one will be ethically indifferent on that issue. Second, the current situation is Pareto “optimal” or “efficient.” A situation is Pareto “optimal” or Pareto (or “economically,” sorry) “efficient,” if one cannot increase one person’s “utility,” that is, move up his or her preference rank, without decreasing another person’s “utility,” that is, move down his or her preference rank. That bit is easy peasy. But now for the difficult part. How does our neoclassical welfare ethics relate to ethics relevant to the real world, to real people, to oneself, to others? How should one explain to others what the theory implies in reality?
Well, one thing one can rely upon is the theory is correct in a logical sense. Also, the ethical proposition everything else equal, all questions of interpersonal ethics solved or irrelevant, it’s nice if people move up their preference ranks, seems plausible in certain cases. It’s obviously more plausible if one is contemplating people who are thinking correctly, know what they’re doing, are not addicted, under duress, deceived, manipulated, etc. But let’s not worry about that sort of thing here and focus our attention on interpersonal conflict. One may wonder already at the level of broaching (Pareto) “efficiency” if the theory is truly only about the preference ranks of individuals, because those provide no basis for opinions or concerns relating to interpersonal trade-offs. However, that depends what one does with it. Used as a decision rule, the concept conveys additional normative content implying one should stop when such trade-offs threaten to occur, so some built-in bias or preference for the status quo, despite ostensibly being indifferent to such trade-offs. True indifference would imply, well, indifference. Possibly tossing a coin, sometimes making the interpersonal trade-off, sometimes not? Certainly at least not offering any commentary or pushback if anyone else chooses to make an interpersonal tradeoff or not. The results of fake indifference, in the form of professing indifference but promoting the status quo solution, are indistinguishable from supporting the status quo solution for any explicit reason, and one supposes that the main reason one might be tempted to use it. The rhetorical advantage of fake indifference in this situation is one might use it to support the status quo solution, by not intervening or suggesting anyone else intervene, without bringing up any potentially controversial ethical rationale for doing so.
More generally, after explaining the theory’s normative indifference to the fate or welfare of the inmate, and possibly continuing on to discuss the (Pareto) “optimality” or “efficiency” of the status quo outcome, does one have any other responsibilities to oneself or others? Well, one thing that seems pretty apparent is confusion and conflict may result if one simply goes about explaining what neoclassical welfare ethics has to say about the situation without caveat because some may suppose you propose it as a guide to action. That is to say, some might suppose one is suggesting others should adopt also in reality the normative propositions applicable in that theory, that they should treat it as a full ethical theory: they should be indifferent or perhaps support the status quo by doing nothing. One might want to call using the theory in that inappropriate way “bad neoclassical ethics in the conservative style” or something like that, just to let people know one supposes there is some problem in the application, if not the internal logic of the theory itself. It’s confusing because usually when people talk about an ethical or normative theory, they have in mind a full ethical theory that purports to explain what is normatively or ethically correct in reality. They don’t have in mind an odd, random, idiosyncratic partial ethical theory. “If one considers only the welfare of my left big toe, the normatively or ethically optimal social outcome is to devote all resources to slipper construction,” is just a quite uncommon form of ethical discourse. One might want to stress, “Just about my toe. You get that, right?”
So to be intellectually responsible, one should really probably stress the partial aspect of the theory, that it's only about the preference ranks of individuals, it's not at all about interpersonal ethics, which some may reasonably suppose significant in that context. Indeed, one might suppose the interpersonal ethics of the situation is what most, including the ethicist, interlocutors, guards, even inmates would find the most significant element of the situation, and the issue of intrapersonal preference ranks a secondary consideration. Yet it’s also true if one hypothetically removes those more significant ethical considerations, one may be left with only the formerly insignificant, relatively trivial issue of individual preference ranks and the resulting ethical indifference implied by looking only at that.
One may, of course, “weight” the preference ranks of individuals using “social welfare functions” as a way to address the exogenous interpersonal ethics, leading to a distinct “general welfare ethics,” but that seems a rather confusing, inapt, way to discuss the relevant ethics. Also, weighting the preference ranks of individuals and using them in interpersonal contexts is inconsistent with those individual preference ranks as “utility” being undefined in interpersonal contexts. But maybe with the older formulation where “utility” still defined there?
So that’s basically what’s going on with the ethical half-theory of neoclassical welfare economics. A great todo is made of the ranks of certain preferences for individuals, of indifference within that theory to interpersonal conflict, but also pointing to fake indifference. And bad economics in the conservative style takes the limited yet misleading ethical content in the theory of neoclassical welfare economics and runs with it, misstating its relationship to the real world, real people, real ethics, for manipulative rhetorical effect.
