Don’t Say Utility Challenge

Have I thrown down the “Don’t Say Utility Challenge” recently? Because I really think that’s one thing that might help some understand the tricky wordplay in neoclassical welfare economics and hence also anti-democracy bad economics in the conservative style.

If you follow my writing at all, you’ll know I propose there is one reason and one reason only economists refer to individual preference ranks using the term “utility,” and that is to mislead and confuse people by engaging in a game of terminological equivocation for rhetorical purposes. I propose anyone teaching, reading, discussing modern neoclassical welfare economics replace the word “utility” with the phrase “preference rank of individual X” or the equivalent. They’re meant to be identical concepts in modern formulations of neoclassical welfare economics. 

To follow my post this week, one must reject the insincere rhetorical jape one hears from bad economists that “utility” in neoclassical economics is undefined, can mean many things or whatever one likes. Yes, in philosophy many proposed definitions. In economics, only a couple of definitions work. I’m talking here about so-called “preference rank utility” in which “utility” refers only to an individual’s preference ranking, which is the conventional modern interpretation. There is an older version, “perceptions of satisfaction from preference fulfillment” I’ll mention in a bit.

The main point of interest about “preference rank utility” is that it cannot be meaningfully used in interpersonal contexts because there is no shared individual preference ranking, no shared “utility.” It doesn’t make sense to ask questions like, “Who gets more utility from good G, person 1 or 2?” Or “What is the total utility across person 1 and 2 for good G?” Nor does it make sense to talk about attaching “weights” to one person’s preference ranking, then adding it to another’s. One could make that obvious enough if one stopped using the term “utility,” which in many common interpretations in ethical philosophy may be used in interpersonal contexts, and just used the equivalent statement “preference rank of individual X” or the equivalent. What is the term “utility” meant to be adding beyond a hook on which to hang terminological equivocation and create confusion? An individual preference rank is not of use for some other end in the way goods and services were once meant to be of use or have utility in producing happiness.

Now let’s take up the other, older definition that also works, because I know where some minds are likely going, in the rhetorical circles one associates with bad economics. Say we don’t equate “utility” with individual preference ranks, merely such ranks are the only indicator of something else? Something else? Like what? Happiness? How about the most general formulation of inner, inaccessible states of satisfaction from preference fulfillment to avoid the implication preference ranking must be based on hedonistic happiness but can remain general, not disputable, as theory requires? Fine. Then go ahead and say “utility.” One can see in that case there may be some point in using the term beyond rhetorical chicanery. But as Detective Colombo might remark, I have just a few questions in that case.

One might raise positive issues of course, but let’s cut to the chase and talk about the normative proposition we should maximize “utility.” So one person has a lot more inner sensations of satisfaction than others. Whatever that person wants, that person gets, never mind others. Is that it? And here I must give credit to one of my old economics professors who, obviously using this older definition of “utility,” tried to impress upon a class of listless undergrads how important it was we can’t measure utility, how horrible it would be if we could really maximize social utility. Who would seriously support such an ethical proposition? As far as ethical utilitarianism, it must be the most laughably weak and implausible version around. No one would seriously consider it ethically important or even ethical to implement such a proposition.

Cue the conservative rhetorician chorus, “But that’s the whole point, no one could ever implement it.” So pretend to support a totally implausible ethical proposition because one believes no one could ever implement it? Does it sound sincere to you? Or does it sound misleading rhetoric? Does it sound like they may be just trying to eliminate discussion of more serious ethical utilitarianism in interpersonal contexts in order to set the stage to introduce their own interpersonal ethics? Or to oppose interpersonal ethics, in general? How about if they then proceed to offer normative advice relating to economic policies, objectives, goals that have interpersonal implications? I’m just saying. You’re sure you want to commit to that definition? Not waffle back and forth, equivocate?

My challenge to academic economists: If you mean individual preference ranks only, stop saying “utility.” If you mean inner perceptions of satisfaction, stop claiming you’re doing “individual preference rank utility” and explain why you think that definition of “utility” is ethically plausible. I mean, explain in a rigorous philosophical sense, including the awkward bits. And please not just with the risible line, “I don’t support it, and nor will I defend it; I’m just working out the implications in case anyone else supports it for whatever old reason.” That’s not how it’s used.

If you’re a student, ask for a definition, clarification if you detect linguistic anomalies such as individual preference rank utility discussed in interpersonal contexts or inner state utility discussed as individual preference rank utility. If using the latter, think about the ethics.

Social Welfare Functions, Again

I know I discussed it relatively recently, but I feel I should say a few more words more about the rhetoric of so-called “social welfare functions,” mostly because so many dismiss the baleful effects of bad economics in the conservative style by waving their hands at it. It’s meant to be a way to introduce interpersonal ethics, equity issues, into neoclassical welfare economics, to make it a full ethical theory rather than an ethical half-theory. In reality, it’s a rather daft, misleading bit of bad ethical philosophy, rhetoric, mostly about deflecting criticism.

If you recall my previous discussion of the odd way the term “utility” is used in neoclassical economics, you may recall the dominant modern interpretation is that it has no content beyond indicating preference ranks for a given individual. There’s nothing “behind” it, only the fact of the ranking. This interpretation is often called “preference rank utility,” although what the word utility is meant to add to that formulation is anyone’s guess and it should simply be “preference rank.” Under that definition, “utility” is undefined in interpersonal contexts. That is to say, it’s grammatical nonsense to talk about how the “utility” of person A compares to that of person B. One has a “utility” defined relative to A, and a “utility” defined relative to B, but there is no “utility” defined relative to both at the same time. Despite this, it’s not uncommon to see economists who profess to be using modern preference rank utility then move on without skipping a beat to adding up “total” utility by using a “social welfare function.” One cannot avoid the implication they simply don’t know what they’re talking about.

If a “social welfare function” is to be sensible, one must use an interpretation of “utility” in which something lies behind individual presence ranks and so exists in interpersonal contexts, as in the older “inaccessible inner perceptions of satisfaction from preference fulfillment” definition. You may recall that older definition, related to utilitarian ethical philosophy in which “utility” typically related to usefulness for an implied end as satisfaction, happiness, well-being, was also formerly used to shut down interpersonal “utility” comparisons to produce an ethical half-theory. The earlier approach to achieving that end was based on interpersonal utility comparisons not being undefined, as under the modern preference rank definition, but being technically and scientifically impossible, there being no way to obtain information on these inner perceptions of satisfaction. Later economists developed a desire to be viewed more as scientists, despite their philosophical and ethical concerns, leading them to want to shed the non-observable “nonsense” of their older definition of “utility” and adopt the new observable preference rank one. In a practical sense both approaches led to the same conclusions because although the “inaccessible inner perceptions of satisfaction from preference fulfillment” was not defined only relative to individuals, individual preference ranks were the only observable information meant to relate to it. 

The funny thing about the “inaccessible inner perceptions of preference satisfaction” utility is that, as ethical philosophy, it’s complete garbage, in the sense few would likely agree with it if they could actually implement it. Say one had a dream where one could access these postulated inner perceptions and one found they were greatest with someone, oh heck let’s say Adolph Hitler, whose perceptions were so much stronger they dwarfed all others. So the ethical thing to do would be to let Mr. Hitler victimize everyone? Would anyone seriously accept maximizing that type of “utility” as sound ethical philosophy if they could implement it? Unlikely. As I like to say, it’s an ethical theory whose utter implausibility is masked by it utter impossibility. It’s not a real ethical proposition but a rhetorical maneuver. However, if one starts with “utility” defined in that way, and has no actual idea the size or intensity of the relevant inner perceptions, one might want to “weight” them according to some formula in order to add them up and get a total “utility” or inner perception across people.

It’s garbage. Bad philosophy. One claimed implausibly to want to maximize a peculiar sort of “utility,” then one basically ignored it and introduced unrelated ethical thinking (ironically possibly involving other takes on utility), and made up conclusions having nothing really to do with it.

It introduces the ethical stylings of philosophically clueless economists, the ones making these social welfare functions, based on who knows what ethical thinking, and sets economists up as ethical arbiters. Why? What does your average economist know about ethical philosophy? 

It does nothing to address the problems introduced by bad economics in the conservative style, as that rhetoric remains untouched. The ethical rationale for interpersonal ethics and equity issues remains external to neoclassical welfare economics, which remains an ethical half-theory.

The odd formulation supports rhetorical arguments in some forms of bad economics in the conservative style in which interpersonal ethics, equity issues, are viewed as irrational, unjustified, arbitrary, mere “virtue signaling,” nothing that should be taken seriously in economic evaluation.

If one is serious about addressing the dodgy normative rhetoric of anti-democracy bad economics in the conservative style, one won’t be distracted by the essentially mathematical issue of economists potentially using “social welfare functions” to rank perfectly competitive market outcomes.