So What Shape is God’s Social Welfare Function?

December 14, 2004 | 34 comments
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It’s time for the post that I am sure you have all been waiting for on that perrenial hot-button issue of the Mormon intelligensia: the relationship of the Gospel to welfare economics.

Generally speaking economists are interested in explaining and predicting human behavior. Their basic tool is the rational actor model. Contrary to popular belief among humanities majors and other econ-loathing types, the rational actor model does not mean that people are inherently greedy or that “Greed is good.� Rather, it rests a couple of simple ideas. First, that people have coherent preferences. What this means is that one forced to choose between different states of the world – say one in which you eat oranges with your yogurt, one in which you eat apples, and one in which you eat pears – one will be able to rank one’s preferences – pears, oranges, apples – and that ranking will be transitive – If I prefer pears to oranges and oranges to apples, then I prefer pears to apples. A final assumption about preferences is that they are complete. Given any two states of the world, everyone will either prefer A to B, B to A, or be indifferent between them. The second key idea in the rational actor model is that people will act so as to satisfy their preferences. Thus, all other things being equal, if you prefer apples to oranges, you will eat apples rather than oranges when faced with a choice between them. This is it, folks. That is the rational actor model stripped to its bare essentials.

In order to make the math easier in modeling human behavior based on the rational actor model, economist tend to adopt the assumption that people are maximizing some reified something that the economists call utility. This does not mean that the economists are utilitarians, and all of the philosophers and English majors that are getting all set to do battle against Jeremy Bentham and the heartlessness of 19th century classical liberalism need to take a couple of deep breaths, think of a happy place, and calm down. Utility is a mathematical expression of two basic assumptions of the rational actor model.

Welfare economics is the branch of economic thinking that deals with two interrelated issues. The first issue is how we gauge the well-being of people. The second issue is how we evaluate desirability of differing states of the world based on our assessments of their impact on human well being. At this point, I think that most economists and more annoyingly most libertarians who have had a basic econ class fall into the trap of equating utility with well being. Maximize utility and all is well!

There are some problems with this. The first is that has to do with what is called the social welfare function. Utility is a postulate of the rational actor model. The idea that we can judge states of the world based on whether or not they maximize utility, however, is not a postulate of the rational actor model but of our social welfare function. Implicit in the maximization argument is the assumption that the over-all desirability of some state of affairs x is defined by the sum of the individual utility functions (which remember are simply a mathematical description of individuals’ preferences) of all members of the society. Mathematically, this looks like this:

S(x)=I1(x) + I2(x) + I3(x) + . . . + In(x)

Where S is the social welfare function, In is the individual utility function of person n, there are n people in the society, and we are judging the state of affairs x in the world. At this point, S(x) ought to look pretty arbitrary. After all, why shouldn’t I have a social welfare function that looks like this:

S(x)=2 * (I1(x) + I2(x) + . . . + Ic(x)) + (I(n-c)(x) + I(n-c+1)(x) + . . . In(x))

Where individuals 1 through c represent one class in society and individuals n-c through n represent a second class. Perhaps the first class consists of the poor or the virtuous or members of some favored racial group, etc. etc. The issue of how we shape the social welfare function simply expresses in mathematical terms the simple fact that we need some theory other than the rational actor model in order to judge between states of the world. This does not mean, of course, that mucking around with social welfare functions is utterly vacuous. For example, Kaplow and Shavell, two economists at the Harvard Law School, claim to have demonstrated that given very weak assumptions about the nature of society logically speaking there is no social welfare function such that choosing a state of affairs that does not result in utility maximization does not also lead to lower levels of social welfare, regardless of how one specifies the social welfare function. My understanding is that this claim is quite controversial, although I don’t pretend to understand the math.

There is a deeper problem, however, than the shape of the social welfare function. That is the nature of utility itself. Remember that utility is simply a description of preference satisfaction. The problem, of course, is that it is not clear that satisfying our preferences is desirable. There are two arguments against the idea that preference satisfaction is important: A good argument and a not so good argument.

The not so good argument is presented by the problem of so-called utility monsters. Jeffery Dahmer clearly had a preference for murdering and eating people. Many rapists have a preference for raping people. Suppose that we maximize aggregate welfare. This would suggest that the world ought to be organized so that Dahmer and the rapist should be able to satisfy their preferences so long as they get more utility than do their victims. Reductio ad absurdum. This is not such a good argument for two reasons. First, it requires that we assume that utility (which remember is nothing more than a mathematical expression of the rational actor model) is interpersonally comparable. This is doubtful. Second, the reductio probably rests on implausible empirical assumptions about how much people actually value not being raped or murdered and eaten. To see what I mean, imagine a thought experiment in which everyone in the world was given precisely the same amount of money. As an empirical matter, do you think that Jeffery Dahmer could find very many people willing to be paid to be murdered and eaten?

The deeper problem with utility is that it is not at all clear that getting what we want matters. It does not necessarily make us happy. It does not secure to us things that are of greatest worth. This, it seems, leaves us with a couple of options. First, we could argue that what matters is happiness, but that this is defined in terms of a particular psychological state rather than in terms of the satisfaction of preferences. Note, this is not an argument against the rational actor model, which may continue to be a valid way of describing and modeling human behavior. It only suggests that in judging states of the world we ought to defer to psychologists, assuming of course that they can identify the subjective state of happiness. One needn’t suppose that we are left here with nothing more than simple hedonism. Perhaps the true joy that the Gospel brings, the kind of happiness that really matters is qualitatively different from the “happiness� of the faithless libertine.

The second option is that true happiness is not a psychological state but an objective condition. Consider the claim that “sinfulness never was happiness.� If sin is an objective concept, then happiness, it would seem, has some objective component. This gets really tricky, however, because it is not at all clear what this means. By objective I am suggesting something like a metaphysical condition. Perhaps sin is some sort of metaphysical, spirit sludge that inheres in the soul, a kind of inversion of Pratt’s famous spirit fluid. More plausibly, sin and happiness may consist of some sort of objective relationship to God.

Both of these options, however, leave open the most difficult question. What is the shape of God’s social welfare function? Assuming that we understand the individual welfare functions that God deals with – psychological perhaps, objective perhaps, almost certainly not classical economic utility functions – we still do not know how God aggregates them. Perhaps God, as no respecter of persons, counts everyone’s welfare function completely equally. Perhaps, as a lover of the poor, he counts the welfare functions of the poor double. It is hard to say.

Of course, there is a final economist’s dream. Suppose that we could nail down God’s social welfare function, including whatever individual welfare functions he uses. Could we then come up with an expression of this welfare function in terms of individual utility functions? If so, then we could, indeed, use the rational actor model to construct Zion!

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34 Responses to So What Shape is God’s Social Welfare Function?

  1. Times and Seasons » Secular knowledge on December 16, 2004 at 5:20 pm

    [...] ime trying to understand quarks and taking pictures of other planets? Or, for that matter, theorizing about economics or history or art? Sure, we have all of those quotes in the Teachin [...]

  2. Frank McIntyre on December 14, 2004 at 1:21 pm

    Nate,

    As soon as I saw the post title I figured you’d be lucky to break 5 comments!

    Anyway, a good discussion of a cool topic. As long as it is too long anyway, you may want to add in the notion of budget constraints. By which I mean, what constraints are there on the actions taken by God? He gives us agency. Is this a constraint or merely a recognition that agency makes us happy? I don’t think it is a constraint because it is the nature of our utility that we are better off where we choose to be than where someone chooses for us, thus we get scriptures about every man receiving according to their desire. But if God is unconstrained, then is this not the best of all possible worlds for the people available? If not, why didn’t God change it to be the best of all possible worlds? Which is to ask once again, what are the constraints on God’s maximization? I think the real constraints lie in te nature of our preferences, such that this is the bext available, given the set of people here on Earth. The atonement mitigates the long-term damage of all our nasty preferences, should we choose to repent, but in the short term mortality can be a rough slog, because we are victims of our own choice and that of others.

    God could take away that choice, but we’d be worse off in the long run.

    On the other hand, is it the case that God could have done something about our environment so that more people would be exalted than will be? I find that hard to believe, which is why I tend to doubt the long term importance of those beyond the Godhead on our eternal salvation.

  3. Marko on December 14, 2004 at 1:22 pm

    “The deeper problem with utility is that it is not at all clear that getting what we want matters. It does not necessarily make us happy. It does not secure to us things that are of greatest worth.”

    Nate — Is this a behavioral economics-type criticism of traditional economic modeling or are you making a different claim? It seems as though you are arguing outside your initial premises, else you have to tackle the question about why happiness or ‘things that are of greatest worth’ are not reflected in the preferences of the individual or turn the idea of a welfare function on its head.

    My initial conclusion on reading your post is to wonder whether God’s social welfare function is not simply defined by the aggregate absolute preferences of all individuals, but that individuals preferences are largely unknown by individuals because of lack of information. Not a very helpful response.

  4. Frank McIntyre on December 14, 2004 at 1:26 pm

    Marko,

    It is in the aggregation of preferences that the trouble starts. That is where you get Arrow’s Impossibility Theorem and questions about how to compare across people.

    Also, it is fine to say that preferences are unknown by individuals, but now you have a person who is going to do something different than what they “prefer”. Nate’s approach is to reserve the word “prefer” for those actions one takes and let the “unkown preferences” you refer to be called something else, like happiness.

  5. Nate Oman on December 14, 2004 at 1:49 pm

    Marko: My point is that “utility” in microeconomic theory is not the same thing as “utility” in moral theory. Utility in economics is a postulate of a particular way of modeling human behavior, namely the rational actor model. Hence, saying that people “maximize utility” is not to say that people maximize that which gives them happiness, results in their well being, etc. Rather, “utility maximization” is a way of mathematically describing someone’s behavior by assuming that their choices (that is what they actually do) can be described in terms of a function between different variables and that the maximization of this function, given the contraints of the world, will describe their behavior. The idea that utility maximization will allow us to predict behavior rests on the coherence of the rational actor model (ie (1) preferences are complete, ordinal, and transitive; and, (2) people will, ceterus paribus, satisfy their preferences).

    The behavioral critique of economics is an attack on the rational actor model. As I understand it, it takes two forms. First, it denies that preferences are in fact complete or transitive. There are some fun labratory games that suggest that preferences are not transitive, for example. Second, it denies that people actually act to satisfy their preferences. The first challenge, it seems to me, is potentially very important. The second challenge, it seems to me, is less important because it seems to rest on the erroneous assumption that the word “preference” in the rational actor model refers to subjective desires or reported goals rather than actual behavior. Once one ignores reported preferences and looks instead to expressed preferences much of this difficulty evaporates. Finally, economists frequently couple with the rational actor model assumptions about the information processing ability of agents, e.g. that they perfectly assess risk, discount future values consistently, have perfect information, etc. Much behavioral research is aimed at attacking these assumptions, however, I do not see them as being central to the rational actor model and generally speaking they simply result in refinements in policy analysis rather than a rejection of the rational actor model per se. (This, I take it, describes for example the work of Cass Sunstien).

    My point is that expressed preferences will not provide us with either good individual welfare functions or a social welfare function. Just because someone does something does not mean that it is good for them to do it! Furthermore, it is by no means obvious that the correct approach to judging social states is to aggregate and maximize individual welfare functions.

    In the end, I think that economic analysis can be tremendously useful for thinking about proper social arrangments. I also think that it is fundamentally incomplete and insufficient. I don’t, however, think that it is insufficient for the reasons that most critics of economic thinking give, ie it exalts human greed, assumes that all goods can be commodified, takes money as the ultimate metric of value, etc.

  6. Nate Oman on December 14, 2004 at 1:55 pm

    Marko: I am too long winded above. Perhaps I could make my point more succinctly thus: (1) I do not think that individual utility functions and welfare functions are the same thing; and, (2) I do not think that either individual welfare functions or individual utility functions tell us how to specify the social welfare function.

  7. Marko on December 14, 2004 at 2:12 pm

    Nate — I think I agree that individual welfare or utility functions don’t dictate how to specify the social welfare function, but for different reasons. I am still hung-up on your distinction between microeconomic utility and moral utility because I’m not sure there is a meaningful distinction. Your psychological/objective distinction both seem to imply an absolute that has little to do with the individual, and this would seem to lead to the conclusion that individual preferences in the sense of moral utility are uniform across all individuals. If that is the case, what does that mean for the social welfare function? If that is not the case, how do we define individual moral utility other than microeconomic utility functions?

  8. Nate Oman on December 14, 2004 at 2:19 pm

    Marko: Suppose that I have a theory of human flourishing based on Aristotle’s ethics. It is clear that most people do not behave as this theory would suggest. The theory, presumably, specifies individual welfare functions. The question is whether or not the fact that people behave differently than is suggested by their welfare function means that the rational actor model is kaput. I would say no. All that the rational actor model requires is that people behave according to SOME set of coherent preferences (even if they are different from the preferences that people explicitly state, even to themselves). My point is that people may behave perfectly “rationally” yet still be very unhappy (subjective notion of welfare) and sinful (objective notion of welfare).

    My Aristotle example might imply that everyone has the same welfare function, but it needn’t necessarily cary this implication. Perhaps people can reach Aristotle’s goals in different ways. This is a question for Aristotle. There is nothing in the concept of welfare functions per se that dictates one answer rather than another.

  9. cooper on December 14, 2004 at 2:25 pm

    All I will add is that I won a side bet on this post. I bet a friend that Frank would be the first to comment, and my prognopstication was correct! yay for me, I owe you lunch sometime Frank! Thanks.

    Good post Nate, but way too heady for me this time of year. I’m still trying to make sure I have all the gifts purchased, wrapped and no one has been forgotten. ;-D

  10. Frank McIntyre on December 14, 2004 at 2:39 pm

    happy to oblige. Especially since I was wrong about the post only getting 5 comments. On the other hand, 3 of them have been me, and one was Nate reiterating himself from his immediately preceding post. So maybe I did better than I thought!

  11. Ebenezer on December 14, 2004 at 2:49 pm

    My knowledge of economics is relatively weak, but your post, and some of Franks comments, did remind me of these passages from Fyodor Dostoyevsky’s “Notes from the Underground” :
    From Chapter VII:

    Man is stupid, you know, phenomenally stupid; or rather he is not at all stupid, but he is so ungrateful that you could not find another like him in all creation. I, for instance, would not be in the least surprised if all of a sudden, à propos of nothing, in the midst of general prosperity a gentleman with ignoble, or rather with a reactionary and ironical, countenance were to arise and, putting his arms akimbo, say to us all: “I say, gentlemen, hadn’t we better kick over the whole show and scatter rationalism to the winds, simply to send these logarithms to the devil, and to enable us to live once more at our own sweet foolish will!” That again would not matter, but what is annoying is that he would be sure to find followers–such is the nature of man. And all that for the most foolish reason, which one would think, was hardly worth mentioning: that is, that man everywhere and at all times, whoever he may be, has preferred to act as he chose and not in the least as his reason and advantage dictated. And one may choose what is contrary to one’s own interests, and sometimes one positively ought (that is my idea). One’s own free unfettered choice, one’s own caprice, however wild it may be, one’s own fancy worked up at times to a frenzy–is that very “most advantageous advantage” which we have overlooked, which comes under no classification and against which all systems and theories are continually being shattered to atoms. And how do these wiseacres know that man wants a normal, a virtuous choice? What has made them conceive that man must want a rationally advantageous choice? What man wants is simply independent choice, whatever that independence may cost and wherever it may lead.

    From Chapter VIII:

    Shower upon him every earthly blessing, drown him in a sea of happiness, so that nothing but bubbles of bliss can be seen on the surface; give him economic prosperity, such that he should have nothing else to do but sleep, eat cakes and busy himself with the continuation of his species, and even then out of sheer ingratitude, sheer spite, man would play you some nasty trick. He would even risk his cakes and would deliberately desire the most fatal rubbish, the most uneconomical absurdity, simply to introduce into all this positive good sense his fatal fantastic element. It is just his fantastic dreams, his vulgar folly that he will desire to retain, simply in order to prove to himself–as though it were necessary–that men still are men and not the keys of a piano, which the laws of nature threaten to control so completely that soon one will be able to desire nothing but by the calendar.

    I believe in it, I answer for it, for the whole work of man really seems to consist in nothing but proving to himself every minute that he is a man and not a piano-key!

    and from Chapter IX:

    Does not man, perhaps, love something besides well-being? Perhaps he is just as fond of suffering? Perhaps suffering is just as great a benefit to him as well-being? Man is sometimes extraordinarily, passionately, in love with suffering, and that is a fact.

  12. danithew on December 14, 2004 at 3:04 pm

    As an empirical matter, do you think that Jeffery Dahmer could find very many people willing to be paid to be murdered and eaten?

    Oddly, sadly and disgustingly, the answer to this question might be yes.

    There is a horrible story (from recent years) where a man in Germany wanted to eat a willing victim and he posted about his desire online. He actually got multiple positive responses and went through with killing and eating parts of a willing victim. I found a link to this story but it was such grotesque reading won’t provide a link to it.

  13. Russell Arben Fox on December 14, 2004 at 3:53 pm

    This post made me giggle.

  14. Nate Oman on December 14, 2004 at 3:57 pm

    The one on the German guy looking for someone to eat, or the one on economics?

  15. danithew on December 14, 2004 at 4:02 pm

    “Utility Monsters” … I’m going to have to remember that line. If someone mentions Dahmer or some other psycho by name I’ll simply say: “he’s a utility monster.”

  16. Davis Bell on December 14, 2004 at 4:05 pm

    I come to T&S to escape studying for my econ final, and what do you know, they’ve gotten to you guys, too. Bastards.

  17. Boris Max on December 14, 2004 at 4:20 pm

    One point of clarification on behalf of the humanities/english types that you so eagerly villify in your post, Nate. Perhaps they are, as you say, “anti-econ” because they feel that economist haven’t properly thanked them for teaching the narrative techniques that inform economics. Your discussion of the rational actor model, e.g., relies on many wonderful stories: people eating fruit, people eating people, people paying people to eat people, etc. I’m tempted to think that bourgeois economics is more interesting than bourgeois novels.

  18. Frank McIntyre on December 14, 2004 at 4:58 pm

    Boris,

    Are you suggesting that modern English professors are to be thanked for the idea of telling good stories to teach a point? Or are you claiming as “English types” anybody that ever used that technique? Since teaching with stories is a standard technique of teaching as far back as I am aware of anybody writing anything, this would seem a little presumptuous. But maybe your point is that English types are presumptuous…

  19. Nate Oman on December 14, 2004 at 5:39 pm

    Boris: I studied political philosophy as an undergrad, and went to law school in large part out of math-phobia. As was hopefully clear from my post, I think that economics has some real problems. My problem is that all too often I see a viceral reaction to economics on the part of those trained in the humanities. For what it is worth, if anything economists are probably worse. They tend to be dogmatic philistines convinced that they and they alone hold the keys to social understanding. Everything that happens in philosophy departments and English departments is only so much fluff.

    In the law you have the option of going either way. Law and economics is a very important and influential way of thinking about the law. One can get on the bandwagon of economic triumphalism and ride it to tenure at many law schools. There are places where you can make a career out of hating economics. Such is the nature of the discipline. My interest is not really in burying or exalting economics, but in thinking about what it does and does not tell us.

  20. Eric James Stone on December 14, 2004 at 6:49 pm

    > The deeper problem with utility is that it is not at all clear that getting what we want matters. It does
    > not necessarily make us happy. It does not secure to us things that are of greatest worth.

    “After a time, you may find that having is not so pleasing a thing as wanting. It is not logical but it is very often true.” — Spock

  21. cooper on December 14, 2004 at 8:39 pm

    And with Eric latest comment two threads merge….

  22. Jonathan Green on December 14, 2004 at 10:43 pm

    Nate, I’m not quite sure what Boris was getting at, but I’m glad it prompted a clarification of your position. Econ-hating humanities majors must exist, but I don’t have much experience with them. Every so often I think I really should have studied economics instead, but I didn’t discover until after I had a BA that economists get to say most of the things worth saying these days.

  23. Nate Oman on December 15, 2004 at 9:07 am

    Jonathan: For what it is worth, I am currently working on two articles (one already accepted for publication, one hopefully to be accepted next spring) that are explicitly devoted to discovering the limits of economic reasoning in the theory of contract law. I suspect that my views here are stongly colored by law school, a place where lots humanities trained students can get prolonged exposure to (admittedly second-hand) economic reasoning. The reactions of many are not intellectually pretty…

  24. Jonathan Green on December 15, 2004 at 10:01 am

    Nate, thanks again for the law school contextualization. As little as I know about legal education (despite having three fomer, current, or future lawyers among my siblings), that bit of information about what you had in mind helps me not to read the line in the original post as gratuitous criticism of humanities majors. That may have been how Boris read it, and a similar thought crossed my mind on the first reading. For what it’s worth, I think interdisciplinary criticism can be a good thing, and even better if it leaves me applauding the on-field carnage from the sidelines. Full steam ahead on the articles!

  25. David King Landrith on December 15, 2004 at 7:19 pm

    I’m not familiar at all with welfare functions, so I’m going purely on your description in your post.

    I have to say that the whole thing seems to be an ill-founded endeavor. From an economic point of view, the fact that preferences are transitive also makes them relative. Thus, the realization of any given preference is the result of a trade-off. Presumably, the optimal welfare case obtains when all welfare trades have been made. But because welfare needs are fluid (now I may be willing to trade water for food, tomorrow vice versa) homeostasis is never reached, trades will never cease, and the optimal case is never obtained.

    Perhaps I’m engaged in sophistry here, since I seem to have simply defined the optimal welfare function out of existence, and this doesn’t really solve anything. But my welfare function seems to include something regarding the expression of this opinion; hence this comment.

  26. Frank McIntyre on December 15, 2004 at 10:34 pm

    DKL,

    All you do is define the welfare function over a longer period of time. A full-blown welfare function would include all the things you made choices on from today until the end of time. Each choice could be a seperate argument. This is unwiedly, and so when operationalizing preferences over time economists make additional assumptions. But the basic theory has no problem with what you describe. Water today and water tomorrow can, if desired, simply be treated as two different goods.

  27. David King Landrith on December 15, 2004 at 11:05 pm

    I see your point, Frank McIntyre. Perhaps I’m not thinking of this correctly, but I’m not sure that the period of time over which the function operates can be long enough to reach a point where all welfare trades have been made.

    Moreover, it seems that the judgment of how long we make the time horizon of the welfare function pits accuracy against usefulness. Specifically, it seems to me that if the time horizon is too short, then the the functions values have very accurate meaning but are too volatile to be accurate. If the time horizon is too long, then its values are more accurate, but less meaningful. For example, over time having sustenance is surely a baseline welfare condition. Shorter time frames allow the term having sustenance to be defined more specifically, longer time frames require it to be defined more generally. But the more generally it is defined, the less information it conveys.

  28. Frank McIntyre on December 16, 2004 at 8:31 am

    DKL,

    Obviously it all depends on what one is trying to model. If one is looking at decisions to work or not work then a longer time frame makes more sense, whereas decisions to buy Kool-Aid might be more weekly. Empirically, the decision is based on the data available. And the data collection is often base don some guess as to what time frame is of interest to the researchers’ questions. And so one tries to use a welfare function that is accurate for the things one is interested in, even if it is a lousy one for other things.

    But yes, in any model there is pretty much always some amount of tradeoff between accuracy and usefulness. The point of good modeling is to capture what is relevant to what you are trying to model, while leaving out irrelevant detail that makes the model needlessly complicated. This can be infuriating to people who don’t understand what is going on. They see the model as being unrealistic and so dismiss it, but may fail to recognize that it is sufficiently realistic to accomplish the purpose for which it was created.

    This is not such a concern for people like Nate who are just using it as an asbtract philosophical notion. If you are never really going to manipulate the function, then you can make it completely accurate across all time, containing an infinite number of goods. It only becomes and issue when one is trying to draw testable implications or use it empirically to estimate something.

  29. David King Landrith on December 16, 2004 at 9:18 am

    Fair enough, though I’d urge you to reconsider your implication that I may not know what’s going on.

    And although you’re right about the purpose of modeling, different models serve different purposes; viz., some are for clarifying and some are for operating. It seems to me that the model that Nate is working with (from what you’ve described) is a proposed clarification of the notion of optimal welfare. And while it can be used (in some sense) to show what an optimal welfare state may look like, it is not a practicable model. I had taken the topic of this post to indicate that Nate was considering this within the context of practicability.

    Moreover, since this thread represents my total exposure to the notion of a welfare function, I’m confident that there are certainly some subtleties I’m missing.

  30. Frank McIntyre on December 16, 2004 at 9:46 am

    1 : “Fair enough, though I’d urge you to reconsider your implication that I may not know what’s going on.”

    2 : “since this thread represents my total exposure to the notion of a welfare function, I’m confident that there are certainly some subtleties I’m missing.”

    My abstraction about people not knowing what was going on was not meant to be a roundabout way of talking about you, though I can certainly see that it could be read that way. Don’t worry David, if I think you don’t understand, I’ll use your name!

    On the other hand, you assert in 2 that you may be missing some subtleties. Aren’t you therefore saying that you “may not know what is going on”? Or maybe I’m missing some subtleties…

  31. David King Landrith on December 16, 2004 at 10:12 am

    Well put, and very clever, Frank McIntyre.

  32. Troy Pritchett on December 16, 2004 at 5:05 pm

    In response to “Generally speaking economists are interested in explaining and predicting human behavior.”

    Unfortunately, I think that economists have been slow to develop the theory and practical application of preference formation. It is so much easier to take them as a given. There are some exceptions and things are starting to change but for the most part economists (along with all the rest of social scientists) have a poor track record of predicting human behavior in a general way.

    I think there is an issue beyond the aggregation of preferences that needs to be clarified.

    You refer to what individual preferences God “uses”. And then you also say “we” could “use” this function to “construct” Zion.

    I think preferences and “actions under preferences” are being conflated.

    In other words, does “use” mean to describe or imagine the state of the world most preferred. This woud be equivalent to restating your close as ‘If so, then we could, indeed, use the rational actor model to construct …a model of … Zion!

    Or does “use” mean change either our incentives or preferences in such a way that Zion actually occurs in the world. If this is the correct interpretation, unless knowing God’s welfare function changes the individual welfare functions of a significant number of people, then I don’t see how knowing the social welfare function “constructs” anything other than what we currently have. For example, does knowing that it is desirable that lions to lay down with lambs actually cause lions to lay down with lambs?

    Furthermore, adopting something of theologically econo-Panglossian mode, how does one argur from either the rational actor model or from a theology of a just and perfect God that the world could be any other way than it actually is? In other words, if there was a way rational actors could make the world any better right now, than it is right now, they would have done it already.

    Likewise, if a just and perfect God could make the world any “better” right now, than it is right now, he would have done it already.

    Under these models all one needs to do to see the ideal welfare function is to look around.

    But as I stated I don’t think our social science predicts very well. For example, who among us would predict the most popular video game in 3 years, or the fertility rate in Oman in 10 years?

    But here is my question. Let’s say I wish to raise my children and my children’s children to become much better at predicting (or heaven help us) controlling the behavior of people in the world in the future, what education and/or indoctrination would I give them?

    What mix of religion, social science, neuro-pharmacology, humanities and time in the school of hard knocks would be optimal? Does a religious education make one a better predictor of atheists than an atheistic education makes of predicting the behavior of believers?

  33. Matt on December 18, 2004 at 12:08 am

    Nate:

    I thought the problems of welfare economics were pretty well-known by now and that (besides the relentless law and economics school) most economists and philosophers who are interested in normative issues in economics have moved on to other projects, e.g., Amartya Sen, who takes a “resourcist” rather than a “welfarist” approach? Why bother with welfare economics at all?

  34. Troy Pritchett on December 18, 2004 at 5:56 pm

    Well, having missed welfare economics becoming well known, let alone the problems of welfare economics becoming well-known, I am at least comforted by the fact that economists and philosophers have joined with everyone else in giving up on normative issues and moving on to other things.

    Without being too over dramatic, it is so curious to watch the norms of the modern academy – things like equality, freedom of speech and non-violence coming to seem as quaint as the divine right of kings. Its not that practices in the world ever corresponded to these norms but there was a time when they were at least the dominant norms.

    The time of every norm for itself is here.

    Likely I’m overdramatizing, but I see a major effect of September 11th, 2001 being a legitimation of unlikely norms. Its the equality of cranks and wackos. Its so odd that the effect of a physical threat is a more concrete intellectual freedom.

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