Interpersonal comparisons of utility (that is, of preferred positions on an individual’s preference scale) are known to be scientifically impossible in economics. LSE economist Lionel Robbins, who published the second edition of his famous Essay on the Nature and Significance of Economic Science in 1935, argued that interpersonal comparisons of utility could not be used to justify either redistribution of income or even free trade—both policies that he favored, very strongly in the last case. (See my anniversary review in the Winter issue of Regulation.)
Modern economic theory does not even need to assume diminishing marginal utility of income or consumption, only a diminishing rate of substitution between goods. Constitutional political economy à la Buchanan cleverly avoids the impossible mission of comparing individual utilities, as I point out in my review of James Buchanan and Gordon Tullock’s classic book The Calculus of Consent:
By focusing on each individual’s rational decision to adhere to a social contract that serves his interests, Buchanan and Tullock avoid the problem known as the interpersonal comparisons of utility. Such comparisons are scientifically impossible because each individual’s utility is subjective, in his own head. But, of course, an individual can decide whether he prefers one situation to another for himself.
There is no way to demonstrate that the poor get more utility from a given redistribution than the rich lose in financing the transfer. Does a rich woman from whom $50 is taken and transferred to a poor man lose less utility than the latter gains? Suppose the rich woman would have bought one more bottle of Bourgogne and the poor man buys three cases of beer with the transfer. Does your (or another external observer’s) opinion change if we suppose that the poor man buys three jugs of milk instead?
An external observer must evaluate what is better, according to his own preferences or perhaps values (“in an ideal society, the poor should drink more milk”). Interpersonal comparisons of utility are moral opinions (what society should be) or, if it is one of the parties involved who makes the comparison, self-interested claims (“I want more beer”). Hence the impossibility of scientific interpersonal comparisons of utility. There is no way to tell whether the transfer has increased or decreased “aggregate utility,” an expression that has no ascertainable meaning in economics.
Add to this that if money is redistributed from a few rich to many poor, the gain by any of the latter must be so much smaller, and the argument for redistribution is even more debatable.
There are extreme cases where nearly everybody would agree that little utility is lost on one side and much gained on the other: consider the transfer of $10 from Bill Gates to a homeless man in a tent near a Macdonald’s. But this still remains merely an intuition because the ordinal ranking of some good (more or less preferred to other goods) is not comparable across the preferences of two separate individuals. Anyway, moral intuitions about such extreme cases don’t seem to provide any general justification for coercion.
Some argue that parents implicitly make utility comparisons among their children. But is this really what parents do or should do? Don’t they instead compare different future opportunities for each child while assuming the equality of their children? Children, by definition, cannot make such evaluations, and their parents are the best placed to do it. Even then, some external observers may disagree with some parents’ decisions. The two parents may disagree among themselves. At any rate, the government is not our parent.
One might think he can read in a friend’s mind, but somebody else, including the friend himself or herself, may think differently.
When they are not constrained, politicians and other rulers may, implicitly or explicitly, make interpersonal utility comparisons among their subjects. This does not prove that their comparisons are not arbitrary or self-interested. As Anthony de Jasay wrote, “when the state cannot please everybody, it will choose whom it had better please.” Indeed, the redistribution often goes from the poor to the rich. Do interpersonal utility comparisons only break down when the results go the “wrong” way?
Some economists, including Nobel prizewinner Amartya Sen, have proposed counter-arguments against the rejection of interpersonal utility comparisons. One is that external observers or public discussion can form objective opinions on interpersonal utility. Another one is that utility as judged by the individual himself—that is, what he prefers—is not really what he prefers. Still another counter-argument is that there is more in life than what an individual likes in his own life. All these counter-arguments seem to crucially depend on assuming that external observers know, in a paternalist or elitist way, what other individuals prefer or should prefer. (For a summary of the counter-arguments, see Amartya Sen, Collective Choice and Social Welfare, Expanded edition [Harvard University Press: 2007], pp. 1-41.)
Influenced by Buchanan, I would argue that, if we hold the equality of all individuals to be a crucial normative value, public policy and the very existence of government cannot be justified by impossible interpersonal comparisons of utility. The justification must come from the enforcement by a limited government of the general rules to which individuals can be presumed to unanimously consent at some abstract social-contract or constitutional stage (see James Buchanan, Why I, Too, Am Not a Conservative [Edward Elgar, 2005]; and his seminal The Limits of Liberty [1975] [Liberty Fund, 2000]). Perhaps we can fit into this approach the economic justification of government as a producer of strict “public goods” or the Hayekian theory of the rule of law as coordinating conventions. Otherwise, only anarchy seems to be morally justifiable.
READER COMMENTS
Scott Sumner
Feb 1 2022 at 1:09pm
You say that interpersonal utility comparisons are just an opinion. I agree. But isn’t almost everything else in this post just an opinion? Where does the belief in “the equality of all individuals to be a crucial normative value” come from? Can it be established scientifically? Or how about:
“justification must come from the enforcement by a limited government of the general rules to which individuals can be presumed to unanimously consent at some abstract social-contract or constitutional stage”
Or:
“Perhaps we can fit into this approach the economic justification of government as a producer of strict “public goods” or the Hayekian theory of the rule of law as coordinating conventions. Otherwise, only anarchy seems to be morally justifiable.”
What sort of political views are not opinions? Which ones are scientifically proven?
In my view, there is an enormous amount of evidence that a poor person values an extra dollar more than a rich person, although this claim remains just my opinion.
Daniel
Feb 1 2022 at 2:49pm
Indeed.
And with a large enough sample size of utility functions, although the “average” will not be exactly the same as any particular individual’s utility function, one could “know” a typical utility function, not in a paternalistic or elitist way. I’ll note that economic theory requires assumptions about market participants’ utility functions – even if relaxing an assumption of equivalent functions, some definition to their heterogeneity is needed unless one is to observe all participants’ utility functions. The same applies here – we may not know every individual rich or poor person’s functions, but we can try to learn that of a “rich” type and of a “poor” type. The fundamental point of non-comparability is a good one in that it cautions us about how and how far to generalize and what-ifs abound, but at some point we have to make a generalization.
Pierre Lemieux
Feb 1 2022 at 8:40pm
Daniel: A technical point showing that the difficulty is worse than you suggest (if I understand you well): Assuming we could observe one individual’s utility function (which we cannot: we can only observe a small number of his actual choices given his budget constraint), any monotonic transformation of his utility function would give exactly the same ordinal ranking. And there is an infinity of such monotonic transformations. (Or at least, that’s how economists model utility functions since John Hicks.) I would suggest that we don’t have to make generalizations if none can be made. Moral and political philosophers have a bit more leeway.
Daniel Kian Mc Kiernan
Feb 1 2022 at 10:23pm
A technical note: Transformations must be restricted to the affine if expected utility maximization is accepted. An uncountably infinite number of transformations still remain. (Expected utility maximization has deep problems; but it is the prevailing model.)
Daniel
Feb 2 2022 at 12:36pm
Another point where we have to generalize is from measure to construct. Your point about ordinal utility is well-taken though. One can attempt to characterize a valuation function (aka cardinal utility function, related: Daniel Kian Mc Kiernan’s comment), which has its own problems, the chief one, as considered here, being the need to confirm measurement invariance.
Daniel Kian Mc Kiernan
Feb 1 2022 at 10:17pm
A necessary condition for a measure to correspond to preferences is that weak preferability be a complete preordering. It is not (Mc Kiernan, “Indifference, Indecision, and Coin-Flipping”, Journal of Mathematical Economics v 48 #4).
Nor, if it were, would this imply that, of the infinitely many measures that would proxy preferences, one would be uniquely meaningful — the measure seen by G_d as it were.
But, if such a unique measure did exist, many other frankly bizarre assumptions would be needed for error in summation somehow to cancel mutually.
For what it’s worth, the concept of utility is that of usefulness. The notion of utility as a measure is a problematic conception of the concept. The general notion of marginal utility does not hang on this conception.
Andrew_FL
Feb 1 2022 at 4:14pm
There is absolutely zero evidence a poor person gets more utility out of an extra dollar than a rich person.
robc
Feb 1 2022 at 4:24pm
Even better:
Lets make two assumptions:
One: The poorer the person, the more utility from the last marginal dollar.
Two: Charity is given from the last marginal dollars.
There is a high probably that the last marginal dollar a rich person earns will, under 2, go to someone even poorer than the poor person being discussed. And thus, will generate more utility.
Therefore, the last marginal dollar a rich person earns generates more utility than a poor person.
There are a whole lot of caveats and unlisted assumptions in that argument, but I think it makes your point stand, there is, and can be, no evidence about relative utility.
Pierre Lemieux
Feb 1 2022 at 8:09pm
Andrew_FL: I agree: I don’t think there is or can be any evidence (in the scientific sense) either. Such evidence would require (1) that we measure utility in a random sample of receivers and in a random sample of donors, and (2) that we compare both. There is no way to measure one person’s utility except with revealed preference, which will only give ordinal comparisons (a BMW is preferred to a Kia). And there is no way to scientifically (as opposed to morally or self-interestedly) compare ordinal indexes of utility between two persons.
Warren Platts
Feb 2 2022 at 8:15am
Couldn’t you just look at actual purchases of a bunch of people over a period of time and then compare them. Indeed, don’t companies like Amazon & Google hire expensive “data scientists” to do this sort thing on an everyday basis?
Pierre Lemieux
Feb 2 2022 at 11:11am
Warren: A good answer to your good question rapidly gets technical (you would have met the answer if, from U. of Chicago, you had pursued in economics instead of engineering–even if welfare economics was not the strong point Chicago economics). It is what the “revealed preference” in my answer to Andrew_FL referred to. Revealed preference can only give us, at best, one point on one consumer’s utility function; it says nothing about other choices or the form of his utility function. When you aggregate individual choices into market choices (you work with market data), you get nothing that would resemble a “collective utility function” or welfare function: that’s part of how Samuelson proved that a “collective utility function” does not exist. See Paul Samuelson, “Evaluation of Real National Income,” Oxford Economic Papers, 1950; see also his “Social Indifference Curves,” Quarterly Journal of Economics, 1956.
Scott Sumner
Feb 2 2022 at 1:46pm
There certainly is a lot of evidence. You might reject that evidence, just as you might reject evidence in other areas of economics. But there is evidence. One piece of evidence is the many studies showing diminishing marginal utility of income or wealth.
Is that evidence definitive? No, but is any empirical evidence in economics ever definitive?
Again, that’s “just my opinion”, as are all of the other comments in this blog.
Pierre Lemieux
Feb 8 2022 at 10:35am
Scott: The only “lot of evidence” I can think of is the fact that demand curves slope downward. But that is no evidence at all that the marginal utility of income is diminishing. Neglecting income effects, a downward demand curve is only evidence of a diminishing rate of substitution. A diminishing rate of substitution is implied by, but does not imply, diminishing marginal utility.
B
Feb 1 2022 at 6:13pm
The normative value comes from the consent of the individuals.
That it has normative value is a testable hypothesis, testable by agreement/ consent of the individuals themselves.
The scientifically testable hypothesis being, that this value source being a good normative yardstick can find unanimous consent. Can the hypothesis that this value source is in the individuals interest be answered by a unanimous yes?
Yes, trivially.
And it is probably really the only normative value source that is testable and have a chance of passing the consent test.
By contrast, the normative yardstick of a social welfare rule that makes A worse off to make B better off can hardly find the consent of A, and hence will fail the unanimous consent test.
Actual unanimous consent will be hardly possible on levels of specific distributions (e.g. taking from A to give to B, passing specific law ABC).
But it becomes (conceptually) possible if very general rules are evaluated (at level of constitutional choice: political system with rule of law, rule-constrained majority democracy, supermajority requirements for certain topics, market economy..). As under the veil of uncertainty on how the general rules will affect individuals personally over a long time, distributional consequences are outweighed by the general efficiency properties of the rules.
And at this general level, a limited social insurance scheme could also find unanimous consent (because of uncertain future, all could find it worthwhile to avoid extreme poverty, and pay some taxes to avoid this).
But the normative value source is not the marginal utility of money as determined in some interpersonal utility comparison (independent of individual consent). Instead it is the consent of all individuals to such a scheme, based on their own intra-personal utility comparisons (would prefer to pay some limited taxes to avoid extreme poverty scenarios…) that gives normative value to such a scheme.
Again, a testable hypothesis.
(By the way, one should not confuse unanimity as a normative criterion, and unanimity as a decision criterion for collective choice (all could unanimously agree to take certain decisions by majority vote, and some as individual decisions, as this produces a better outcome pattern, as judged unanimously by all))
Scott Sumner
Feb 2 2022 at 1:49pm
It’s just your opinion that consent is a better criterion than utility maximization.
Jose Pablo
Feb 3 2022 at 11:20pm
What is “utility”?
In which units is “utility” measured?
How can you add up “things” you don’t even know how to measure?
Is not “utility” just an “opinion”?
A relative “rich” person in Botswana values an extra dollar more than a relatively not so poor person in Newark?.
“Utility” is to the economist what “ether” was to the XIX century physicist. It is a pity that some “sciences” are well behind others.
Pierre Lemieux
Feb 4 2022 at 3:11pm
Jose: That’s an important argument in your penultimate paragraph: If someone really believes in the diminishing utility of money, he should probably agree with the redistribution of a large part of American incomes to people in underdeveloped countries, and even to some people in developed ones. Perhaps other assumptions are necessary, but favoring such transfers would be the default option.
Jose Pablo
Feb 3 2022 at 11:21pm
And, on the other hand, I fully understand what “consent” is.
It is not what happens when I pay my taxes.
Pierre Lemieux
Feb 4 2022 at 3:28pm
Jose: However, the power of James Buchanan’s consent and social-contract argument should not be discarded too lightly. I myself committed that error during close to one decade. After realizing that his arguments were important, I translated The Limits of Liberty in French. It then took me more than three decades to realize how powerful his arguments were. If you want to perhaps save more than four decades of intellectual anguish, read my reviews of The Limits of Liberty and of his older book with Gordon Tullock, The Calculus of Consent, plus, importantly, my forthcoming Regulation review of his small 2005 book Why I, Too, Am Not a Conservative.
Pierre Lemieux
Feb 1 2022 at 6:39pm
Scott: We must distinguish between scientific opinions (economic-scientific ones, in this post) and non-scientific opinions. Scientific opinions are the result of logical theories that are not empirically disproven (quite Popperian, I would think). Among non-scientific opinions are normative values, which can be part of logical ethical theories but can’t be empirically proven. My claim, which has been more mainstream than not in economics for more than a century, is that interpersonal comparisons of utility are non-scientific opinions. I wrote “are known to be scientifically impossible in economics.” They are, at best, normative (moral) opinions.
Indeed, it is important to distinguish between the normative and the positive in any policy proposal. (In Why I, Too, Am Not a Conservative, Buchanan explains “the normative vision of classical liberalism,” as the subtitle says.)
To take a simple example, “an increase in the minimum wage will increase unemployment” is a scientific-economic result. “This increase in unemployment is a low price to pay for the utility gained by the workers who will see their wages increased” is a normative statement. “Our party will get more votes because nobody sees the jobs lost or not created” is a political statement.
Warren Platts
Feb 2 2022 at 10:26pm
That’s a good, clear example. I see what you’re trying to say now. My tariff example probably should be considered more of a normative statement. (Am in the middle of Case & Deaton’s Deaths of Despair. The whole book is awash in interpersonal utility.)
BC
Feb 3 2022 at 5:40am
“Where does the belief in ‘the equality of all individuals to be a crucial normative value’ come from?”
Pierre prefaces the clause with the conditional “if”: “*if* we hold the equality of all individuals to be a crucial normative value…” Of course, one can’t prove an axiom or “self-evident truth” such as the equality of all individuals. One can, however, show that other claims can’t simultaneously be true if one accepts a particular axiom or set of axioms. Pierre merely claims that public policy justified by interpersonal comparisons of utility is incompatible with equality. Given how many people do axiomatically accept equality, it would seem worthwhile to point out that interpersonal comparisons of utility are inherently anti-equality.
Pierre Lemieux
Feb 4 2022 at 11:58pm
BC: You make an important point.
BC
Feb 3 2022 at 6:05am
“a poor person values an extra dollar more than a rich person”
In light of all the empirically observed philanthropy and for-profit investment, this comparison doesn’t seem to be the relevant one, which is why I also object to Pierre’s thought exercise where “nearly everybody would agree that little utility is lost on one side and much gained on the other: consider the transfer of $10 from Bill Gates to a homeless man in a tent near a Macdonald’s”.
Empirically, we observe that Bill Gates donates much of his marginal dollars to activities like saving the world’s poor children from disease. Other wealthy people invest their marginal dollars in economically productive activities that greatly increase others’ utility, even if their motivation is simply to amass wealth for wealth’s sake (ego). Diminishing marginal utility of consumption makes it all the more likely that wealthy people will allocate marginal dollars to philanthropy and investment rather than to their own (low-utility) consumption, in agreement with empirical observation. So, even if one accepts the notion of interpersonal comparisons of utility, one must compare the total utility across all persons globally and in the future when comparing $10 in Bill Gates’s hands to $10 in the hands of a homeless man. That turns an obvious case in which “nearly everybody would agree” into a non-obvious case in which nobody really has nearly enough information to make a judgement.
B
Feb 1 2022 at 7:43pm
After some thought, I would like to put my answer to the question “where does the normative judgement of individual equality come from, and is it scientifically testable”, the following way:
The economic scientist who wants to do “value free” science while offering policy advice to an audience, must limit his work to offering testable hypotheses about means/ends relationships.
E.g. “if you want to achieve ABC, do policy measure XYZ.”
Such hypotheses can be
a) wrong/ falsified, if measure XYZ does not in fact lead to ABC, or
b) irrelevant, if the audience does not actually want to achieve ABC.
An economist can choose unanimous consent/ normative equality as normative value yardstick on which to base his scientific hypotheses.
E.g., “measure XYZ should be able to find unanimous consent, because I hypothesize it has outcome pattern 123, which I hypothesize is an outcome pattern preferred by all over the status quo”.
Or, an economist could choose to offer hypotheses of the type: ” if you want to maximize a specific social welfare function (e.g. maximize a certain weighted sum of individual utilities) then do XYZ”. Or even, “to maximize wealth and power of Mr. tyrant, do XYZ”.
The choice of which kinds of explicit “normative ends” to base ones hypotheses on, is, on the one hand, a simple preference/ value judgement of the economist. (Note that hypotheses in the sense above remain positive, not normative, Statements, if they are expressed as if-then statements)
On the other hand, the question of whether a hypothesis is “relevant” to an audience (in the above sense of being a measure that furthers their interests/ goals in their own judgement) is a scientifically testable hypothesis itself. It’s test is simply the actual consent of the audience that they do, in fact, would like to achieve goal ABC.
And it is much more likely (by design) that hypotheses based on the unanimous consent criterion will be “relevant” to all addressed individuals/ the whole inclusive audience, and thus be able to find the unanimous consent of the inclusive group of ALL affected by a policy measure, than those based on other value criteria (be it maximizing a social welfare function, or the maximizing of power of a tyrant).
(a hypothesis based on maximizing social welfare function X (taking money from A to give it to B, as it will maximize sum of marginal utilities) is of course beneficial to B, but “irrelevant” to A, as if it makes him worse off in his own judgement A would not have any interest in this specific policy advice. )
As mentioned in my other comment, one must take care of distinguishing between unanimity as normative yardstick (= normative equality of all individuals), and unanimity as actual decision procedure.
Also unanimous agreement more likely to be obtained on policy advice on sufficiently general rules, than on specific single issue policy measures.
Pierre Lemieux
Feb 2 2022 at 10:43am
B: This (together with your previous comment) is a remarkable summary of. and complement to, Buchanan’s (and Tullock’s) constitutional political economics. Thanks for your contribution and let us know if you have published or will publish something along these lines.
A confession: One thing that still bothers me in this contractarian approach is that it seems to assume that, at the constitutional stage, nobody is an extreme risk-seeker. This question probably has no relevance to Rawls’ theory, where the veil of ignorance is so opaque that nobody knows to which extent he is a risk seeker or a risk averter. In Buchanan (at least in The Limits of Liberty), the answer seems to be that extremer risk seekers (or Attilas) will be bribed by the others (they will sell their consent).
Richard Wallace
Feb 1 2022 at 8:00pm
Another matter ignored by redistributionists is that utility is affected by how the transfer is accomplished. If someone coerced me to give up my marginal dollar, the utility loss is much greater than if I choose to give the dollar.
Pierre Lemieux
Feb 1 2022 at 8:19pm
Richard: Interesting point. But note that somebody who likes state coercion, or the extreme social-contractarian who does not believe there is such a thing as state coercion, might prefer to be “forced” by the state to give rather than to give to private charity. Conversely, the receiver may prefer to be given by somebody forced to give to him as it confirms his opinion that he has a right to be given to. Of course, we don’t know on which side there more utility because there is no way to compare utility interpersonally.
Scott Sumner
Feb 2 2022 at 1:56pm
“Another matter ignored by redistributionists is that utility is affected by how the transfer is accomplished.”
Yes, many people ignore this issue. I don’t. Taxes are costly in all sorts of ways.
Jose Pablo
Feb 3 2022 at 11:42pm
As it is robbery. Another “utility maximizing activity”. After all, in a significant number of cases, during a robbery property is “transferred” from a higher income individual to a lower income individual.
A burglar can break into your home and argue with you that with his act he is “maximizing utility”. And he can use the “lot of evidence” showing that the “marginal utility” of the dollars being transferred is higher in their hands than in yours, to convince you of this point.
I suspect too that there is also “lot of evidence” than the “marginal utility” of an aditional dollar is higher for a young night owl than from an old tenured professor (never seen analysis on that but I have observed ample anecdotal evidence).
I am starting to be very suspicious of any “utility maximizing reasoning” at this point.
Jose Pablo
Feb 3 2022 at 11:45pm
Needless to say that this is just my opinion on the arbitrariness and self-interested nature of any argument regarding “maximizing utility”.
Warren Platts
Feb 2 2022 at 8:42am
A lot of people will say, with respect to tariffs, that the utility that manufacturing workers gain outweighs the utility lost by consumers paying somewhat higher prices. Thus if Robbins likes free trade because of political or libertarian reasons, it would be very convenient for him to disingenuously explode the very idea of interpersonal comparisons of utility. So maybe Robbins fell into the same self-serving trap that Buchanan warned about?
Pierre Lemieux
Feb 2 2022 at 11:25am
Robbins did not dislike redistribution either, and he might have been willing to redistribute to displaced inefficient workers part of the savings realized by consumers’ patronizing efficient foreign producers. We may not need to invoke ghosts like interpersonal utility comparisons here. If domestic producers gained in money more from protectionism than consumers lose, they could cut their prices until consumers voluntarily stopped patronizing foreign producers (neglecting collective action problems and how to actually do the redistribution). By the way, the fact that “producers” in economics include workers, executives, and shareholders also brings our attention to the fact that the big supporters of protectionism are the owners of inefficient companies (corporate welfare bums).
Matt Taylor
Feb 2 2022 at 2:58pm
In this otherwise excellent piece, I am sad to see you using the term ‘redistribution’. It’s a trojan horse term. It suggests that wealth is created and then distributed (meaning ‘shared out’). In fact, wealth is created by producers transforming things they own (into a form or state more valued by them and/or other people). There is no ‘distribution’ in this process. Speaking of ‘redistribution’ tends to smuggle in the false idea of ‘distribution’. Of course wealth is ‘distributed’ in the sense of being held by various people, but that is a very different meaning.
In a similar vein, it’s a pity to read that ‘Otherwise, only anarchy seems to be morally justifiable.’ By ‘anarchy’ I suspect you mean ‘society without a ruler’ (rulers are typically referred to as the sovereign or government or authority), but most people understand anarchy as chaos, the opposite of order. So your text is likely to promote the belief that order is only possible in a society subject to a ruler. That’s simply false. If you ‘hold the equality of all individuals to be a crucial normative value’ (which I do), then you should reject the claimed right of any ruler to the obedience of his subjects, since the ruler-subject relationship is built on denying that equality.
Pierre Lemieux
Feb 3 2022 at 2:47pm
Matt: On your first point, I understand your concern: imagining that there are two distinct and separate processes: production and distribution; you bake the cake and then you distribute it. I agree with de Jasay that once it is produced, there is nothing left to redistribute, except for redistributing from those who have produced it to those who haven’t. This is the sense in which I use “redistribution.”
I also agree (partly) with your second point that anarchy does not necessarily mean disorder, and this is how I meant it in my post. The question, however, is whether it is necessarily “ordered anarchy” and how exactly it is or would be ordered. I have argued against both de Jsasy and Huemer that the answers are not as clear as you and I would want them to be. See my two articles “The Valium of the People” and “A Wide-Ranging Libertarian Philosopher, Reasonable and Radical.”
Thomas Strenge
Feb 3 2022 at 10:49am
Also, Hayek pointed out the importance of time and place for individual decision making in his essay on the use of information and society. The poor person might buy beer with his extra ten bucks AND he might buy milk. His own utility changes continuously!
Jens
Feb 5 2022 at 1:16am
So does this also mean that there is no scientific way to evaluate whether a bottle of water that saves a person dying of thirst has more benefit for him than for another person who is in a medically unspectacular nutritional state ?
So does this also mean that a person who has a specific opinion, with a tendency to generalize, regarding the distribution of the bottle of water between these two people – without himself having a clearly defined property right to the bottle of water – is paternalisitic or elitist ?
Pierre Lemieux
Feb 5 2022 at 10:34am
Jens: To your first question, the answer is yes. It is a matter for philosophers. See my discussion of Michael Huemer’s argument at https://www.cato.org/regulation/winter-2021/2022/wide-ranging-libertarian-philosopher-reasonable-radical. Note however that if everybody accepts that all individuals are equal, positive implications may follow (see Buchanan and, above, the reflections of B and I).
Your second question is a bit more complicated, depending on what the third party wants to do and what is meant exactly by elitism and paternalism.
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