Social Choice Theory Essay

Social choice theory is as old as ancient Greek times. Social decisions, involving “diverse interests” and “concerns,” were explored by Aristotle and Kautilya around the fourth century BCE. It grew into a systematic theory around the time of the French Revolution (1789–1799). The intellectual climate during the European Enlightenment provided the necessary boost to the “reasoned construction of social order.” The subject of social choice was pioneered by the French mathematicians in the late eighteenth century, such as J. C. Borda (1781) and Marquis de Condorcet (1785). Some of the early social choice theorists were also the “intellectual leaders” of the French Revolution, as observed by Amartya Sen in 1998.

Social choice refers to judgments about the society, such as social welfare, public interest, or aggregate poverty, in view of available diversity of preferences, concerns, and predicaments of different individualizers within a society. It became popular in the context of welfare economics. It focused more on distributional justice than on utilitarianism. Social choice theory has broad relevance, including judgment about the well-being of the society as a whole; measurement of aggregate poverty; rights and liberties of persons; and social valuation of public goods, such as the natural environment.

The discipline of social choice was revived in the twentieth century by Kenneth J. Arrow. His book Social Choice and Individual Values (1951) became very popular for his “impossible theorem.” Arrow argued that even the mild conditions of reasonableness could be satisfied on the basis of social choice theory. To him, only dictatorship could deal with the inconsistencies involved, sacrificing “participatory decisions in politics” and “by being insensitive to heterogeneous interests of a diverse population” in welfare economics. In the eighteenth century, it was believed that social appraisals, welfare economic calculations, or evaluative statistics could only be “arbitrary” or “irremediably despotic” (Sen 1998, 181). Arrow’s impossibility theorem drew a major response and had a devastating effect on welfare economics as a discipline.

As A Negation Of Utilitarianism

Traditional welfare economics was developed by utilitarian economists, such as Francis T. Edgeworth, Alfred Marshall, and Arthur C. Pigou. Their approach was different from vote oriented social choice theory and garnered inspiration from the philosopher Jeremy Bentham. Jeremy Bentham and John Stuart Mill pioneered the utilitarian theory based on judgments about the social interests by “aggregating the personal interests of different individuals in the form of their respective utilities” (Sen 1998, 182).

Bentham’s concern was more with the “total utility” of the community. Utilitarianism served as the backbone of welfare economics, pursuing maximum benefit for the collective whole, irrespective of individual gains or losses. He neglected distributional issues and came under criticism by authors such as John Rawls (1971) and Lionel Robbins (1938). They found the logic of utilitarian welfare defective and without any scientific basis. While Rawls rejected it on the basis of lack of concern for social justice, Robbins rejected it on the grounds that there could be “no common denominator of feelings” (636). From the 1940s onward, the focus shifted to Pareto efficiency (optimum gains). Arrow had demonstrated that Pareto efficiency, “nondictatorship,” and “social choice with a complete ordering” could not be achieved simultaneously. Nor could a purely mathematical or formal approach be relied upon.

Contemporary social choice must deal with real-world problems and cannot ignore any conceivable cluster of individual preferences. Some preferences are bound to result in inconsistencies and incoherence in social decisions. When one prefers increasing one’s own share without bothering about others, then the majority rule is bound to be “inconsistent.” Voting may be considered as a viable choice for general elections, referendums, or committee decisions, but it may not reflect actual choice due to manipulation by the leaders, political parties, or media. It cannot help in arriving at some aggregative index of social welfare (Sen 1998).

There can be two obvious reasons. Voting requires active participation, and the opinion of someone who decides not to participate may not get any representation in social decisions. Additionally, even if one decides to participate in the voting process, there is no direct method of getting interpersonal comparisons on the basis of voting data. Because we cannot arrive at any meaningful interpersonal comparisons on the basis of choices made through voting, it is necessary to reject the consensus arrived at through voting systems in laying the foundation of a constructive social choice theory.

In Economic Theory

Economic theory draws on law and philosophy in evaluating rational decision-making. In economics, the focus is usually on maximization of utility, whereas under law an opinion may be based on shared understanding without any comprehensible reasons for which a shared understanding would lead to a shared preference. The same applies to majority voting behavior. The individual members of the decisive majority need not share the same reasons for voting or making social choices in a particular way. It is like saying that one wants to buy a white car because it is a sports car or just because it is a white car and vice versa.

According to Richard McKelvey (1976), an individual may make choices on the basis of one decisive dimension, making it difficult to organize rationally the different or plural dimensions of social choice. Two parties might form a coalition and say, “given a sports car, we would like to have it black.” An alternative pairing can form another coalition and say, “given that it is white, we would like to have a sports car.” Hence coalitions can stick to generic preferences without any stable or rational basis. Much remains unresolved, yet we find adherence to common understanding of doing a thing in a particular way. It makes it rational for players to achieve certain shared goals. Such shared understanding comes through effective communication, accessibility, and intersubjectivity. Public reason can lead to collective action and social choices, though not necessarily on utilitarian basis.

As such, interpersonal comparisons of utility cannot really help in making interpersonal comparisons of social choices. We may find variations in terms of personal heterogeneities, environmental diversities, and variations in social climate or differences in terms of relative deprivation. It is not enough to know how many people are below the poverty line for the purposes of making social choice. It is also important to understand how deprivation is shared and distributed among the poor (Sen 1998). The same logic applies to gender-based inequality and deprivation of women in traditionally unequal societies. It is not enough to have liberty; it is important to make it effective.

Bibliography:

  1. Arrow, Kenneth J. Social Choice and Individual Values. New York: Wiley, 1951.
  2. Atkinson, Anthony B. “On the Measurement of Inequality.” Journal of Economic Theory 2 (September 1970): 244–263.
  3. Chapman, Bruce. “Public Reason, Social Choice, and Cooperation.” Paper presented at the Eighth Conference on Theoretical Aspects of Rationality and Knowledge, Department of Economics, University of Siena, July 2001.
  4. McKelvey, Richard. “Intransitivities in Multidimensional Voting Model and Some Implications for Agenda Control.” Journal of Economic Theory 12 (1976): 472.
  5. Pauly, Marc. “On the Role of Language in Social Choice Theory.” Synthesis 163 (2008): 227–243.
  6. Rawls, John. A Theory of Justice. Cambridge, Mass.: Harvard University Press, 1971.
  7. Robbins, Lionel. “Interpersonal Comparisons of Utility: A Comment.” Economic Journal 43 (December 1938): 635–641.
  8. Sen, Amartya. “The Possibility of Social Choice.” A talk delivered at Trinity College, Cambridge, Great Britain, December 8, 1998.
  9. Published in American Economic Review 89, no. 3 (June 1999): 349–378.

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