Individual Rights, Good Consequences, and the Theory of Social Choice*

Abstract

In a series of recent papers a number of economists and philosophers have been wrestling with age-old problem of reconciling value we place on exercise of individual liberty with value we also seem to accord to economic efficiency. Amartya Sen put problem in its starkest form when he showed that for some configurations of individual preferences two following principles are not consistent with one another: (i) The Pareto Principle: If every individual in society prefers some state of affairs x to another one y, then y should not prevail if x is attainable; and (ii) The Principle of Individual Liberty: For each individual in society there are some personal matters such that if privileged individual prefers, say, w to z, then z should not prevail if w is attainable (eg. to sleep on one's back (w) or one's stomach ( z ) , all other things in society being equal). The purpose of this paper is to view Sen's problem on the impossibility of Paretian liberal from larger perspective of a general divide which exists in ethics between consequentialist and deontological theories and so demonstrate source of this inconsistency. In process I hope to show why economists, and in particular those economists who are practitioners of theory of social choice, are committed to a theoretical structure which renders individual rights inconsequential. Section 2 of this paper summarizes Sen's original theorem. Section 3 discusses above-mentioned divide in ethics between consequentialism and deontology. Section 4 gives an example, interpreted in Sen's terms, of a situation in which this distinction in ethics may be important. The section also shows that distinction has important implications for Sen's invocation of usual collective rationality conditions of social choice theory. Section 5 anticipates a possible objection to my arguments and attempts an explanation of nature of a moral dilemma. I finish with some concluding remarks in Section 6.