Introduction
The Introduction contrasts voting and markets with dictatorship and social convention (such as those in a religious code). Both exemplify social decisions. Voting and markets facilitate social choice in a sense, whereas dictatorship and convention limit it. The former amalgamate possibly differing tastes to make a social choice. The concern is with formal aspects of generalizing such choices. In this respect it is comparable to analysis of the voting paradox from use of majority rule as a value.
In the simplest case of the voting paradox, there are 3 candidates, A, B, and C, and 3 voters with preferences listed in decreasing order as follows.
By majority rule for 2-candidate votes, A beats B, B beats C, but C beats A. Majority rule works for an individual selecting consistently among the 3 candidates but not necessarily for the "social choice" in any general sense. |
Arrow asks whether other methods of taste aggregation (whether by voting or markets), using other values, remedy the problem or are satisfactory in other ways. Here logical consistency is one check on acceptability of all the values. To answer the questions, Arrow proposes removing the distinction between voting and markets in favor of a more general category of collective social choice.
The analysis uses ordinal rankings of individual choice to represent behavioral patterns. Cardinal measures of individual utility and, a fortiori, interpersonal comparisons of utility are avoided on grounds that such measures are unnecessary to represent behavior and depend on mutually incompatible value judgments (p. 9).
Following Abram Bergson, whose formulation of a social welfare function launched ordinalist welfare economics, Arrow avoids locating a social good as independent of individual values. Rather, social values inhere in actions from social-decision rules (hypostatized as constitutional conditions) using individual values as input. Then 'social values' means "nothing more than social choices" (p. 106).
Topics implicated along the way include game theory, the compensation principle in welfare economics, extended sympathy, Leibniz's principle of the identity of indiscernibles, logrolling, and similarity of social judgments through single-peaked preferences, Kant’s categorical imperative, or the decision process.
Read more about this topic: Social Choice And Individual Values
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