Preferences for Me and Objective Goods for Thee

On libertarian hypocrisy

The core conceit of freshman economics is that it plays no favorites with our preferences. I need, you want, they demand; my food, your shelter, their crack cocaine. It does not matter what or how or who is wanting - a total order over bundles can subsume it all. The “utility” employed in conventional models of consumer choice is really no such thing. It feigns no hypothesis as to how his and her pleasures might compare. It is simply a mathematical artifice, a way of plumping up the sparse skeleton of preference to fit more analytic tools.

This is a gross simplification, of course, but a potentially productive one: the problems that require careful attention to welfare in the absolute and not just the this-or-that of preferences are real, important, and spectacularly hard. Worse yet, they’re political. Assert that certain interests simply count for more, and the others will complain; consider us all equally, and you can be sure that our would-be aristocrats will come knocking at your door. Far better to restrict ourselves to ordinal utility and forget interpersonal comparisons entirely; this way, at least, we can work without disturbance on safely neutral ground.

The problem is that this is not actually true. Even on their own terms, even if we believe ourselves to be Homo economicus, such models are always value-laden: the scope of things they permit us to prefer is narrowly constrained by the functional forms they suppose our preferences may take. In the simplest case, we consider only bundles of concrete consumer goods: they are had or not had, enjoyed or out of sight. Each consumer is an island for whom more land is always good. A particularly sophisticated sort of intro class may dip its toe into questions of rivalry and exclusion, and even dare to justify tax funding of our roads. If we are feeling bold and ready to field no shortage of complaints, we may at last make room for preferences which range over whole markets and their histories, over who has what and how they got it, what’s for sale since when and where, and other given facts besides. Our reasonable desire to simplify our models is thus transformed into a systematic bias towards wants which can be satisfied in certain sorts of ways: purchases are preferred to policy, which is preferred to real politics in turn.

Real economists, a few midcentury throwbacks aside, are well aware of this. Positional goods have been on their minds for fifty years or more. But you wouldn’t know it from the way that economics fans talk politics. If you’ve had much exposure to the sort of libertarian who knows that hardline deontology really can’t convince, you’ve no doubt heard inequality defended on the more modest grounds that it simply doesn’t matter. Someone getting wealthier, they say, can’t in itself make someone else worse off. But this is true only insofar as we understand “worse off” in narrowly financial terms. This, however, sounds an awful lot like cardinal utility, dangerously close to an objective theory of the good. We are supposed to be above such things; who are we to say that this one revealed preference, alone out of all of them, is somehow simply “wrong”?

But suppose that point has been conceded, and the inegalitarians retreat; they might well claim that such preferences are stupid, that the whole affair is just some trivial complaint. Their choice of favored models would then be undermined - but let’s be charitable and grant that the damage is not fatal, and the framework of consumer choice survives more or less unscathed. Even so, any sane account of objective human goods must concede that inequality matters, whether or not it “should”.

Poverty speaking relatively does not entail material deprivation in a sense more absolute - but it can entail social defeat, and there’s no rising tide for that. There’s some irony in this: the same people who under other circumstances place enormous stock in status are inclined to neglect it where it most clearly counts. Almost everything is signaling, they say, from charity to art. But it seems they think consumer spending runs on nothing more than simple joy in owning fancy stuff. But man cannot live on mere stuff alone. A loss of status hurts - and the pain is no less material for the abstract nature of its cause. Status confers security, and presumes respect; its loss, beyond the shock and pain of it, is quite simply bad for you - it opens up the newly branded loser to real social harm.