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

In a series of recent papers a number of economists and philosophers have been wrestling with the age-old problem of reconciling the value we place on the exercise of individual liberty with the value we also seem to accord to economic efficiency. Amartya Sen put the problem in its starkest form when he showed that for some configurations of individual preferences the 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 the 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 the Paretian liberal" from the larger perspective of a general divide which exists in ethics between consequentialist and deontological theories and so demonstrate the source of this inconsistency. In the process I hope to show why economists, and in particular those economists who are the practitioners of the 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 the 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 the distinction has important implications for Sen's invocation of the usual collective rationality conditions of social choice theory. Section 5 anticipates a possible objection to my arguments and attempts an explanation of the nature of a moral dilemma. I finish with some concluding remarks in Section 6