Wednesday, March 19, 2008

A Long-Winded Reply to JEK

An Israeli fellow going by JEK responded to my posts on the subjectivity of value and interpersonal utility comparisons on his/her blog, seemingly entitled The Blog of the Armchair Praxeologist (I can't actually recognize the words "Armchair Praxeologist" in Hebrew, but the URL address gave it away). I figured it would be appropriate to comment on two of JEK's main points which I think are important to the discussion.

The first point JEK makes relies on a quotation I presented in which R.F. Harrod pointed out that if we completely reject the possibility of comparing utility between people, then we must acknowledge that it is impossible to say whether two pence is more valuable to a beggar than a millionaire. Harrod's point is to show that complete rejection of interpersonal utility comparison is unreasonable. Common sense tells us that as long as we assume that this is a typical beggar and a typical millionaire, then obviously we can say that the two pence is more valuable to the beggar.

But JEK disagrees. He/she is willing to bite the bullet, saying, "That is the nature of subjectivity." This point is expanded on later in the post with the argument that our common sense intuition "...comes from our own scale of values." This seems to me an important point. I think that JEK is right in suggesting that the reason we think that the beggar would value the two pence more is that we believe that if we were the beggar, we would value the two pence more than we would if we were the millionaire. If we had no such intuition, then it does not seem unreasonable to say that we might not be able to arrive at any decisive view on the matter.

When we acknowledge this, we are faced with the realization that we are not the beggar, and we are not the millionaire. If we assume that all of the individuals involved are basically the same, then it seems obvious that the beggar would value the two pence more. But in light of the clear probability of important differences existing between the beggar and the millionaire, it becomes somewhat more difficult to know for sure how to compare them.

As Menger wrote in his book, Principles of Economics:
What one person disdains or values lightly is appreciated by another, and what one person abandons is often picked up by another. While one economizing individual esteems equally a given amount of one good and a greater amount of another good, we frequently observe just the opposite evaluations with another economizing individual.

Additionally, Harrod writes:
Consider the Repeal of the Corn Laws. This tended to reduce the value of a specific factor of production--land. It can no doubt be shown that the gain to the community as a whole exceeded the loss to the landlords--but only if individuals are treated in some sense as equal. Otherwise how can the loss to some--and that there was a loss can hardly be denied--be compared with the general gain?

To this point, I am in complete agreement with JEK. However, where we part company is JEK's implication that we therefore cannot compare the utility that could be gained by the beggar to the utility that could be gained by the millionaire. Is it really conceivable that the beggar and millionaire are so different that even this seemingly obvious comparison is invalidated (remember, we're talking about a normal beggar and a normal millionaire)? I don't think that this is a reasonable position.

Perhaps it will help to put it this way. Could you actually imagine a case where the millionaire and the beggar were both normal people, and the millionaire would actually gain more utility? Let's say that first, you (magically imbued with all of the millionaire's values and desires) got to experience the millionaire's experience in getting the two pence, and doing with it whatever he would do with it. Immediately after, you were magically transported back in time to experience the beggar's version of the same experience (now miraculously having the beggar's values). Then, the situation was flipped, and you got to experience the beggar's getting the two pence from both sides. After this magical episode, do you really think there would be any possibility that you would say that the beggar didn't benefit more? It seems like however we define wellbeing and utility, as long as we do so in a way that wouldn't be completely absurd, and as long as the beggar and millionaire are normal people, we would come out of the experiment saying that the in getting the two pence, beggar's utility was augmented by a greater amount.

JEK's second argument restates my proposed claim, "I value X; X is valuable" as "X would help me achieve my ends -> X holds some utility for me -> X is valuable." He/she then explains that this is the same thing as my alternative proposed claim, "X would help me achieve my ends; X is valuable." If the first claim is restated the way that JEK proposes, this seems obviously true. In fact, the only difference is JEK's addition of a middle step.

But the problem is that "I value X; X is valuable" cannot be correctly restated as "X would help me achieve my ends -> X holds some utility for me -> X is valuable." The acceptable restatement, using this form, would be "I believe that X would help me achieve my ends -> I believe that X holds some utility for me -> X is valuable." This reliance on the beliefs of the valuer is the critical difference. JEK writes, "If X holds no utility for me, why do I value it?" The clear answer is that I value it because I am mistaken about its ability to help me in achieving my ends.

JEK attempts to offer a solution to the problem of interpersonal comparisons of utility in the form of an "independent objective standard" with which individuals could "compare their utility." Unfortunately, I'm not exactly sure what JEK is getting at; if individuals could compare their utility with a metric, and that metric were an objective standard, then it would follow that utility could be measured using that metric. Because I don't believe that JEK believes that we could measure utility, I must simply be misunderstanding. But hopefully what I've said here will be useful in some capacity.


Jonatan Krovitsky said...

I'm making small noises of joy, because last time I responded so smeone in my blog, the chap killed me.
First a technical note:
JEK stands for Jonatan E. Krovitsky, of small scenic town of Ariel up the Samarian mountains.

I'm too tired to create full scale blog response so here are two brief questions:
First, an objection to the millionaire/begger case:
"It seems like however we define wellbeing and utility, as long as we do so in a way that wouldn't be completely absurd, and as long as the beggar and millionaire are normal people, we would come out of the experiment saying that the in getting the two pence, beggar's utility was augmented by a greater amount»
"absurd»and «normal» are not positive but normative definitions. Can you redefine it?
and the second is:

"The clear answer is that I value it because I am mistaken about its ability to help me in achieving my ends.»
How do you know you are mistaken?

Answer these please. I'll explain the objective justice latter.

Danny Shahar said...

Well, I use the word "absurd" the way it's used in a reductio ad absurdum. "Normal" is taken to mean "typical" or "not unusual," so that my point cannot be objected to by saying that the beggar might be an ascetic, and would not in fact benefit very much from the two pence.

I'm not sure how one would know that they are mistaken; if they know, they would stop being mistaken. But the issue of whether or not someone is mistaken is a matter of objective fact. If someone's beliefs fail to reflect the true nature of reality, then they are mistaken. For example, I might think another beer would make me happy, when in fact it would leave me feeling dizzy and sick. My desiring the beer does not mean that the beer was desirable; in fact, it would have been desirable for me to avoid having it.

Jonatan Krovitsky said...

Still no time, Purim today, so I'll be short again:

Beggar case:
You used reductio ad absurdum comparing beggar and millionaire. But where is the real limit?
Enter my father Victor. He earns 35K a year. Replace him with millionaire. Is the claim still valid?
Objective mistake: Are you familiar with "pretension of knowledge" concept?
You cannot mistake ex-ante. Ex-ante there are only end and means. If somthing is a mean, it has value. If not, then not. "Mistake" arise from the analising the results. then you have the ultimate end and result.
Now, bot if you are right, and if you are mistaken, the vlue doesn;t change BEFORE the result. So, once again, "X helps me to achieve my goals; X is valuable" and "I'm mistaken that X helps me to achuieve my goals; X is valuable" is the same.

Danny Shahar said...

I tried to make clear that while we can coherently make interpersonal utility comparisons in extreme situations, it might be more difficult to do so at the margins. I'd suspect that your father would gain less utility from 2 pence than a beggar would, and I'd guess that he would agree. But if you insist that your father really needs two pence, then perhaps that would be a difficult conclusion to reach.

Your second point seems to be that it makes no difference whether or not we are right or wrong about the ability of some object to promote our ends. I don't know about you, but it makes a lot of difference to me. I'm not suggesting that I can tell the difference, which might be why you bring up the pretense of knowledge. But my point is that if we value something which cannot do what we think we can, then we are somehow wrong to value it; it is not valuable.

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