Utilitarianism, at least initially, was about 'the greatest good of the greatest number'. The question was immediately asked as to why Utilitarians did not spend their spare time giving blowjobs to needy homeless people? The answer was 'disutility'. Even Bentham- who was a total slut- thought he'd experience more discomfort than the hobo in question would gain in terms of pleasure. If sucking off the homeless was mandatory, home owners would flee the jurisdiction. Welfare econ, when it comes to redistributive measures, must take account of disutility.
One may say that one's utility or pleasure depends only on what actually gets. But, the truth is, you become dissatisfied if you know you could get something much better. Thus, I may be happy at my job because I'm given enough to eat and am only beaten on Friday evenings. Then I discover I could get paid a lot of money for doing exactly the same job somewhere else. Moreover I would not be given any beatings at all. Suddenly, I become dissatisfied with my current employer. I experience disutility. This causes me to move somewhere else and get a job where I earn a lot of money.
Sen, to my knowledge, only once speaks of disutility
Disutility and stigma: A system of support that requires a person to be identified as poor (and is seen as a special benefaction for those who cannot fully fend for themselves) would tend to have some effects on one's self-respect as well as on respect by others.
But being identified as a rich sucker who can be squeezed till 'the pips squeak' creates yet more disutility. It can cause tax revenue to collapse as the rich flee the jurisdiction. This leads to entitlement collapse. It is one thing to get paid a little money because you are labelled an unemployable bum. It is another to be labelled an unemployable bum and then told you won't get any fucking money coz of the deficit.
In any case, if a Society wants to promote 'self-respect' it could ban the wearing of expensive clothes or other 'signals' of higher income and 'respectability'. Indeed such sumptuary laws have frequently been promoted by religious and political leaders.
This may distort the seeking of help, but also there are direct costs and losses involved in feeling-and being-stigmatized .
Not in India. Caste associations engage in costly agitations to get declared Untouchable or Educationally Backward or Really Stinky and Stupid.
Since the matter of self-respect is often taken by policy leaders to be of rather marginal interest (and considered to be a rather "genteel' concern), I take the liberty of referring to John Rawls's argument that self-respect is "perhaps the most important primary good'' on which a theory of justice as fairness has to concentrate.
Sen came from India. Indians go crazy with joy if they get even the tiniest sum of money or sliver of affirmative action from the Government. Dominant castes- like Gujjars (after whom the great state of Gujarat is named)- demand 'Scheduled Tribe' status. But plenty of Americans would like to get affirmative action by being identified as the descendant of slaves or indigenous victims of genocide.
Stiglitz- who thought highly of Chavez's economic policies in Venezuela- praises Sen's 'work' on inequality. He didn't get that implementing 'an inequality averse social welfare function' would cause Welfare to collapse because the productive would run away.
Stiglitz writes
Sen made two even more important contributions to the policy and conceptual debate.
of China- right? That's why it has done so well.
The first was to emphasize that, in assessing the performance of the economy (or more broadly, society), one should not look only at outcomes (the incomes or consumptions that individuals enjoy), but also at the freedom they give for human action,
Cool. Suppose a small country has only one industry- viz. educating Scientists. It should look not only at outcomes- the income or consumption its alumni enjoy- but also the freedom students have for human actions- e.g. being able to shit on their Professors while taking copious amounts of drugs.
The problem here is that the healthy exercise of freedoms gets reflected in outcomes. It is double counting to include them. The unhealthy exercise of freedoms negatively impacts outcomes. Why place a value on it?
which in turn depends on the capabilities of individuals and the scope they have for participating in the decisions that affect their lives.
So, not content with double-counting the freedom to achieve an outcome alongside the outcome itself, Stiglitz wants a triple-counting of the capability underlying the freedom which achieved the outcome. Why stop there? Why not also count the lurve and the faith and the hope and the good vibes which underlie the creation of the capability to have a capability?
Seriously, is this how these guys grade their students? You attend only half the lectures and thus can only answer half the questions on the exam paper. But the Prof. takes account of all the time you spent masturbating and gives you extra marks for that. Sadly a goat in Patagonia gets the top mark in the exam because it showed the capability to eat an entire warehouse full of the Professor's textbooks. Since the insurance company paid out in full, the goat gathers up all the glittering prizes and is tenure tracked.
The emphasis on capabilities is congruent with the emphasis on “opportunity” on which modern political discourse has centered.
Very true. That's what got Trump into the White House. Modern Political discourse.
If all individuals had the same opportunities, including education and access to basic necessities of life (e.g. health care or food, so that, for instance, they do not suffer the lifelong consequences of lack of medical care or malnutrition), inequalities in income or consumption would not be of great concern; in such circumstances, inequalities would simply reflect the fact that some individuals work harder and others do not.
Nonsense! Sen himself understood that there would be differences in 'metabolism' such that inequality would persist. On the other hand, only a very primitive society would have equality of opportunity as defined above.
The inequalities that are so marked in our societies are, however, only partly the result of differences in preferences; they reflect differences in opportunity sets and in “luck,” that is, even when individuals on average have the same opportunity set, even when individuals work just as hard, some win one of life’s many 2 lotteries, and wind up wealthy, and others lose.
Also, we have actual lotteries. The other point is that some service provision is 'positional' . We want to see the best actors or football players not the ones who are so-so. Product differentiation is associated with market power.
Parsing out the relative importance of these different sources of inequality is not easy;
It is easy enough. Increase elasticities of supply and demand and you eliminate economic rent. This has to do with reducing disutilities of various kinds. For example, I've long been kept out of the lucrative market for pole dancing because I experience shame when I have to take off my clothes in front of a bunch of leering men. Copious provision of top shelf liquor is required for a potent source of income inequality to be eliminated. Also, I want to marry Rupert Murdoch. No fucking pre-nup. Just see to it already.
but there are obviously fundamental differences in the appropriate policy responses.1 The difficulties of ranking opportunity sets (when one opportunity set is “more equal” than another) are even greater than those we discussed earlier in ranking probability distributions of income.
Fuck off. The latter is au fond 'frequentist'. The former is a wholly unknown and unknowable configuration space. Where Hohfeldian incidents arise, opportunity sets are interdependent except in the sense that they are unknowable.
Focusing on just two commodities, it is easy
it is impossible. Utility or disutility is not a function only of commodities. Nor are opportunities. Saying one guy can have more of everything tells us nothing about his opportunities as opposed to a specific type of endowment.
to assess whether one individual’s opportunity set is better than another’s
Fortune tellers may pretend to know 'opportunity sets'. Economists have to acknowledge that 'Knightian Uncertainty' means we can have no such knowledge,
if it lies outside the other, it clearly is better. But even if one individual’s opportunity set lies outside the other, the extent to which it does so depends on the axis (vertical or horizontal) on which we make our measurements.
It also depends on the guy not getting run over by a bus. All we can say is, ceteris paribus, guys with a higher income can buy more stuff than guys who don't have a pot to piss in. But this is scarcely an insight worthy of a PhD.
However, the situation changes if budget constraints cross. Then some individuals might prefer one budget constraint, others the other.
This is only because of the 'income effect'- i.e. the change in real income occasioned by a change in relative prices. Suppose I drive into work. An increase in the price of petrol makes me poorer while, it may be, a guy who walks to work feels no worse off.
The point becomes particularly relevant when we think about the two goods as “consumption” and “leisure,” for all individuals have the same endowment of leisure (though not necessarily with the ability to use it well.)
No. They have different endowments of 'uncommitted time'. A Mum with small kids has less leisure and less time she can use for paid employment than a single person, ceteris paribus.
One aspect, the importance of which can shift greatly over time, is the provision of public goods.
This is 'non-rival' and 'non-excludable' goods. If one person get it, everybody gets it. This could be stuff like National Defense. Sadly, a rise in spending on Public Goods- e.g. if there is a War- can be associated with lower Utility for everybody. An 'Arms Race' is an example of 'wasteful competition'. Threat points are about inflicting disutility.
Sen has an essay on 'The Political Economy of Targeting' (for Poverty Reduction). In practice this means buying votes. If we really want to reduce Poverty we have to raise productivity and eliminate 'nuisance goods'- including those which create threat points. Any other approach is likely to create disutility and thus to become incentive incompatible.
Sen says-
Poverty as Capability Deprivation
Either this means low productivity or it is meaningless. One can figure out ways of making any given person more productive. One can't say whether the person is being deprived of the opportunity to become the next Picasso.
In answering these questions, there is a case for raising a fairly foundational issue about the nature of poverty:
low productivity- anything else is meaningless
what is the shape of the beast we are trying to tackle with variable amounts of targeting?
If we are buying votes, the beast in question is a self-interested voter
The policy literature on poverty removal has been deeply concerned with the perspective of income deprivation. I would even argue that it has been obsessed by this one, undoubtedly important but partial, aspect of deprivation.
Income can be measured. Capability can't.
Here too we may need to take a more activity-oriented view of human beings. I have tried to argue elsewhere for seeing poverty as the failure of some basic capabilities to function–a person lacking the opportunity to achieve some minimally acceptable levels of these functionings.
But, every very elderly billionaire could complain that trillions of dollars are not being spent on keeping them fit and active! What's more, I have the capability of siring children on beautiful young women. Why is the Government not supplying me with any such people?
The functionings relevant to this analysis can vary from such elementary physical ones as being well nourished, being adequately clothed and sheltered, avoiding preventable morbidity, and so forth, to more complex social achievements such as taking part in the life of the community, being able to appear in public without shame, and so on.
These are the things which motivate us to overcome the disutility involved in working for a living. If such 'functionings' were guaranteed by the Government, nobody would go to work. The economy would collapse.
The opportunity of converting personal incomes into capabilities to function depends on a variety of personal circumstances (including age, gender, proneness to illness, disabilities, and so on)
No. This correlation, not causation. We may say 'most eighty year old people can't earn enough money working full time'. The we remember Biden and Kharge and so forth. It is precisely because we are prone to illness that we are careful of our health. There is a moral hazard in compensating people for avoidable misfortune.
and social surroundings (including epidemiological characteristics, physical and social environments, public services of health and education, and so on).
again, this is correlation, not causation. Some people figure out ways to thrive under adverse circumstances. They should become 'Tardean mimetic targets'- i.e. people imitate them in order to succeed.
If we insist on seeing poverty in the income space (rather than directly in terms of capability failure),
then we can figure out ways to raise productivity and hence income. This is 'incentive compatible' and sustainable. A Political Economy which consists of bribing voters will soon collapse or else the burden of financing it will fall increasingly on the working class.
the relevant concept of poverty has to be inadequacy (for generating minimally acceptable capabilities)
No. A rich person may be in very poor health and thus utterly miserable and unable to enjoy life. But this does not mean they are poor.
rather than lowness (independent of personal and social characteristics; the extensive implications of this distinction are discussed in Sen 1992).
There are no such implications. Misfortune is not Poverty.
Technically, this is “the inverse function” to that relating capabilities to incomes,
There is no mathematical function here. Capability is not related to Income. Productivity is.
but I shall not go into the formal representations here.
The thing is simply wrong. Its 'formal representation' is simply an ex falso quodlibet piece of nonsense.
The more general issue is that a concept of poverty that ignores the relevant variations in individual and social characteristics cannot do justice to our real concerns about poverty
Sen is not concerned with poverty. He is speaking of misfortune. But this can strike both Rich and Poor.
and deprivation, namely, inadequate capabilities.
We don't know what capabilities people have. We do know a thing or two about productivity.
It might be thought that to go beyond the low-income view of poverty must have the effect of making practical decisions much more complex than they already are.
Why make decisions? Why not just talk virtue-signaling bollocks?
Even though the primary argument for seeking a better idea of poverty is not simplicity but cogency, 1 do not believe it does, in fact, make the practical problems more difficult.
Raise productivity and you reduce poverty. Buy the votes of the poor, and- sooner or later- only the poor pay taxes. The rich have run away.
Indeed, in many ways, it does quite the contrary. The failure of some basic functionings (for example, having a disease or being illiterate) may be more directly observable
only if this impacts productivity. Otherwise it won't be known. A guy may not know he has a disease till he collapses at work and has to be sent home. One may not think of oneself as disadvantaged by reason of illiteracy, till you suddenly find you can't get a well-paid job because you can't read the application form.
than the actual income level of a person,
the reverse is the case. The actual income level of a person is of interest to the tax-man. The government already has good ways to estimate this.
so that the problem of informational distortions can be less acute.
How is the Government supposed to find out that a particular person is capable of being a great artist if the person isn't actually producing and selling art?
Arguments for income-based targeting have tended to rely, typically implicitly, on two assumed advantages: (1) measurement opportunities and (2) relevance. Neither ground is very secure.
They are secure enough.
Income estimates call for appropriate price and quantity data, and sometimes they are hard to get and easy to hide.
Not really. Government statisticians can look at a range of data to estimate the size of the black economy.
Certainly, it is by no means clear that it is easier to get a firm view of personal income than to observe morbidity, disability, undernourishment, or illiteracy.
Even G.Ps find it difficult to 'observe morbidity' which is why the have to send patients to specialists.
And as far as relevance is concerned, since income is at best one of the means to other ends, there is some lack of directness in concentrating on incomes, rather than on the valued functionings that income promotes (along with other means).
But Income can be taxed in one way or another. That is why it alone is relevant.
Not all functioning achievements or failures are, of course, easy to observe. But some of the more basic and elementary ones are more amenable to direct observation and frequently enough provide useful informational bases for antideprivation policies.
So if you see a guy being deprived of the ability to walk because he has been run over by a bus, you have a 'useful informational basis' for calling an ambulance so that the guy won't be deprived of life.
Governments need to raise productivity so as to expand the tax-base and have more money to play with. They may pretend they are 'anti-deprivation' but the fact remains that it is in their self-interest to get more tax revenue from a more productive population.
The informational bases for seeing the need for literacy campaigns, hospital service programs, and nutritional supplementation need not be particularly obscure.
That 'informational basis' is productivity. Nobody bothered with illiteracy when it didn't impact productivity. Capitalists set up hospitals because a healthier work-force was a more productive and profitable work-force.
To rely entirely on the income space would be, in such cases, quite counterproductive both on the grounds of relevance and that of observability.
Yet only Income is observable and relevant. We can virtue signal about how much we empathize with disabled lesbians of color but everybody knows we are hypocrites. The fact is disabled lesbians have a great sense of humor and plenty of friends. Meanwhile, Socioproctologists are shunned at parties. Sad.
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