Sen's Ethics and Economics

In his introduction to Amartya Sen 'On Ethics and Economics' Prof. Letiche writes

Sen demonstrates that there has occurred a serious distancing between economics and ethics which has brought about one of the major deficiencies of contemporary economic theory.

Economics has developed a lot because there have been big changes in technology and productivity. Ethics has stagnated. We don't need stupid people to lecture us about what is right or wrong. We do need smart people to figure out how to economise on the use of scarce resources by using the latest technology and making complex calculations.  

As he persuasively argues. since the actual behaviour of human beings is affected by ethical considerations,

Actual human beings going about their business know more about ethics than stupid people who teach worthless shite.  

and influencing human conduct is a central aspect of ethics, welfare -economic considerations

which are incorporated into the theory of Public Finance and hence which are taken into account in Fiscal Policy- i.e. taxes and government spending 

must be allowed to have some impact on actual behaviour and, accordingly, must be relevant for modern logistic economics.

Sen didn't teach Public Finance. He didn't understand that budgets matter, Plans don't.  

But while logistic economics has had an .influence on welfare economics, Sen points out that welfare economics has had virtually no influence on logistic economics.

Nonsense! The theory of externalities and the 'second best' and 'mechanism design' etc. all came out of welfare econ. General equilibrium was supposed to help Governments improve forecasting for fiscal policy. Moreover, the notions of 'repugnancy markets' and 'wasteful competition' and 'competition policy' all arose out of Public Finance theory because these were problems that Governments needed to respond to. 

Governments are interested in the welfare of the whole economy. Governments employ smart people who are good at calculation to improve Fiscal Policy and thus improve welfare. Sen, fool that he is, thought Welfare Econ was about bleeding hearts saying 'let us be nice to poor people'. 

He shows that both the ethics-related origins and the logistic-based origins of economics have cogency of their own.

Governments need to improve welfare or there will be exit of skilled labour, enterprise and capital.  

The logistic approach of modern economics, he emphasizes, has often been extremely productive, providing better understanding of the nature of social interdependence

which everybody already knows about.  

and illuminating practical problems

which practical people already know about 

precisely because of extensive use of the logistic approach.

No. The extensive use of quantitative methods has been helpful. Logistic approaches are useless and confined to the class-room. But pedants don't matter. Smart people economising on the use of scarce resources gain power and influence or wealth if they work in the private sector.  

The development of formal 'general equilibrium theory' is a case in point,

By the early Seventies it had become obvious that the thing was 'anything goes'. It was useless. Still econometric models of the economy could be useful.  

and Sen illustrates its application to critical problems of hunger and famine.

It has zero relevance. The correct approach was the one taken by Binoy Ranjan Sen as head of the F.A.O. The solution is to bring lots of food very quickly to places where there was a food availability deficit. Longer term, agricultural productivity had to be boosted using modern technology. This is a 'supply side' problem. Still, I suppose you could say that raising incentives for farmers has a virtuous circle effect on the entire economy. But you don't need complicated math to make the point.  

Sen says he has done 'a causal analysis of the tragically real problems of hunger and famine in the modern world.'

This is false. He has written crazy nonsense. 

'The fact that famines can be caused even in situations of high and increasing availability of food 

is not a fact. If food is available to people, there can't be a famine. 

can be better understood by bringing in patterns of interdependence which general equilibrium theory has emphasized and focused on.

Nonsense! If the food available increases faster than the demand for it, its price falls. People eat more. It is a different matter that farmers may stop growing food and switch to 'cash crops' or that it becomes too expensive to transport it to the market, but that means food availability declines. 

 In particular, it turns out that famines often have little to do with food supply, 

Availability may decrease because of war or banditry or corruption.

and instead have causal antecedents elsewhere in the economy, related through general economic interdependence

War, banditry and corruption are political, not economic, in nature. 

The foundation of Sen's arguments rests, however, in the view that economics, as it has emerged, can be made more productive by paying greater and more explicit attention to the ethical considerations that shape human behaviour and judgment.

Has this actually happened? No. Sen-tentious shite was a waste of time. Econ can be productive if those with power employ smart economists and listen to their policy advise. But countries can rise rapidly even if they have no economists. They simply imitate what more successful countries have done and are doing. 

With illuminating brevity, he analyses certain departures from standard behavioural assumptions of economic theory that may arise from distinct ethical considerations.

No he doesn't. India failed to develop when he and his ilk wielded power in the Planning Commission. This was because Sen-tentious cretins thought it was unethical for Indians to have nice food and nice clothes and colour TVs and phones. Everybody should starve quietly while America refilled India's begging bowl.  

They may arise from intrinsic evaluations and from instrumental ones, either individually or from the group.

Jews are greedy money-grubbers. We must kill Jews and put an end to money-grubbing. True this will mean economic collapse but maybe if we invade Poland and then Russia, we will still have plenty of food and lots of slaves. 

There is always an ethical reason to do stupid, evil, shit. But it isn't good business. It is bad economics.  

Sen draws attention to the various causes from which they may arise,

bigotry, stupidity, being a Bengali buddhijivi, teaching worthless shite etc. 

causes that give credence to the instrumental role of contemporary social behaviour.

Behaviour is 'instrumental'. What an amazing discovery! The cat rubs against your feet because it is hungry and wants you to feed it. Only if you get a PhD in Sen-tentious shite will you understand this.  

Such behaviour may go against each person's apparently dominant strategy, but group-rationality conditions of a specified type often influence actual behaviour without involving any defect in people's knowledge.

Sen and his ilk were quick enough to make money for themselves or even to run off with their best friend's wife if this was to their advantage. Yet their group behaviour involved demanding India become poorer and weaker by pursuing foolish economic policies.  

In consequence, Sen discusses the ways in which welfare economics can be enriched by paying more attention to ethics;

Instead of teaching students how to do Cost Benefit analysis- which is a skill even the private sector can find valuable- teach then nonsense about 'capabilities' and 'functionings' and how more attention should be paid to impartial spectators from other galaxies.  

how descriptive economics, prognosis, and policy can be improved by making more room for welfare economics in the determination of individual and group behaviour;

the HR Department must encourage everybody to have gender reassignment surgery at least once a week. 

and how the study of ethics can, in turn, benefit from a closer contact with economics.

Professors of ethics must have closer contact with the buttocks of flatulent economists.  

Understandably, though Sen is critical of economics as it stands, he does not think that the problems raised have been adequately dealt with in the ethical literature.

But that literature is stupid shit.  

Therefore, it is not a problem of merely incorporating the lessons from the ethical literature into economics.

there are no lessons. There is mere stupidity.  

Indeed, he suggests that some of the ethical considerations can be helpfully analysed further by using various approaches and procedures now utilized in economics.

Theoretical econ of an utterly useless type- sure.  

Illustrating this argument by the modern literature on rights and consequences, he notes that if rights are considered not only as primarily legal entities with instrumental use but rather as having intrinsic value, the literature can be much improved.

Thus having the right to levitate is intrinsically valuable even though there is no remedy to its violation. Yet, because of neo-liberalism, Governments are refusing to pass 'right to levitate' laws probably because they are in the pay of the aircraft industry.  

Furthermore, he sets forth systematic suggestions as to how an adequate formulation of rights and of freedom can make substantial use of consequential reasoning of the type standardly used in general interdependence economics.

Rights and freedoms are Hofheldian incidents. They are only effective if there is an obligation holder who has an adequate incentive to supply the remedy. If this is not the case there is entitlement collapse. Some may be able to enforce their rights but most will be shit out of luck. This is what 'Law & Econ' is about. Sen is wholly ignorant of the Coasian tradition. 

hi one of his most original discussions, Sen indicates that while the richness of the modern literature of ethics is

the great wealth represented by a pile of horse-shit 

much greater than has been accommodated in economics,

many economists continue to have dicks even though dicks cause RAPE! 

the extremely narrow assumption of self-interested behaviour in economics has impeded the analysis of very significant relationships.

Like the one Sen's best friend had with his wife. 

Mainstream economic theory, however, identifies rationality of human behaviour with internal consistency of choice

only if ceteris paribus holds

and, further, with maximization of self-interest,

provided there is no Knightian uncertainty. However, the self may be interested in altruistic actions or in preventing other people from enjoying themselves. Sen is on the side of the kill-joys.  

But, as Sen notes, there is neither evidence for the claim that self-interest maximization provides the best approximation to actual human behaviour

an axiom is not a claim. It is merely an assumption which permits the derivation of theorems.  

nor that it leads necessarily to optimum economic conditions.

There is no evidence that academic Econ isn't a waste of fucking time.  

He refers to free market economies, such as Japan, in which systematic departure from self-interested behaviour in the direction of rule-based behaviour

because of heavy social sanctions for breaking the rules 

— duty, loyalty and good will — has been extremely important for the achievement of individual and group economic efficiency.

Nonsense! Economic efficiency was achieved by going for export lead growth. 

An accurate interpretation of Adam Smith,

shows he was shit at Econ though he wrote well. This is because he wasn't a businessman or a speculator like Ricardo. He was merely a pedant.  

he demonstrates, does not lend support to believers in, and advocates of, a narrow interpretation of self-interested behaviour either in ethics or in economics.

They don't need his support. They merely quote his line about how the baker has a profit motive for baking good bread.  But Mandeville's fable of the bees made the point better. 

Technically, as Sen demonstrates, under a scheme of extremely limited conditions, welfare economics admits of circumstances in which acting entirely according to selfinterest could be ethically justified.

Anything at all can be ethically justified. Ethics is shit.  

But the practical significance of this theorizing is highly questionable

More particularly if the theorists are senile shitheads.  

Therefore he identifies the limitations of the 'wellfarist' concepts on which, inter alia the analysis is based.

Why bother? Why not simply say that Academic Econ is a waste of time? 

By distinguishing between the 'well-being aspect' which covers a person's achievements and opportunities

which are not related to well-being. A miserable bastard may achieve a lot or have many opportunities. Then a doctor cures him of his stomach ulcer and suddenly he experiences true well-being. 

in the Context of the individual's personal advantage from the 'agency aspect' which examines them in terms of broader objectives,

If you bake yourself a cake, do you find it more tasty than if you bought one prepared by an expert confectioner? Maybe. But maybe not. What matters is whether you get utility or disutility from baking.  

the analysis goes beyond the pursuit of one's own well being, with productive results.

Sen pursued the well-being of his best friend's wife with his dick. That was very productive- for him. His best friend, however, became sad.  

Sen distinguishes between elements of distributive justice and more extensive valuations of the individual or group.

Any one can make 'extensive valuations' by saying 'that guy is smelly and his Mummy doesn't love him' or 'people of such and such nationality are smelly. God hates them.' 

This leads to a discussion on 'plurality and evaluation'; 'commensurability'; 'completeness and consistency'; 'impossibility theorems', as well as positive possibility results and constructive characterization.

All of which are useless. Public finance does matter. If the Government uses tax money wisely then the economy grows and there is more tax money which too can be spent wisely. Welfare Econ is about helping Governments in this way. Sen-tentious virtue signallers thought Welfare Econ was about telling stupid lies about how inequality has soared and billions of people in Thatcher's Britain were facing starvation.  

In apptying the recent philosophical literature on consequentialism to economics,

Econ is about consequences, nothing else. 

Sen shows how this reasoning - including interdependence and instrumental accounting - can be combined not only with intrinsic valuation

i.e. bigoted ipse dixit assertions 

but also with position-relativity and agent-sensitivity of moral assessment,

i.e. telling stupid lies and saying all those who disagree with you are Nazi swine.  

In effect. he shows that under realistic conditions, a broad consequential approach can provide a sensitive as well as robust structure for prescriptive thinking on such fundamental issues as rights and freedom.

D'uh! The problem is that Sen-tentious cretins think bad consequences- e.g. reducing inequality so everybody starves- are actually highly desirable outcomes.  

Sen demonstrates that departures from standard behavioural assumptions of economic theory

like Nazism, Stalinism and the stupidity of the Bengali buddhijivi who thinks the cake should be divided in such a way, before it is baked, that nobody in their right mind would take up baking.  

- incorporating the most important components of self-centered behaviour - may arise from both intrinsic valuations

e.g. Jews are money grubbers. Lets kill them so as to get rid of money grubbing. After that we can invade Russia. Surely, the rooskies will welcome the chance to become our slaves.  

and instrumental ones,

i.e. sensible ones- like getting up and going to work so as to get paid and thus able to live decently. 

either individually or for the group. This is relevant and applicable to standard economic cases of failure of efficiency, arising from such factors as externalities, non market interdependences, and lack of credibility in government economic policy.

i.e. saying you will do things when you clearly lack the resources to do those things. Budgets matter. If they are not credible, there will be 'Ricardian equivalence' or 'crowding out'. 

Sen suggests that the incentive problems in tackling such issues may have to be reformulated if departures from self- interested behaviour are to be admitted into economic analysis.

This happened long before he was born. 'Pigouvian taxes' existed before Pigou existed.  

He maintains that what a person, or group, can be seen as maximizing is a relative matter,

you can see people as trying to maximize the amount of dog shit they devour. 

depending on what appears to be the appropriate control variables and what variations are seen as a right or correct means of control exercised by the agent or group.

The appropriate control variable is the growls of invisible wolves. This deters most people from devouring dog poo.  

There may arise a genuine ambiguity when the instrumental value of certain social rules are accepted for the general pursuit of individual goals,

This is because the instrumental value of certain social rules may lie in the fact that they are invisible dog turds, which however are sexually ambiguous, which Sen devours 

Reciprocity in such circumstances must be taken to be instrumentally important, for otherwise it is difficult to argue that one's 'real goals' are to follow reciprocity rather than one's actual goals.

No it isn't. Just say there is utility in 'reputational effects'- e.g. being known as a guy who fucks up anybody who tries to fuck with him.  

By emphasizing that norms and behaviour should become more closely integrated in economic theory,

so as to render it utterly useless 

and in providing systematic means of doing so, Sen points the way to further analysis of more specific, alternative welfare criteria.

e.g. telling your Professor he eats invisible dog poo. Indeed only if everything is seen as, instrumentally speaking, the devouring of sexually ambiguous dog poo, can we successfully merge ethics into the framework of welfare economics.  

Turning to Sen's views on Adam Smith, it may be helpful for non-Christians to clarify that 'the invisible hand' was a reference to the 'mysterious economy' of the 'katechon' (i.e. that which holds the Eschaton, the end of days, at bay). Catholic thinkers had an elaborate theory of how various innate predilections we have can be brought into harmony. 'Synderesis' or conscience could guide us so as to promote good civic life. Obviously, if you made a lot of money, you should hand it over to the Church so as to get a ticket to Paradise. Sadly, some people were sceptical of this claim. War followed. Since Wars cost money, Fiscal policy based on 'Political Arithmetic'- i.e. what we would call Public Finance- had to be improved. That's when econ started to take off as a discipline. 

Adam Smith and Self-interest In his enjoyable essay on 'Smith's Travel on the Ship of the State', George Stigler begins with interpreting Smith's remark that 'although the principles of common prudence do not always govern the conduct of every individual, they always influence that of the majority of every class or order'. as implying: 'self-interest dominates the majority of men',

Moreover, by 'the law of large numbers' or Condorcet's jury theorem, bigger populations were more predictable and amenable to actuarial analysis.  

In fact, it is not accurate to identify 'prudence' with 'self-interest.

No. Prudence preserved 'conatus'. It is self-interested to preserve the self by being prudent. Don't forget, prudence means seizing opportunities rather than failing to do so in the hope something better might be offered.  

As Smith explains in The Theory of Moral Sentiments, prudence is 'the union of' the two qualities of 'reason and understanding', on the one hand, and 'selfcommand' on the other .

In other words, the prudent chap acts on the basis of his understanding of the situation. He doesn't sit idly by while opportunities go a begging.  

The notion of 'self-command', which Smith took from the Stoics,

Christianity took it from the Stoics. Smith grew up in a Christian society.  

is not in any sense identical with 'self-interest' or what Smith called 'self-love'.

It is identical with it absent some 'akrasia' or 'accidie' or weakness of the will or plain laziness.  Smith was against Stoic 'self-command'- e.g. undergoing torture without shrieking and shitting oneself copiously- because it was the characteristic of the savage, not the French fop. Smith observes that in more civilized countries- e.g. France and Italy- a nobleman would scream hysterically and roll around on the floor if denied some office of profit or if fined a couple of shillings by a magistrate. Meanwhile the Scots were sticking dirks into each other and grinning to hide their pain. 

Indeed, the Stoic roots of Smith's understanding of 'moral sentiments' also make it clear why both sympathy and self-discipline played such an important part in Smith's conception of good behaviour.

Nonsense! Smith was saying to his fellow Scots that they needed to forget their warrior code and become polite and affable and good at making money.  

As Smith himself puts it, 'man, according to the Stoics, ought to regard himself, not as something separated and detached, but as a citizen of the world, a member of the vast commonwealth of nature',

But this 'oikeiosis' must start with the family and the community and the father land. Should it extend to the entire Universe? No. Don't be silly. First try to catch up with England economically. Fuck the Stoics. Most ended up as slaves. Cicero's point was that you could learn something from them but not everything. True, if you happen to have the predisposition of a Stoic sage you may indeed wander about the world showing great love and sympathy to plants and rocks and clouds. But, if you are Scottish, concentrate on catching up with the English. That's what is important.  

Consider the following passage from 'Moral Sentiments'- 

'Among the moralists who endeavour to correct the natural inequality of our passive feelings by diminishing our sensibility to what peculiarly concerns ourselves, we may count all the ancient sects of philosophers, but particularly the ancient Stoics. Man, according to the Stoics, ought to regard himself, not as something separated and detached, but as a citizen of the world, a member of the vast commonwealth of nature. To the interest of this great community, he ought at all times to be willing that his own little interest should be sacrificed.'

Sen thinks this is Smith's own view. It isn't. He knew his Cicero. It may happen that you are predestined to be a Stoic sage in which case this is how you will behave. But it is unlikely that such is the case. So, don't be silly. Concentrate on rising up and raising up your family and community and country. The Universe can look after itself. 

'Whatever concerns himself, ought to affect him no more than whatever concerns any other equally important part of this immense system. We should view ourselves, not in the light in which our own selfish passions are apt to place us, but in the light in which any other citizen of the world would view us. What befalls ourselves we should regard as what befalls our neighbour, or, what comes to the same thing, as our neighbour regards what befalls us. 'When our neighbour,' says Epictetus, 'loses his wife, or his son, there is nobody who is not sensible that this is a human calamity, a natural event altogether according to the ordinary course of things; but, when the same thing happens to ourselves, then we cry out, as if we had suffered the most dreadful misfortune. We ought, however, to remember how we were affected when this accident happened to another, and such as we were in his case, such ought we to be in our own.''

Fuck Epictetus. Them Greeks got conquered and enslaved by the Romans. 

'Those private misfortunes, for which our feelings are apt to go beyond the bounds of propriety, are of two different kinds. They are either such as affect us only indirectly, by affecting, in the first place, some other persons who are particularly dear to us; such as our parents, our children, our brothers and sisters, our intimate friends; or they are such as affect ourselves immediately and directly, either in our body, in our fortune, or in our reputation; such as pain, sickness, approaching death, poverty, disgrace, etc.'

All Smith is saying here is that some traditional ways of expressing emotion- e.g. sticking a dirk into your neighbour- aren't the done thing in polite society. 

'In misfortunes of the first kind, our emotions may, no doubt, go very much beyond what exact propriety will admit of; but they may likewise fall short of it, and they frequently do so. The man who should feel no more for the death or distress of his own father, or son, than for those of any other man's father or son, would appear neither a good son nor a good father. Such unnatural indifference, far from exciting our applause, would incur our highest disapprobation.'

In other words, don't show your Stoic character by chopping off the head of your dead mother and making a point of drinking whiskey from her skull. No doubt, your pals may consider this a doughty deed but the English will express shock at the barbarous customs of those north of the border. 

'If those domestic affections, however, some are most apt to offend by their excess, and others by their defect. Nature, for the wisest purposes, has rendered, in most men, perhaps in all men, parental tenderness a much stronger affection than filial piety. The continuance and propagation of the species depend altogether upon the former, and not upon the latter. In ordinary cases, the existence and preservation of the child depend altogether upon the care of the parents. Those of the parents seldom depend upon that of the child. Nature, therefore, has rendered the former affection so strong, that it generally requires not to be excited, but to be moderated; and moralists seldom endeavour to teach us how to indulge, but generally how to restrain our fondness, our excessive attachment, the unjust preference which we are disposed to give to our own children above those of other people. They exhort us, on the contrary, to an affectionate attention to our parents, and to make a proper return to them, in their old age, for the kindness which they had shown to us in our infancy and youth.'

Apparently Scottish folk weren't too keen on their Mummies and Daddies. Most other people love them to bits. 

 'In the Decalogue we are commanded to honour our fathers and mothers. No mention is made of the love of our children. Nature had sufficiently prepared us for the performance of this latter duty. Men are seldom accused of affecting to be fonder of their children than they really are. They have sometimes been suspected of displaying their piety to their parents with too much ostentation. The ostentatious sorrow of widows has, for a like reason, been suspected of insincerity. We should respect, could we believe it sincere, even the excess of such kind affections; and though we might not perfectly approve, we should not severely condemn it. That it appears praise-worthy, at least in the eyes of those who affect it, the very affectation is a proof'.

I suppose things were different in eighteenth century Scotland. Nowadays most people genuinely love Mummy and Daddy and hubby. They don't think they are secretly exulting over inheriting their wealth. 

Even though prudence goes well beyond self-interest maximization, Smith saw it in general only as being 'of all virtues that which is most helpful to the individual', whereas 'humanity, justice, generosity, and public spirit, are the qualities most useful to others' .

Which is why you should concentrate on doing stuff helpful to you though everybody else keeps suggesting you go give beejays to hobos so as to make the Universe happy.  

It is instructive to examine how it is that Smith's championing of 'sympathy', in addition to 'prudence' (including 'self-command'), has tended to be so lost in the writings of many economists championing the so-called 'Smithian' position on self-interest and its achievements.

He is saying pretend to show sympathy like the French and the I-talian courtiers because that is recognized as polite behaviour. To laugh heartily at somebody who has broken his head is not in keeping with propriety. Pretending to care about people may lead them to develop a liking for you. They might put a nice piece of business your way.  

It is certainly true that Smith saw, as indeed anybody would, that many of our actions are, in fact, guided by self-interest, and some of them do indeed produce good results. One of the passages of Adam Smith that has been quoted again and again by the latter-day Smith inns is the following; 'It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages' (Smith, 1776, pp. 26-7). While many admirers of Smith do not seem to have gone beyond this hit about the butcher and the brewer, a reading of even this passage would indicate that what Smith is doing here is to specify why and how normal transactions in the market are carried out, and why and how division of tabour works, which is the subject of the chapter in which the quoted passage occurs. But the fact that Smith noted that mutually advantageous trades are very common does not indicate at all that he thought self-love alone, or indeed prudence broadly construed, could be adequate for a good society.

No. He thought that prudence would dictate collective action of various types.  

Indeed, he maintained precisely the opposite. He did  not rest economic salvation on some unique motivation.

Like other Scottish philosophers he rested it on 'common sense'.  

In fact, Smith chastised Epicurus for trying to see virtue entirely in terms of prudence,

Smith says that bodily pleasure and pain were all that mattered for Epicurus. However, mental pleasure and pain- for example your fear that others might think little of you- too had to be accounted for.  Prudence, though exercised towards this end, was not itself a pleasure. Indeed, virtue should not be pursued for its own sake. Smith pointed out that actually being virtuous will get you the pleasure of being thought virtuous and thus virtue was worth pursuing for its own sake because that is the only way to actually get the thing. Otherwise you will be constantly worried that your counterfeit virtue will be detected and you will become the object of opprobrium.  

and Smith seized the occasion to rap 'philosophers' on their knuckles for trying to reduce everything to some one virtue; 'By running up all the different virtues too to this one species of propriety, Epicurus indulged in a propensity which is natural to all men, but which philosophers in particular are apt to cultivate with a peculiar fondness. as the great means of displaying their ingenuity, the propensity to account for all appearances from as few principles as possible.' 

As a matter of common sense, philosophers be kray kray.  Make money, be polite, and try to overtake them snobbish English bastids. 

It is a matter of some irony, that this 'peculiar fondness' would be attributed to Smith himself by his overenthusiastic admirers in making him the 'guru' of self-interest (contrary to what he actually said . 

Had Epictetus not tried to reduce everything to one principle, he would have been forgotten by his own contemporaries.  

Smith's attitude to 'self-love' has something in common with that of Edgeworth, who thought that 'economical calculus' as opposed to ethical evaluation, was particularly relevant to two specific activities, to wit, 'war and contract'.

The Edgeworth contract curve is what we now call the 'core' of the game.  

The reference to contract is of course precisely similar to Smith's reference to trade, because trade takes  place on the basis of mutually advantageous (explicit or implicit) contracts.

While wars break out when one side or the other doesn't have a good enough 'threat point'. That was Edgeworth's point. Utility is like disutility.  

But there are many other activities inside economics and outside it in which the simple pursuit of self-interest is not the great redeemer, and Smith did not assign a generally superior role to the pursuit of selfinterest in any of his writings.

Because he was self-interested and wanted to be well thought off.  

The defence of selfinterested behaviour comes in specific contexts, particularly related to various contemporary bureaucratic barriers and other restrictions to economic transactions which made trade difficult and hampered production. 

No. Smith is saying that we need to act jointly against self-interested brigands, bureaucrats or monopolists of various descriptions. 

One specific field in which Smith's economic analysis has been widely misinterpreted with grave consequences is that of famine and starvation.

Nonsense! Smith was sensible enough- though no expert. Still, he was aware that the famine of the 1790s had lead to the Act of Union. Parts of Scotland remained famine prone and became evident during the potato famine of the 1840s.  

This issue relates to the place of the profit motive only indirectly. Smith did argue that though traders are often blamed for causing famines, they do not in fact cause them, and famines usually follow from what he called 'a real scarcity' (Smith, 1776, p. 526). He was opposed to suppressing or restricting trade. But this did not imply that he was against public support for the poor.

Nor was he for it if that would impose a big burden on rate-payers. Also, Gaelic speaking Catholics or Jacobites were welcome to just fuck off and die already.  

Indeed unlike Malthus, Smith was not opposed to Poor Laws,

Malthus was against 'Speenhamland' type indirect subsidies to big farmers which imposed a burden on other rate-payers. 

though he did criticize it for the harshness and counterproductive nature of some of the restrictive rules affecting the beneficiaries (pp. 152-4), Furthermore, in the Wealth of Nations, Smith did also discuss the possibility of famines arising from an economic process involving the market mechanism, without being caused by 'a real scarcity' generated by a decline in food output as such. 

Availability is what matters. It is obvious that if the harvest is shipped abroad, the locals will starve.  

'But it would be otherwise in a country where the funds destined for the maintenance of labour were sensibly decaying.

i.e. food availability would be decreasing 

Every year the demand for servants and labourers would, in all the different classes of employments, be less than it had the year before. Many who had been bred in the superior classes, not being able to find employment in their own business, would be glad to seek it in the lowest.

They would emigrate. 

The lowest class being not only overstocked with its own workmen, but with the overflowings of all the other classes, the competition for employment would be so great in it, as to reduce the wages of labour to the most miserable and scanty subsistence of the labourer.

Because food availability had decreased. 

Many would not be able to find employment even upon these hard terms, but would either starve, or be driven to seek a subsistence either by begging, or by the perpetration perhaps of the greatest enormities. Want, famine, arid mortality would immediately prevail in that class, and from then on extend themselves to all the superior classes. (Smith 1776. pp. 90-1)

For Scotland, the solution was emigration.  

In this analysis, people are led to starvation and famine through a process over which they themselves have little control.

Unless they emigrated or refrained from having babies. It takes two poor people to bring a child destined to be poor into the world.  

While Smith was often cited by imperial administrators for justification of refusing to intervene an famines in such diverse places as Ireland, India and China,

Nonsense! What was cited was that the thing would cost money- lots of it.  

there is nothing to indicate that Smith's ethical approach to pubic policy would have precluded intervention in support of the entitlements of the poor.

The entitlements of the poor are created by two poor people having babies themselves destined to be poor.  

Even though he would have certainly been opposed to the suppression of trade, his pointer to unemployment and to real wages as causes of starvation suggests a variety of public policy responses. 

Which cost money. Where is the money to come from? Sen doesn't know. The Government has a magic money tree- right?  

It can be argued that a person's failure to acquire enough food can be either due to 'pull failure' (e.g arising from a fall in income related to becoming unemployed or a decline in real wages)

not to the fact that the person's parents were poor or that he is simply not productive 

or due to . response failure' (e.g. the traders manipulate the market in such a way that the demand is not properly met and instead a lot of profits are made by cornering the market).

Sen is talking of a cartel or a monopolist. But it is easy to break the cartel by bringing in food or to punish 'hoarders'  

It is clear from Smith's analysis of famines that he did not dispute the possibility of starvation arising from 'pull failure', but he did reject the plausibility of 'response failure'. It is, thus, arguable that the real 'Smithian' message regarding anti-famine policy is

the thing costs money. If the State is bankrupt, people will starve unless private charity steps in 

not non-a-ction, but creation of entitlements of victim groups through

shaking the magic money tree 

supplementary income generation, leaving the market to respond to the demand resulting from the generated incomes of the would-be victim groups.

But, if the State becomes bankrupt, that 'supplementary income generation' will collapse.  

This analysis has a good deal of bearing on policy debates that are taking place now, and suggests a more production-oriented policy (not just of food but also of other commodities that could be exchanged for food) rather than pure relief. As far as short-run relief is concerned, it suggests the case for greater reliance on cash relief at the place of normal work and living. combined with adding to food supply in the market, rather than the state trying to deal with the logistic problem of getting both the victims and the food to hastily constructed relief camps.

All this requires 'State Capacity' and lots of money in the bank. Sen thinks the economist's job is to tell Governments how to spend money they don't have. 

In judging the merits and demerits of these various policy alternatives, Smith's analysis remains relevant and important.

Because though Smith didn't say 'feed the poor', Sen thinks this is what he said and this is very important because if only everybody in Bengal had said 'feed the poor!' two big famines during his own lifetime would have been averted. This is because saying 'feed the poor!' causes the poor to be fed provided you mention General Equilibrium and Adam Smith.  

The misinterpretation of Smith's complex attitude to motivation and markets, and the neglect of his ethical . analysis of sentiments and behaviour, fits well into the distancing of economics from ethics that has occurred with the development of modern economics.

Smith was a well known champion of Gay rights and the mandatory provision of instruction in Sodomy for Senior Citizens. Modern economics pretends that when Smith said to Hume 'I need to pee' what he really meant was that the Reimann hypothesis says that poor people should have subsidized gender reassignment surgery conducted by Patagonian penguins.  

Smith did, in fact. make pioneering contributions in analysing the nature of mutually advantageous exchanges, and the value of division of labour,

No. He wrote well enough but these ideas had been around for a long time. The division of labour had been elucidated by Sir William Petty who explained the superior efficiency of Dutch ship-yards in this fashion.  

and since these contributions are perfectly consistent with human behaviour sans bonhomie and ethics, references to these parts of Smith's work have been profuse and exuberant.

Because they are sensible. Smith took his example of the pin workshop from a Frenchman who wrote on the subject.  

Other parts of Smith's writings on economics and society, dealing with observations of misery,

which involved looking out of your window at the shivering beggars on the street 

the need for sympathy,

Smith says it is innate. There is no special need for it any more than there is a need for farts.  

and the role of ethical considerations in human behaviour, particularly the use of behaviour norms,

try to act more like the polite upper class of France and Italy. Don't stick dirks into each other or raise your kilt and display your dangly bits to the Dowager Duchess of Dundee.  

have become relatively neglected as these considerations have themselves become unfashionable in economics.

They are useless. What Econ should have incorporated was 'mimetic effects'- i.e. imitating superiors.  

The support that believers in and advocates of, selfinterested behaviour have sought in Adam Smith is in fact, hard to find on a wider and less biased reading of Smith.

by a Bengali monkey who didn't get that Kant and Smith and Hume thought brown folk were savages.  

The professor of moral philosophy and the pioneer economist did not, in fact, lead a life of spectacular schizophrenia.

He wrote well expressing ideas current at the time.  

Indeed, it is precisely the narrowing of the broad Smithian view of human beings, in modern economies, that can he seen as one of the major deficiencies of contemporary economic theory.

Economic theory is shit because only stupid people go in for it. If you are smart, you become a billionaire like Purnendu Chatterjee not a Professor like Kaushik Basu.  

This impoverishment is closely related to the distancing of economics from ethics,

Some Econ PhDs can earn good money working for Jeff Bezos and his ilk. Stupid Econ PhDs have to migrate to Moral Philosophy or Grievance Studies.  

Economic Judgements and Moral Philosophy The position of welfare economics in modern economic theory has been a rather precarious one.

Nonsense! As Government spending became a larger and larger proportion of GDP, more and more Public Finance and Welfare Econ was done. The Marginalist revolution put it on a secure footing. Pigou and Samuelson built upon Marshallian foundations such that Welfare Econ was seamlessly integrated into Micro-Econ.  

In classical political economy there were no sharp boundaries drawn between welfare economic analysis and other types of economic investigation.

Because classical political econ was shit.  

But as the suspicion of the use of ethics in economics has grown, welfare economics has appeared to be increasingly dubious,

No. Welfare Econ became 'dubious' when it resorted to telling stupid lies- e.g. poverty had increased when everybody could see it had fallen.  

It has been put into an arbitrarily narrow box, separated from the rest of economics.

Sen may have put himself into a play-pen or pig-sty but the Coase-Posner tradition is going strong.  

Contact with the outside world has been mainly in the form of a one-way relationship by which fondings of predictive economics are allowed to influence welfare economic analysis, but welfare economic ideas are not allowed to influence predictive economics,

For the same reason that ideas about Social Justice are not allowed to influence Weather forecasting.  

since actual human action is taken to be based on self-interest only, without any impact of ethical considerations or of welfareeconomic judgements.

Predictive econ is about actually predicting stuff. It is unjust that rain should fall on poor people while avoiding the territory of wealthy oil-Sheikhs. Still, if you are paid to forecast where rain will fall, you must ignore such injustice.  

For example, ideas about the response of labour to wage incentives arc brought into welfare-economic analysis of, say, wages policy or optimum taxation, but welfare-economic ideas are not permitted to affect the behaviour of workers and thus influence the incentive problem itself.

Workers are refusing to read Sen & Nussbaum. If they did their behaviour would become very lewd indeed. 

Welfare economics has been something like an economic equivalent of the 'black hole' - things can get into it, but nothing can escape from it.

i.e. Sen can't say anything sensible even if he goes on reading Smith and Jones.  

 Interpersonal Comparisons of Utility The standard propositions of modern welfare economics depend on combining self-seeking behaviour, on the one hand,

Utility can be derived from helping others or, as in Sen's case, flinging your faeces at them. 

and judging social achievement by some utility-based criterion on the other,

no such judging occurs. It is assumed that people gain utility or avoid disutility by doing whatever it they are choosing to do.  

In fact, the traditional welfare economic criterion used to be the simple utilitarian one judging success by the size of the sum total of utility created — nothing else being taken to be of intrinsic value.

But no measurements of utility were made. Obviously, money was a good enough proxy. Did people exchange leisure for money or use money to buy stuff they liked? In the main, yes.  

As ethical analysis goes, this is pretty straight and narrow, but that side of the story was narrowed even further, as interpersonal comparisons of utility came under fire in the 1930s, led by Lionel Robbins .

Robbins comment came out in 1938, the same year as Samuelson's revealed preference theory.  

For reasons that are not altogether clear, interpersonal utility comparisons were then diagnosed as being themselves 'normative' or 'ethical'.

They were arbitrary and unmeasurable. We can only get empirical evidence of the price and quantity consumed and thus infer a marginal rate of substitution. We can't numerically measure utility. 

It is, of course, possible to argue that interpersonal comparisons of utility make no sense and are indeed totally meaningless — a position I find hard to defend,

I claim that I enjoy having money more than you and thus grab your wallet. You call the police who arrest me. You tell me that you enjoy thinking of me being sodomized in jail more than I enjoy not being sodomized.  

but certainly have no difficulty in.

The utilitarian faced the problem of the Hitlerite saying 'Jews don't really enjoy being alive as much we enjoy robbing and killing them.' This was because utilitarians look a bit Jewy or, at the very least, come across as mathsy and good with numbers.  

The popularity of that view is perhaps traceable to the powerful endorsement of that position by Lionel Robbins (1935, 1938), in particular passages, such as the following: 'The theory of exchange does not assume that, at any point, it is necessary to compare the satisfaction which we get from the spending of 6d. on bread with the satisfaction which the Baker gets by receiving it. That comparison is a comparison of an entirely different nature. . . It involves an element of conventional valuation. Hence it is essentially normative' (pp. 138-9).

Robbins wasn't particularly bright. Few people who teach economics are. The fact is, if Bakers are dissatisfied with the monetary reward for baking an extra batch of bread, then, at the margin, that bread won't be produced. If the price of bread is fixed by the Government, this means the market does not clear. Some people are left clutching their six pence rather than returning home with a nice loaf of bread.  

It is, however, arguable that Robbins was really more concerned with establishing the negative proposition that interpersonal comparisons cannot be made 'scientifically' than with asserting the positive claim that such comparisons are 'normative' or 'ethical'.

Only in the sense that statements like 'Tom is cool' or 'Jill is sexy' are normative. Some standard of coolness or sexiness is being appealed to, but that standard is not objectively verifiable in the same way that height or weight are verifiable. 

 If that position were accepted. then the statement that person A is happier that B would be nonsensical - ethical nonsense just as much as it would be descriptive nonsense.

It is neither. We can't measure happiness objectively. This doesn't mean we disbelieve in its existence. 

I guess it is a reflection of the way ethics tends to be viewed by, economists that statements suspected of being 'meaningless' or 'nonsensical' are promptly taken to he 'ethical'.

No. Ethical statements are taken to be imperative moral judgments with some prescriptive force. 'Jill is sexy' is not ethical. It is merely a statement of opinion about something not itself objectively measurable.  

The peculiarly narrow view of "meaning-championed by logical positivists - enough to cause disorder in philosophy itself - caused total chaos in welfare economics

Nonsense! It went from strength to strength because the role of the Government was greatly expanded. Don't forget Welfare Econ is part of Public Finance.  There was plenty of work for Cost Benefit analysis and project appraisal and calculating dead weight losses of different types of taxes. Meade, Hicks, Arrow and Samuelson's Nobel citations include their contribution to welfare econ. Sen could have got a Development Econ citation but his work in that field was too shitty.

when it was supplemented by some additional home-grown confusions liberally supplied by economists themselves. Positivist philosophers may have been off beam in taking all ethical propositions to be meaningless, but even they had not suggested that all meaningless propositions were ethical!

It took the genius of a Bengali monkey to imply they had. 

Pareto Optimality and Economic Efficiency Be that as it may, with the development of anti -ethicalism, as interpersonal comparisons of utility were eschewed in welfare economics, the surviving criterion was that of Pareto optimality.

Nonsense! People did Cost Benefit analysis. They imputed money values to 'external effects'. They spoke of 'Hicks-Kaldor improvements where the gainers got more than the losers lost. 

A so-cial state is described as Pareto optimal if and only if no-one's utility can be raised without reducing the utility of someone else.

No further arbitrage is possible. Obviously, if information improves and transaction costs fall, the frontier shifts outward. 

This is a very limited  kind of success, and in itself may or may not guarantee much. A state can be Pareto optimal with some people in extreme misery and others rolling in luxury, so long as the miserable cannot be made better off without cutting into the luxury of the rich.

A state which tries to take away money from the rich might end up yet more miserable for the vast majority. 

Pareto optimality can, like 'Caesar's spirit', 'come hot from hell'.

No it can't. Because of Knightian uncertainty we don't bother arbitraging everything. 'Regret minimization' means we maintain some precautionary stocks.  

Pareto optimality is sometimes also called 'economic efficiency'. That usage is appropriate from one point of  view. in that Pareto optimality deals exclusively with efficiency in the space of utilities, paying no attention to the distributional considerations regarding utility.

Nor do 'distributional considerations'. Saying 'lets take money from the rich and give it to the poor' doesn't actually redistribute utility. It is mere virtue signalling. True, you can raise taxes on the rich- in which case smart rich people escape the jurisdiction- and you can give cash to the poor- in which case suddenly everybody claims to be poor or else the country goes off a fiscal cliff and there is an entitlement collapse. But talking or doing stupid shit is of no use to anybody. 

However, in another respect the term is unfortunate, since the whole focus of analysis here continues to be utility, and this is a legacy left by the earlier utilitarian tradition.

Why, Sen asks, do economists have to pretend they are concerned with useful stuff? In India, economists were known to be utterly useless tossers whom the Dynasty hired to sign off on their corruption.  

It is, of course, possible to introduce other considerations in judging the. success of persons and thus of the society (see, for example, Rawls 1971, 1980, 1982).

One can say 'America is a complete shithole compared to Cuba' but who will believe you?  

Pareto optimality captures the efficiency aspects only of utility-based accounting,

No. It says there is no further scope for arbitrage.  

I shall have to come back to this question presently, but for the moment I want to follow further the story of the narrowing of welfare economics.' In the small box to which welfare economics got confined, with Pareto optimality as the only criterion of judgement, and self-seeking behaviour as the only basis of economic choice, the scope for saying something interesting in welfare economies became exceedingly small.

Yet Sen was able to babble nonsense! For a little Bengali monkey, he has done well for himself- right? Wrong. A Bengali economist who does well is a Bengali economist who makes Bengal more prosperous and secure.  

One important proposition in this small territory is the so-called 'Fundamental Theorem of Welfare Economics', which relates the results of market equilibrium under perfect competition with Pareto optimality, It shows that under certain conditions (in particular, no 'externality', i.e, no interdependences that are external to the market), every perfectly competitive equilibrium is Pareto optimal, and with some other conditions (in particular no economies of large scale), every Pareto optimal social state is also a perfectly competitive equilibrium, with respect to some set of prices (and for some initial distribution of people's endowments). This is a remarkably elegant result,

it is meaningless. Essentially the statement is 'if there were no need for Language or communication of any kind and if there were zero transaction costs and no uncertainty about the future then people would be coordinated by 'the invisible hand' in the same way as they would be by an omniscient planner. But this is because they would be Liebnizian monads synchronized in pre-established harmony.  

and one that also gives some deep insights into the nature. of the working of the price mechanism, explaining the mutually advantageous nature of trade, production and consumption geared to the pursuit of self-interest.

Nonsense! Just as if we were all omniscient, we would never need to learn to talk to each other because all our coordination problems would be automatically solved, so too would we never need to study how economies work. The coordination problem is solved by magic. 

One significant aspect of economic relationships pursued through the market mechanism got sorted out by this result arid related ones.

Nothing was sorted out. It is obvious that there is some way in which people can be coordinated such that they do exactly the same thing as they would if God told them what to do. That method involves carrots and sticks. The problem is we don't know what God would want everybody to do. Solving the 'general equilibrium' problem would take longer than the lifetime of the universe. This stuff looks mathsy but is magical nonsense.  

Despite its general importance, the ethical content of this welfare economic result is, however, rather modest.

Its ethical value is the same as the folk theorem of repeated games. It merely says 'anything a Dictator can do, a free market economy can do just as well'. This was important back when many young people thought the Sun shone out of Mao's back-side. Sen, however, is afraid to say he thinks freedom is a good thing. True freedom means ingratiating yourself with whichever bunch of thugs is running things in Calcutta.  

The criterion of Pareto optimality is an extremely limited way of assessing social achievement,

Capacity utilization is an extremely good way of assessing the efficiency of an economy. If there is a lot of excess capacity it means bad decisions have been made.  

so that the part of the result which claims that a perfectly competitive equilibrium, under the specified conditions, must be Pareto optimal, is correspondingly limited.

But Sen's Capability approach is still part and parcel of that magical Arrow-Debreu mathematical fantasy land.  

The converse proposition, i.e. that every Pareto optimal social state is a perfectly competitive equilibrium for some initial distribution of endowments, is more appealing, because it has been thought reasonable to suppose that the very best state must be at least Pareto optimal, so that the very best state too must be achievable through the competitive mechanism. Various procedures for supplementing the Pareto principle by distributional judgements have been considered

The problem here is that Pareto optimality- i.e. no arbitrage- disappears the moment people have reason to believe 'distributional judgments' will be implemented. The Pareto frontier may shrink as people refuse to trade in the fear that their gains will be confiscated.  

One interesting and important approach of supplementing Pareto optimality through distributional judgements involves the criterion of 'fairness', which demands that nobody envies the commodity bundle enjoyed by another..

That is 'envy freedom' and is equivalent to the notion that all transactions can be wound back costlessly. But if it obtains there will be less trade and the Pareto frontier shrinks.  

However, part of the difficulty in applying this result for public action arises from the fact that the in needed to calculate the required initial distribution of endowments is exacting and very hard to get,

Also the time class of the solution is exponential- i.e. it will take longer than the age of the Universe to calculate.  

and individuals may not have the incentive to reveal the necessary information.

unless there are open markets- i.e everybody is a 'price taker' and no Knightian Uncertainty obtains.

While the competitive market mechanism itself ensures an economy of information as far as the decisions of individual agents are concerned (given the initial distribution),

Nonsense! Price mechanisms use up resources. Moreover, depending on what algorithm simulates them, the 'no free lunch' theorem applies. In other words, one type of market clearing mechanism will have good results in one area but bad results, relative to another, in a different area. That is why you have different types of price mechanisms in different markets or even the same market (e.g. 'surge pricing' for Uber)  

the informational requirements for public decisions regarding initial ownerships cannot be easily obtained through any simple mechanism.'

You can't get the information and you can't complete the calculation during the lifetime of the universe. This is like Solomonoff's result re the trade off between computability and completeness.  

Given self-interested behaviour, the market mechanism provides good incentives for every agent to choose appropriately. given his initial endowments, but there is no comparable mechanism by which people have the incentive to reveal the information on the basis of which the choice among Pareto optimal states could be made and the appropriate initial distribution could be fixed.

This is because people don't actually bother to have preferences of the Arrow-Debreu sort. We 'outsource' this by imitating what smarter peeps are buying or selling.  

The usual mechanisms of decentralized resource allocation are also of no use in getting the necessary background information, since they act on the basis of 'team work' on the part of the different agents involved, whereas distributional decisions involve conflict between one agent and another.

Both involve 'bargaining problems'. If there are public signals re. 'Shapley values', you can quickly get to a better correlated equilibrium. Thus, suppose I'm part of a team which successfully brings a new app to market. I demand to know why I'm getting paid less than the guy with the PhD in Computer Science. It is pointed out to me that janitors like me tend to get paid only about 5 percent as much as highly qualified nerds who went to Collidge with Bill Gates's son.  

Thus, the ground that can be covered for actual action on the basis of the second part of the 'fundamental theorem' is rather limited. There is a further problem that even if such information were available, the second part of the 'fundamental theorem' would be used only if it were politically possible to redistribute resources among the people in any way that would be required by considerations of social optimality. Even if the necessary lump-sum transfers were identifiable and also economically feasible, issues of political feasibility can he obviously, extremely important when dealing with such fundamental matters as radical changes in ownership.

Sen wants to show that the subject for which he got a Nobel is utterly useless. He forgets that plenty of welfare econ is being done by guys doing CBA or Fiscal Policy mavens.  

Even though the invoking of the second part of the 'fundamental theorem -now often come from rather conservative quarters defending the market mechanism, that result can be of real use only as a part of some 'revolutionary's handbook', transforming the ownership of means of production before getting the market to do the rest.

There has been a big shift in that ownership such that the Institutional Investor has surrendered 'residuary control rights' to private equity mavens or Tech bros like Elon Musk.  

If radical redistributions of ownership were not possible, movements towards overall social optimality will require mixed mechanisms of a kind not covered by the 'fundamental theorem'.

 This has already happened. The Institutional Investor is afraid of the crazy animal rights, BDS or Black Lives activists. Also they don't understand new tech- probably because a lot of it is 'foamware'- i.e. smoke and mirrors. 

Utility, Pareto Optimality and Welfarism There is one other respect in which the significance of the 'fundamental theorem' needs some clarification. The idea that overall social optimality must inter alia require Pareto optimality-

which you'd get if you permit arbitrage  

is based on the notion that if a change is advantageous for each, then it must be a good change for the society. That notion must in some sense be correct, but to identify advantage with utility is far from obvious.

Utility is a 'Tarskian primitive'. You can say 'utility means, inter alia, advantage, benefit, usefulness, ophelimity, satisfaction etc.'  

And if in contrast, some interpretation of advantage other than utility is accepted,

e.g. karmic benefit- getting reborn as a God in a nice Heaven of your own 

then Pareto optimality - defined as it is in terms of individual utilities - would lose its status of being even a necessary condition, if not sufficient, for overall social optimality.

A society is only optimal if all the men in it can gain martyrdom and enjoy deflowering 72 virgins in Paradise. The women can go fuck a camel. If you don't got a hymen, I'm not interested. 

The enormous standing of Pareto optimality in welfare economics, as was argued earlier, relates closely to the hallowed position of utilitarianism in traditional welfare economics (before questions were raised about the possibility of interpersonal comparisons of utility). If interpersonal comparisons of utility are dropped, but nevertheless utility is regarded as the only thing of intrinsic value, then Pareto optimality would be the natural surviving criterion, since it carries the utilitarian logic as far forward as possible without actually making any interpersonal comparisons of utility. In fact, it can be easily shown that the utilitarian criterion when combined with entirely non-comparable utilities will yield a partial ordering of unambiguous social rankings, and that partial ordering will coincide exactly with the social ranking achieved by the Pareto criterion. 

It can even more easily be shown that the above is nonsense. Why? The math is based on an 'intensional fallacy'. A thing which is not a set is described as a set or else a 'relation' without a unique pre-order is assumed which is like assuming a cat is a dog. 

It is a different matter that a bunch of people may agree that 'the greatest good of the greatest number' is best served by agreeing to draw lots to decide who should be killed so the others can eat her flesh. That is the morality of utilitarianism.  

Utilitarianism as a moral principle can be seen to be a combination of three more elementary requirements; 1 'welfarism', requiring that the goodness of a state of affairs be a function only of the utility information regarding that state;

Nonsense! We don't have any access to utility information. We just have some subjective view likelihood. I think I will enjoy eating this cake. But, I don't coz just as I'm tucking in my g.f says she is breaking up with me coz I'm a fat, lazy, fuck with a needle dick. 

Welfarism may involve guesses about likely welfare- e.g. the athlete would like the nice pair of trainers more than the diabetic whose legs have been cut off- but it isn't a mathematical function of anything because the domain is unknowable.  

2 'sum-ranking', requiring that utility information regarding any state be assessed by looking only at the sum -total of all the utilities in that state;

You can't add up numbers you don't know.  

3 'consequentialism', requiring that every choice, whether of actions, institutions, motivations, rules, etc., be ultimately determined by the goodness of the consequent states of affairs.

Completeness or 'sufficient reason' is not required for consequentialism. It is enough that some things are causally determined while others are indeterminate or wholly aleatory.  

On its own, the Pareto criterion can be seen as capturing a particular aspect of welfarism, to wit: a unanimous ranking of individual utilities must be adequate for overall social ranking o the respective states.

Both are impossible. What has been 'captured' here is nonsense.  

In fact, the policy use of the Pareto criterion goes beyond welfarism and embraces consequentialism as well, since choices of actions, institutions, etc, are all required to satisfy Pareto optimality, so that consequentialism is implicitly but firmly demanded.

By whom? Some stupid professor teaching worthless shite? 

I have tried to argue elsewhere (Sen 1985a) that there is an essential and irreducible 'duality' in the conception of a person in ethical calculation.

Just as there is a duality in the conception of Amartya as a Sen and a Sen as an Amartya.  

We can see the person, in terms of agency, recognizing and respecting his or her ability to form goals, commitments, values, etc.,

just as we can see a person in terms of being visible- recognizing and respecting his or her ability to be seen 

and we can also see the person in terms of well-being, which too calls for attention.

Why stop there? Why not see the person not just in terms of being visible but also in terms of being able fart in a loud and smelly manner?

The fact is living beings do things to maintain their well-being. There is no point appreciating the fact that they do things and then appreciating the fact that they benefit from the things they do. Still, if we have nothing better to do, we can go one up on Sen by saying 'we must pay more attention to the well-being achieved by the agency of a person who exercises agency so as to achieve wellbeing to derive wellbeing from satisfaction at achieving the agency to pat itself on the back for its agency in patting itself on the back for achieving the agency to pat itself on the back for doing stuff which prevented it dying miserably. 

Suppose, one of these days, I get a job and get paid a little money rather than being fired unceremoniously on my first day. Then I may come to you and say 'I received pleasure from knowing I've earned this money'. You may pat me on the back. But if the next day I say 'I received pleasure from knowing that I achieved the knowledge that I experienced the pleasure of earning a little money on one day of my life' you may be less inclined to congratulate me. After a few weeks of my coming round to expatiate on the pleasure I receive from the pleasure I previously received for once having done an honest day's labour, you may lose patience with me and tell me to fuck off. 

This dichotomy is lost in a model of exclusively self-interested motivation, in which a person's agency must be entirely geared to his own well-being.

Nobody says it must be. Sen is like a Bengali friend of mine who objected to the geographical term 'Great Britain' because he firmly believed the Brits only thought they were so great because they had ruled 'Golden Bengal'. Now their country was overrun with Bangladeshi Tandoori restaurants, the Brits should call their country 'Shitty Britty'.  

But once that straitjacket of self-interested motivation is removed, it becomes possible to give recognition to the indisputable fact that the person's agency can well be geared to considerations not covered - or at least not fully covered - by his or her own well-being.

Sen firmly believes that other economists don't feed or clothe their own kiddies.  

Valuing and Value It might be asked whether attaching importance to each person's agency would amount to taking a 'subjectivist' view of ethics,

Ethics is concerned with subjects and there is nothing wrong with it being subjective. What is silly is to distinguish agency from the effects of agency because this gives rise to an infinite regress of 'agency of agency of agency' to achieve any amount of well-being.  

since whatever a person values and wishes to achieve might have to be, then, taken as valuable precisely because he or she values it.

It is valuable to her. That's an objective fact.  

But, in fact, the controversial issue of 'objectivity' is not foreclosed by taking agency as important.

What isn't foreclosed is an infinite regress of nonsense.  

This is so for two distinct reasons. First, to attach importance to the agency aspect of each person does not entail accepting whatever a person happens to value as being valuable

It is not important to attach importance to stupid shite. No doubt, a pedagogue may be obliged to say 'I value your freedom to shit on me. However, this does not mean I value being shat upon. Have you considered there might be better places for you to empty your bowels?' If the answer is 'Black Lives matter! Down with Jewish genocide!' the Professor may feel obliged to quietly eat the turds which are being squeezed out into his mouth so as to protect Academic Freedom and preserve a safe space for Student Activism.  

(i) unconditionally,

Professors must only conditionally accept the gift of turds from their students. 

and (ii) as intensely as it is valued by the person.

unless you genuinely like eating shit. 

Respecting the agency aspect points to the appropriateness of going beyond a person's well-being into his or her valuations, commitments, etc., but the necessity of assessing these valuations, commitments, etc. is not eliminated by the mere acceptance of that appropriateness.

Very true. If your student shits on you regularly it is not permissible to assess her as a substandard student on the basis that a turd is not the same thing as a term paper. You must look at her own valuations, commitments etc. Might it not be the case that her turds represent important discoveries in Social Choice theory? After all, all the other great results in that field are shit.  

Agency may be seen as important (not just instrumentally for the pursuit of well-being, but also intrinsically), but that still leaves open the question as to how that agency is to be evaluated and appraised.

Maybe you can mark her down because her turds have poor consistency.  

I have tried to argue elsewhere (Sen 1985a) that even though 'the use of one's agency is, in an important sense, a matter for oneself to judge', 'the need for careful assessment of aims, objective, allegiances, etc., and of the conception of the good, may he important and exacting' (p. 203).

It may that Sen, as the supervisor of numberless shite PhD theses, considers his professional career to have been 'important and exacting'. But it was coprophagy pure and simple. 

The issue of objectivity relates to the interpretation of that 'careful assessment' — as to what kind of an exercise it is taken to be.

A useless one.  

Second, it is also the case that an objectivist second order view of ethics

i.e. is ethics itself ethical? The answer is no. It ran off with its best friend's wife and is now being shat upon by its students.  

can co-exist with a substantive ethics that includes among the valuable objects people's ability to get what they do, in fact, value.

This is double counting. This cake is valuable. People who buy it value the cake but they lose something else they value- viz. money. Still, there might be 'consumer surplus' and Welfare Econ spends a lot of time calculating this. What it doesn't do, at the margin, is add the price of the cake to the value received by the guy who bought the cake so as to arrive at a total utility double the price of the cake. 

Getting (or having the capability of getting) what one values is not, in this respect, particularly different from other things that might be valued, e.g.. happiness, well-being, liberty, and it can thus figure in an objectivist valuation function in much the same way as these other objects might figure in such a function.

In other words, it can't figure in any mathematical function because the domain is unknowable.  

The issue of foundation has to be distinguished from the nature of the objects that are valued. Even an objectively founded theory can give an important role to what people actually do value and to their ability to get those things. 

If it is shit- sure. The problem is 'ability to value' and 'ability to value valuing' etc. are part of an infinite regress. According to this view, I receive ten gazillion utiles from the fact that I once did an honest day's work many decades ago. 

Agency and Well-being: Distinction and Interdependence To recognize the distinction between the 'agency aspect' and the 'well-being aspect' of a person does not require us to take the view that the person's success as an agent must be independent, or completely separable from, his success in terms of well-being. A person may well feel happier and better off as a result of achieving what he wanted to achieve - perhaps for his family, or his community, or his class, or his party, or some other cause. Also it is quite possible that a person's well-being will go down as a result of frustration if there is some failure to achieve what he wanted to achieve as an agent, even though those achievements are not directly concerned with his well being. There is really no sound basis for demanding that the agency aspect and the well-being aspect of a person should he independent of each other, and it is, I suppose, even possible that every change in one will affect the other as well.

'Well-being' is fine. 'Agency' is not fine. Admit it, and you have to admit 'agency to have agency to have agency to have agency' etc.  On the other hand, people may pay a fee to be permitted to do certain things even if they don't actually do the thing. But that is a straightforward 'hedge' and a direct source of well being. 

However, the point at issue is not the plausibility of their independence, but the sustainability and relevance of the distinction. The fact that two variables may be so related that one cannot change without the other, does not imply that they are the same variable, or that they will have the same values, or even that the value of one can be obtained from the other on the basis of some simple transformation.

A variable which can quickly go off to infinity isn't really a variable. It is nonsense.  

The importance of an agency achievement does not rest entirely on the enhancement of well-being that it may indirectly cause. For example, if one fights hard for the independence of one's country, and when that independence is achieved, one happens also to feel happier, the main achievement is that of independence, of which the happiness at that achievement is only one consequence.

But Independence comes to those who fought for it as well as those who didn't give a fart about it. Both may feel happier or sadder or may fart wistfully while gazing at a picture of a pomegranate. 

It is not unnatural to be happy at that achievement, but the achievement does not consist only of that happiness.

More particularly if there was no fucking achievement.  

It is, therefore, plausible to argue that the agency achievement and well-being achievement, both of which have some distinct importance, may be causally linked with each other, but this fact does not compromise the specific importance of either.

Wistful farting may be causally linked to gazing at a picture of a pomegranate. This has no fucking importance whatsoever.  

In so far as utility-based welfarist calculus concentrates only on the well-being of the person,ignoring the agency aspect, or actually fails to distinguish between the agency aspect and the well-being aspect altogether. something of real importance is lost.

Nothing is lost. The question is did people pay, or would they pay if required, for a particular agency? You can impute welfare to them on this basis. For e.g., suppose money and labour was expended on the struggle for Independence. This could be an imputed benefit after Independence was achieved. However, if people from the newly Independent country pay a lot of money to escape to shores still ruled by the Imperial power, then, maybe, there was an imputed cost, not benefit, to the thing. 

Utility and Well-being The second difficulty with welfarism arises from the particular interpretation of well-being that utility provides. To judge the well-being of a person exclusively in the metric of happiness or desire-fulfilment has some obvious limitations,

For example you don't get to say that the rich handsome dude is actually utterly miserable because he doesn't have a micro-dick.  

These limitations are particularly damaging in the context of interpersonal comparisons of well-being,

like my saying I should get to rob and kill you because my pleasure in doing so greatly exceeds any supposed 'disutility' you and your loved ones might feel at this outcome.  

since the extent of happiness reflects what one can expect and how the social 'deal' seems in comparison with that. A person who has had a life of misfortune, with very little opportunities, and rather little hope, may be more easily reconciled to deprivations than others reared in more fortunate and affluent circumstances,

Or vice versa. Jean Dreze isn't happy unless he is being bitten by mosquitoes while living in an airless jhuggi in some Indian slum.  

The metric of happiness may, therefore, distort the extent of deprivation, in a specific and biased way.

But no such metric has ever existed.  

The hopeless beggar. the precarious landless labourer, the dominated housewife, the hardened unemployed or the over-exhausted coolie may all take pleasures in small mercies, and manage to suppress intense suffering for the necessity of continuing survival, but it would be ethically deeply mistaken to attach a correspondingly small value to the loss of their well-being accounting.

There is no 'well-being accounting'. Governments do measure National Income because this determines how much tax revenue they can raise. Money matters. Sen-tentious virtue signalling does not.  

Of course, insofar as utility stands for agency, it cannot at thc same time reflect well-being,

because a Bengali monkey said so. Still, some people can make a bit of money publishing 'click-bait' Happiness Indices and so forth. 

 Achievements, Freedom and Rights There is another - in some sense more basic - question as to whether a person's advantage is best seen in terms of his or her achievement,

Achievement is a word pedagogues have to use so as to pretend their students are gaining something in return for Mummy and Daddy's hard earned cash. The fact is the good looking or witty or talented or ambitious kid will do well even if she sat through Sen's stupid lectures.  

This issue arises in evaluating both well-being and agency. It can be argued that advantage may be better represented by the freedom that the person has and not by (at least not entirely by) what the person achieves - in well-being or in terms of agency — on the basis of that freedom. This type of consideration will take us in the direction of rights, liberties, and real opportunities,

This comes under the rubric of 'life-chances'. Then people discovered that if you had been taught about 'life-chances' in Collidge, you had already failed in life.  

If in ethical accounting the person's advantages are judged - at least partly - in terms of freedom-type considerations, then not merely utilitarianism and welfarism, but also a  number of other approaches that concentrate on achievement alone would have to be rejected. 

More particularly if they demand the freedom to shit on your face.  

In the ethical literature rights-based moral theories go back a long time,

Indeed, the rights-based approach provided the scaffolding for laissez faire economics.  

and indeed utilitarians like Jeremy Bentham paid a good deal of attention to rejecting such theories, describing the various doctrines as 'simple nonsense', 'bawling upon paper', and 'rhetorical nonsense, nonsense upon stilts'.

Bentham wanted a simple legal Code. But the Anglo-American tradition has rejected codification. Some twenty years ago, the French started worrying that they had taken the wrong direction under Napoleon.  

Rights-based theories

were put on a sound empirical footing by Hohfeld. Sadly, economists remained ignorant of this. Combine Hohfeld and Coase and you have 'Law & Econ'. Add in mechanism design and you are all caught up.  

have not however. been so easy to dispose of. and despite the long dominance of utilitarianism in ethics, they have recently been powerfully revived again, in different ways, by such writers as Kanger (1957, 1985), Rawls (1971), Nozick (1974), Dworkin (1978). Mackie (1978). among others. 

Sadly, they didn't do Hohfeldian analysis in which case they would have seen that a right is only effective if the remedy for its violation is incentive compatible for the obligation holder. Justice is merely a service industry. It will be disintermediated if it can't pay for itself. The other thing is that the Social Contract can only be 'incomplete'.  

In economics the concept of rights is often invoked, and indeed the basic economic concepts of endowment. exchange. contract, etc.. all involve various types of rights.

No. The concept does not exist. It is assumed that everybody can gain a remedy costlessly.  

However, under the utilitarian tradition, these rights were viewed as entirely instrumental to achieving other goods, in particular utilities,

No. They were ignored. At a later point, after the Marshallian revolution, people did speak about how much you'd pay to have access to a particular market. But that is not the same thing. 

No intrinsic importance is attached to the existence or fulfilment of rights, and they have been judged by their ability to achieve good consequences, among which the fulfilment of rights have not figured.

No. Rights have been ignored. We have the right to fart. Nobody cares. When we do fart, they start holding their noses and complaining. Sad.  

This particular tradition has been carried into the postutilitarian phase of welfare economics. concentrating on Pareto optimality and efficiency. This is not surprising since the rejection of attaching intrinsic importance to rights comes from

common sense. If you attach intrinsic importance to the right to fart then you have to attach intrinsic importance to having the right to have a right to fart. That way lies madness.  

Concentration on what was called in the first lecture the 'engineering' aspect of economics

i.e. economizing on the use of scarce resources 

has tended to go hand in hand with sticking to a very narrow view of ethics.

 rather than placing intrinsic value on the right to have the right to have the right to have the right to fart. 

It is arguable that the utilitarian criterion, and also that of Pareto efficiency, have appealed particularly because they have not especially taxed the ethical imagination of the conventional economist.

Many conventional economists are too unimaginative to value the right to have the right to have the right to fart. What miserable lives they must lead! 

While a questioning economist like John Hicks (1959) may argue that the classical backing for 'economic freedom' went deeper than justifying it on grounds of 'economic efficiency', which provided 'no more than a secondary support' to freedom, and while he is certainly cogent in questioning the justification for our 'forgetting, as completely as most of us have done, the other side of the argument' (p. 138), such protests have been rather rarely made, and even more rarely followed up.

It is obvious that we value 'economic freedom' because we know that if we try to stop people from using their labour power in the way they please, they may kill us on the grounds that we have enslaved them.  

Indeed. mainstream economics has tended to ignore even the more complex and refined versions of utilitarianism itself, e.g. those involving 'indirect relations' concentrating instead on the simpler - more 'direct' - versions. 

This is because the silliness of Utilitarianism is highlighted by 'indirect' Utility. We don't actually calculate utility. We do what smart folks are doing. Mimetics and FOMO etc are better at explaining behaviour. Still, some shitheads get paid a little money to lecture on this shit.  

Self-interest and Welfare Economies In this lecture I have been concentrating so far on the impoverishment of welfare economics as a result of the distance that has grown between ethics and economics,

Welfare Econ becomes impoverished when it isn't raising the welfare of actual human beings. Sen may feel it would be much richer if it was having sex with Ethics and then Ontology got in on the action while Metaphysics looked on disapprovingly.

But I began this lecture by referring to the directional asymmetry that has been arbitrarily imposed between predictive economics and welfare economics,

There is no such asymmetry. A guy doing welfare econ can get a result which is then used by a macro-econ forecasting maven- e.g. higher taxes on demerit goods could cause increased work effort leading to higher growth with lower inflation. 

with the former being taken into account in the latter, but without any influence coming from the opposite direction. If. however, the actual behaviour of human beings is affected by ethical considerations (and influencing human conduct is after all. central aspect of ethics), then clearly welfare— economic considerations must be allowed to have some impact on actual behaviour and must therefore be relevant for predictive economics also.

Obviously! If the Government cracks down on demerit and nuisance goods then we can safely predict higher growth. 

indeed it would be rather absurd to devote much attention to the subject of ethics if it were really the case that ethical considerations would never affect people's actual behaviour.

Yet that is what has actually happened. When we see somebody we like and admire take a particular course of action for a moral reason, we are more likely to copy that behaviour. If some smelly Prof explains why Kant thought it was wrong to wank, we promptly pull out or todger and jizz all over him.  

The sense of invulnerability from ethics that predictive economics seems to enjoy

Sen keeps telling good economists- like Bhagwati or Manmohan Singh- that they are very evil. Bhagwati patiently explains to him that he is stupid and useless. Sen cries and cries. Why is Bhagwati being so invulnerable? Is it because he didn't run off with his best friend's wife? 

arises partly from the alleged force of the hypothesis that human behaviour. at least in economic matters, can be well approximated by selfinterest maximization.

i.e. doing sensible things. Sen feels this is very wrong. Why do Indians want to have higher Income and better State capacity? Why don't they do stupid shit and quietly starve to death while Pakistan takes over their territory?  

A substantial part of the first lecture was devoted to questioning this behavioural assumption.

Sen is getting paid for spouting this shite. His behaviour is self-interested. If you are going to pose as the Mother Theresa of Econ, do it in a rich country- not Calcutta.  

The time has now come to link up that discussion regarding actual behaviour (and the underlying concept of rationality used as an intermediary) and the present discussion about the ethical foundations of welfare economics. It is easy to see that if welfare economic considerations affect actual behaviour,

Welfare econ studies behaviour and tries to improve outcomes. Some peeps like spending money on booze. They are actually made better off, long term, if there are taxes on that booze which pay for things like Public Health and Education.  

then the nature of acceptable welfare economics

as opposed to unacceptable welfare econ which actually improves outcomes for ordinary people 

must be rather important for description, explanation and prediction of economic occurrences.

This is like saying 'the shit inside my brain must be rather important for explaining the world because, after all, it is in my brains and brains are supposed to help you understand the world'.  

Indeed, if economic efficiency (in the sense of Pareto optimality)

Allocative efficiency in a particular market does not require Pareto optimality. Sen is ignorant of Econ.  

were the only criterion for economic judgement, and if the various conditions (such as no externality) imposed by the so-called 'Fundamental Theorem of Welfare Economics' were to hold, then there would be in general no welfare—economic argument for anyone to behave in a way other than that required for self-interest maximization.

Because any sensible argument is already incorporated in the utility function.  

Such behaviour on the part of all will indeed produce Pareto optimality, and the attempt on the part of anyone to depart from self-interest maximization would,

be classed as a change in the utility function. It is still being maximised so long as you are doing what you want to do. 

if it would do anything, only threaten the achievement of 'economic efficiency', i.e. Pareto optimality..

It wouldn't threaten it at all provided you are doing what you think makes you happiest.  

Therefore, if welfare economics is in fact put in this extremely narrow box, and if the structural assumptions were to hold (including ruling out non-market interdependences), then there would indeed be no welfare-economic case against self-interested behaviour,

If we put the shit in Sen's head in a narrow box, it would still be sit. Sen simply does not understand that in Econ the self gets to determine what is in its own interest. So long as it acts freely, it is deemed to have maximized its self-interest.  

Thus, given the structural assumptions, the one-sided format of the relation between predictive and welfare economics, which can be seen in the dominant economic tradition, is entirety sustainable as long as welfare economics is confined to the narrow box proclaiming the adequacy of Pareto optimality.

Pareto optimality just means that all possible mutually profitable deals have already been done.  

As and when that narrow box is busted by bringing in broader ethical considerations, the sustainability of the one-sided relationship must also disappear.

You are welcome to say 'everybody is very evil' if that is what makes you happy. If you are a brown monkey, maybe Harvard will make you a Professor so you can go around scolding White peeps for being so fucking White. 

In the next stage of the examination, it may be asked what would he the consequence of taking a more demanding welfarist criterion, such as utilitarianism. This would certainly be adequate for rejecting the optimality of self-interested behaviour in many circumstances.

Only in the sense that it is adequate to reject the world because it was made by Satan. All these guys going to Church and giving to Charity are gonna burn in Hell Fire!  

indeed, Francis Edgeworth (1881) saw the conflict of principles in the determination of individual behaviour as one between 'egoism' on the one hand, and 'utilitarianism' on the other.

He was brilliant though his style of writing was opaque. He showed that higher taxes could cause prices to fall.  

It is, of course, true that the utilitarian optimum must be inter alia Pareto optimal, and also true that - under the circumstances demanded by the so-called 'fundamental theorem' - any departure from self-interested behaviour may well threaten the achievement of Pareto optimality. But it is not true that any movement from a Pareto optimal state to a non-Pareto optimal one must reduce the aggregate utility.

There is no 'aggregate utility'. We can merely say 'I prefer this state of society to that one'.  

Indeed frequently that will not be the case. However, as was discussed earlier, the 'Fundamental Theorem of Welfare Economics' would yield a justification of self- interested behaviour on the part of each if the initial distribution of endowments is appropriate for the chosen welfarist objective.

No. We may have to incarcerate self-interested maniacs who like stabbing people.  

The overall scheme admitted of circumstances in which acting entirely according to self- interest could be ethically fully justified.

It merely said that anything a Dictatorship could do, a Free Market could also do. Carrots can do the job of sticks. Sen, for some reason, objects to this. But it is also the 'folk theorem of repeated games'. Basically, Sen thinks Econ should make a place for brown monkeys who scold it for being too materialistic and self-interested. Also, why are White peeps so fucking White? At least you could have some black stripes- like zebras.  

Then, once again, welfare-economic considerations would not reject selfinterested behaviour, and consequently predictive economic analysis could be free from any 'infection' from welfare economics.

This is silly. If you improve welfare, productivity can rise. Suppose you are hired to do Cost Benefit Analysis for building a new Sports Centre. You find that if local people are given subsidized membership, health outcomes improve, absenteeism declines, Companies make bigger profits and pay more taxes. Thus the local authority turns a profit on its investment while rate-payers get a capital gain on the value of their property.  

Self-interested behaviour can scarcely suffice when agency is important on its own (and is not simply reducible to the pursuit of self-interest).

Very true. It is in my self-interest to take a shit. Society should put a value on my agency in taking a shit by myself. Also it should value my agency in having the agency to have the agency to take a dump. Stuff like this matters a lot. Singapore may have become a very rich country. But its leaders are not valuing the Singaporean's agency to have the agency to have the agency to take a dump. That is why Singaporeans are trying desperately to relocate to Gaza. 

Another type of problem arises from adopting a notion of well-being that differs from utility,

Hamas has a great notion of how raping and killing and then being killed will get you 72 virgins in Heaven.  

since the 'fundamental theorem' is not easily translatable into other ways of judging individual well-being,

It doesn't judge shit.  

A view of well-being not primarily based on preference, but on some 'objective' circumstances (e.g, a person's functioning achievements)

getting lots of virgins in Heaven 

may also undermine the simplicity of the picture of selfinterested choice implicit in the behavioural assumptions underlying the 'fundamental theorem'

It is assumed that raping and killing won't get you 72 virgins in Paradise. How very bizarre!

While choice may well diverge from preference, it can diverge much more easily from these other, non-preference-based notions of well-being.

Which are wholly arbitrary. 

Rights and Freedom The inadequacy of self-interested behaviour can also be serious in ethical approaches that emphasize rights and Freedoms.

these are Hohfeldian incidents. There is no point gassing on about them because they collapse if the remedy is not incentive compatible.  

This fact might not be quite obvious. Some theories of rights, e.g. that of Nozick (1974), assert the right of a person to pursue anything he likes provided he does not violate the deontological constraints that restrain him from interfering in the legitimate activities another. 

Because that could cause him to be beaten to death.  

The person is free to pursue self-interest (subject to those constraints) without let or hindrance. It must, however, be recognized that the existence of these rights does not indicate that it would be ethically appropriate to exercise them through self-interested behaviour.

Nor would it be ethically appropriate not to do so. Ethics is about changing one's ethos- i.e. what one is to oneself. It is perfectly appropriate to try to become a better person. This is in your interest long term. 

The existence of such a right restrains others from stopping this person if he were to pursue self-interest maximization, but that is not a reason for actually pursuing self-interest.

What you pursue is defined as your self-interest provided you are a self and have some interest or the other.  

In fact, a theory of rights like that of Nozick can be combined even with asserting the moral appropriateness on the part of each person in the society to think how he might help others.

It could also be combined with eating your own shit. People understand that you like scolding people while scoffing down your own turds.  

If the ethical case for going beyond self-interested behaviour is to be rejected, this could not, thus, be on grounds of the priority of these rights.

It depends on the rights in question. Kids, criminals, and lunatics may exhibit 'self-interested behaviour' which Society curbs in various ways. The State may have 'priority' in its right to incarcerate or educate such individuals. 

This is so even when the rights are conceived of in so called 'negative' terms (e.g. rejecting interference, rather than giving a positive right to be helped by others).

The first is a Hohfeldian immunity while the latter creates an obligation holder. But who will enforce either?  

Indeed, valuing 'negative freedom' — as opposed to merely obeying the corresponding constraints — may have implications in favour of conduct in positive defence of such freedom of others, e.g. a duty to help others when they are threatened with violation of negative rights.

Some States may have 'Good Samaritan' laws obliging citizens to help those who are being attacked.  Again, the question is of enforcement. That is a matter of economics, not ethics. Sen and his ilk prefer to create all sorts of rights and pass all sorts of laws creating new classes of obligation holders. They forget that, as Tacitus observed, when the state is most corrupt, then laws are most multiplied

The two things Sen least understands are Freedom- which is a set of Hohfeldian immunities dependent on the provision of incentive compatible remedies- and 'Consequences' which depend on mechanisms not pious wishes or incontinent scolding.

Freedom and Consequences In the last lecture I discussed how the conceptualization of personal achievement and advantage in welfare economics has been deeply influenced by the utilitarian view of the person and how this influence continues to be important even in the post - utilitarian phase of welfare economics.

Sen was wrong. Welfare Econ rose along side Public Finance. Wagner's law predicts that the size of the Government will rise relative to GNP (because public services have high Income elasticity) and thus there was more work for economists advising on fiscal policy and Cost Benefit Analysis etc. This had nothing to do with some shite uttered by Bentham or Edgeworth or anybody else.  

The utilitarian conception, it was argued, is narrow and inadequate,

just as Tagore and Nehru thought wealthy and powerful America was narrow and inadequate save for purposes of refilling his begging bowl.  

and it has been further impoverished in modern welfare economics by the imposition of some additional Limitations, especially the eschewing of interpersonal comparisons of utility,

Which is why those fucking Yanks don't get that they are actually much much poorer than starving Bengalis.  

That additional impoverishment can be countered by returning to a more full-blooded utilitarian conception.

full of shit, not blood.  

But that will do nothing to remove the indigent nature of the basic utilitarian view of the person.

Which is why you should pay brown monkeys like Sen to scold you.  

Well-being, Agency and Freedom

we have to distinguish between the 'well-being aspect' and the 'agency aspect' of a person. The former covers the person's achievements and opportunities in the  context of his or her personal advantage,

No. It just looks at what they have.  National Income accounting does this well enough. 

whereas the latter goes further and examines achievements and opportunities in terms of other objectives and values as well, possibly going well beyond the pursuit of one's own  interest.

But nobody bothers to do this. True, if you come from a starving shithole you can claim that your people are actually much better off because they are closer to God or to Prophet Marx or some such shite. 

The 'well-being aspect' is particularly important in assessing issues of distributive justice (including diagnosing economic injustice)

But voters don't give a shit about this. They want higher absolute income rather than that everybody should starve together.  

and in evaluating the nature of the 'deal' that the person has in terms of personal advantage. The 'agency aspect' takes a wider view of the person, including valuing the various things he or she would want to see happen, and the ability to form such objectives and to have them realized.

I suppose, if you are stuck teaching useless shit to thickos, then you have to say 'true, this kid can't read and write and some may say this affects his well-being. But he has agency to fart ruminatively while gazing at a picture of a pomegranate. Surely, that's worth something? It is sad that his parents are complaining that I'm a shit teacher.'  

While both well-being and agency are active concepts since both involve various functionings and the distinction between these two aspects does not correspond to that between a 'patient' and an 'agent', the agency aspect pays more complete attention to the person as a doer.

Sen wants to watch you poop. He will pay complete attention if you shit on his head. Just do it already.  

The distinction does not, of course, entail that a person's agency is independent of his or her well-being. As was discussed in Lecture 2, it is natural to expect that no substantial variation in one can be achieved without some variation in the other. But they are nevertheless not identical, nor so closely linked that one can be seen as a mere transformation of the other.

What you get matters because it affects your well-being. You gain nothing if some dude claims that Society should pay complete attention to watching you poop even if that dude is willing to give you a gold star for displaying your agency. 

The utilitarian treatment of the person suffers from a failure to distinguish between these different aspects, and from trying to motivate normative evaluation on the basis of the wellbeing aspect alone.

Those silly utilitarians think people are better off if they have nice houses and good things to eat. They don't get that complete attention to their agency in defecating is required for a proper implementation to the Capabilities approach to seeing Development as Freedom.  

Second, the utilitarian conception provides a defective  (and systematically biased) view of well-being,

Why did Edgeworth not give a gold star to Sen's grandfather- a Judge in Bengal- for having the agency to take a shit now and then? Is it coz Sen's ancestors were bleck?  

 While being happy is a momentous achievement, it is not the only achievement that matters to one's well-being (on this, see Rawls 1971).

Because complete attention is not being paid to your agency in defecating.  

Also, while desire is often a good indicator of the valuable nature of what is desired, the metric of desire

like Sen running off with his best friend's wife 

can be a very inadequate reflection of value - indeed even of what the person himself or herself actually values, not to mention what he or she would value on serious and courageous reflection, freed from the limitations imposed by unfavourable circumstances.

Sen's running away with his best friend's wife also meant he had to quit India. This was a good thing because Indians would have told him he was a shit economist just like his pal Sukhomoy.  

This limitation is particularly serious in the context of interpersonal comparisons of well-being.

Sen decided his best friend was getting less utility from his wife and so, very kindly, ran off with her.  

Third. a person's freedom can be seen as being valuable in addition to his or her achievements.

Just as her agency in taking a dump can be seen as very valuable in addition to her achievement in dropping the kids off at the pool. 

A person's options and opportunities can be seen as counting in a normative evaluation. in addition to what the person ends up achieving or securing. Freedom may be valued not merely because it assists achievement, but also because of its own importance, going beyond the value of the state of existence actually achieved.

But freedom hasn't really increased unless more can now be achieved.  

If, for example, all the alternatives other than the one actually chosen were to be eliminated, this need not affect achievement (since the chosen alternative can be still chosen), but the person clearly has less freedom, and this may be seen as a loss of some importance. 

Would they pay for those alternatives to be available? If so, how much they pay is the value of 'the hedge' that those alternatives represent.  

An alternative way of seeing freedom is through characterizing '.functionings' in a 'relined' way (see Sen 1985a. pp. 200-2), taking note of the alternatives that were available. For example., choosing x when v is available may be seen as different from choosing x when y is not available The language commonly used sometimes does, in fact. lake a 'relined' form. e.g. 'fasting' is not just starving. but doing so despite having the option not to starve..

One is involuntary. The other isn't. But neither are terms used in econ.  

The perspective of freedom can be applied to the 'wellbeing aspect' as we!! as to the 'agency aspect'. There are, therefore. four distinct categories of relevant information regarding a person, involving 'well-being achievement', 'well-being freedom', 'agency achievement', and 'agency freedom'.

There is only one that matters- viz. well-being. We do want to be better off and don't mind if economists are paid to figure out how to achieve better outcomes with the same resources. We don't want to pay economists who want to pay complete attention to us pooping or giving us a gold star for 'agency achievement' or having exercised our freedom to shit. 

Can ethics and economics come together through game theory? Up to a point- yes. The problem is Knightian Uncertainty. We don't know the possible future states of the world. Thus the exercise, though occasionally illuminating, is essentially arbitrary. The availability cascades this gives rise to degenerate rapidly. Look at 'effective altruism'. It is now synonymous with fraud just as Sen-tentious econ is synonymous with saying 'Hindus bad. Muslims good.' 

Sen ends his book thus.

I have tried to argue that welfare economics can be substantially enriched by paying more attention to ethics,

particularly the clitoris of Ethics.  

and that the study of ethics can also benefit from a closer contact with economics.

Anal sex 

I have also argued that even predictive and descriptive economics can be helped by making more room for welfare—economic considerations in the determination of behaviour.

They were always there. Welfare Econ is a branch of Public Finance.  

I have not tried to argue that either of these exercises would be particularly easy.

They aint rocket science. Practical people have been doing this stuff for ten thousand years.  

They involve deep-seated ambiguities, and many of the problems are inherently complex. But the case for bringing economics closer to ethics does not rest on this being an easy thing to do. The case lies, instead, on the rewards of the exercise.

There are none. Sen is a waste of space.  

I have argued that the rewards can be expected to be rather large. 

Economists are supposed to actually create big rewards for Society. Ken Binmore made ten billion for the UK chequer by doing the auction design for the 3G spectrum. Sen turned Nalanda University in Bihar into an international joke.