Tyler Cowen has a new book, Stubborn Attachments. In my next post I’ll engage his book’s main claim. But in this post I’ll take issue with one point that is to him relatively minor, but is to me important: the wisdom of the usual economics focus on preferences:

Sometimes my fellow economists argue that “satisfying people’s preferences” is the only value that matters, because in their view it encapsulates all other relevant values. But that approach doesn’t work. It is not sufficiently pluralistic, as it also matters whether our overall society encompasses standards of justice, beauty, and other values from the plural canon. “What we want” does not suffice to define the good. Furthermore, we must often judge people’s preferences by invoking other values external to those preferences. …

Furthermore, if individuals are poorly informed, confused, or downright inconsistent— as nearly all of us are, at times— the notion of “what we want” isn’t always so clear. So while I am an economist, and I will use a lot of economic arguments, I won’t always side with the normative approach of my discipline, which puts too much emphasis on satisfying preferences at the expense of other ethical values. … We should not end civilization to do what is just, but justice does sometimes trump utility. And justice cannot be reduced to what makes us happy or to what satisfies our preferences. …

iI traditional economics— at least prior to the behavioral revolution and the integration with psychology— it was commonly assumed that what an individual chooses, or would choose, is a good indicator of his or her welfare. But individual preferences do not always reflect individual interests very well. Preferences as expressed in the marketplace often appear irrational, intransitive, spiteful, or otherwise morally dubious, as evidenced by a wide range of vices, from cravings for refined sugar to pornography to grossly actuarially unfair lottery tickets. Given these human imperfections, why should the concept of satisfying preferences be so important? Even if you are willing to rationalize or otherwise defend some of these choices, in many cases it seems obvious that satisfying preferences does not make people happier and does not make the world a better place.

Tyler seems to use a standard moral framework here, one wherein we are looking at others and trying to agree among ourselves about what moral choices to make on their behalf. (Those others are not included in our conversation.) When we look at those other people, we can use the choices that they make to infer their wants (called “revealed preferences”), and then we can then make our moral choices in part to help them get what they want.

In this context, Tyler accurately describes common morality, in the sense that the moral choices of most people do not depend only on what those other object people want. Common moral choices are instead often “paternalistic”, giving people less of what they want in order to achieve other ends and to satisfy other principles. We can argue about how moral such choices actually are, but they clearly embody a common attitude to morality.

However, if these moral choices that we are to agree on satisfy some simple consistency conditions, then formally they imply a set of “revealed preferences”.  (And if they do not actually satisfy these conditions, we can see them as resulting from consistent preferences plus avoidable error.) They are “our” preferences in this moral choice situation. Looked at this way, it is just not remotely true that “ ‘What we want’ does not suffice to define the good” or that “Justice cannot be reduced to … what satisfies our preferences.” Our concepts of the good and justice are in fact exactly described by our moral preferences, the preferences that are revealed by our various consistent moral choices. It is then quite accurate to say that our moral preferences encapsulate all our relevant moral values.

Furthermore, the usual economics framework is wise and insightful because we in fact quite often disagree about moral choices when we take moral action. This framework that Tyler seems to use above, wherein we first agree on which acts are moral and then we act, is based on an often quite unrealistic fiction. We instead commonly each take moral actions in the absence of agreement. In such cases we each have a different set of moral preferences, and must consider how to take moral action in the context of our differing preferences.

At this point the usual economists’ framework, wherein different agents have different preferences, becomes quite directly relevant. It is then useful to think about moral Pareto improvements, wherein we each get more of what we want morally, and moral deals, where we make verifiable agreements to achieve moral “gains from trade”. The usual economist tools for estimating and calculating our wants and the location of win-win improvements then seem quite useful and important.

In this situation, we each seek to influence the resulting set of actual moral choices in order to achieve our differing moral preferences. We might try to achieve this influence via preaching, threats, alliances, wars, or deals; there are many possibilities. But whatever we do, we each want any analytical framework that we use to help us in this process to reflect our actual differing moral preferences. Yes, preferences can be complex, must be inferred from limited data on our choices, and yes we are often “poorly informed, confused, or downright inconsistent.” But we rarely say “why should the concept of satisfying [my moral] preferences be so important?”, and we are not at all indifferent to instead substituting the preferences of some other party, or the choice priorities of some deal analyst or assistant like Tyler. As much as possible, we seek to have the actual moral choices that result reflect our moral preferences, which we see as a very real and relevant thing, encapsulating all our relevant moral values.

And of course we should expect this sort of thing to happen all the more in a more inclusive conversation, one where the people about whom we are making moral choices become part of the moral “dealmaking” process. That is, when it is not we trying to agree among ourselves about what we should do for them, but when instead we all talk together about what to do for us all. In this more political case, we don’t at all say “my preferences are poorly informed, confused, and inconsistent and hardly matter so they don’t deserve much consideration.” Instead we each focus on causing choices that better satisfy our moral preferences, as we understand them. In this case, the usual economist tools and analytical frameworks based on achieving preferences seem quite appropriate. They deserve to sit center stage in our analysis.