Thursday, December 21, 2017

Importance of Social Choice

Kenneth Arrow
Kenneth Arrow’s impossibility theorem is important. As I heard the story, Mr. Arrow set out to show how modern democracy met the five criteria proving rationality and reasonableness. But, after months of work finally he concluded that it was impossible.
His conclusions were nothing new. We all know that democracy is no great ship of state. We stand on a raft, often ankle deep in water. It is really a lousy form of government; just better than anything else we have found yet.
When I was younger, as county chair pro temp of a local Libertarian party, I got to stand at the back door of the great factory and watch the sausages being made, until the odor of the process made my stomach retch and I was forced to leave.
I have left meetings angry and confused with this many-headed monster. Once I went to a church retreat where we broke up into small groups and picked someone to represent us. I was amazed at how poorly I was represented in even this small incidence of representative democracy. 
But, making decisions in groups is hard as anyone who has been married can attest. Social Choice is an important field because, if in fact Social Choice is impossible, there is no solid theoretical ground for a satisfactory version of political democracy and also any possible version of economic democracy would likewise be invalidated.
Arrow states that there are essentially two means of making decisions in a capitalist democracy: voting and the market mechanism. Arrow shows just how superior a win/win decision making process like a market mechanism is to a win/lose decision making process like democracy.
This is important information that needs to be disseminated. What is really needed is a paradigm shift in the mind of the citizen. These two decision making processes are not equal.
All democracies are not equal. What is needed is a way to distinguish the Pareto optimal of differing decisions. I know I am probably not using that term correctly. A Pareto optimal solution is one that makes people better off without making anyone worse off.
Many political decisions make a few better off at the expense of the majority. Nearly everyone believes that murder, theft, kidnapping and slavery are wrong (life, liberty, and property) and that there should be laws against it.
Fewer people feel that it is important to study the mating habits of exotic toads. What is needed is a way for people to express those preferences so, that we can move from less optimal decisions to more optimal.

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