A Voting Method Combining Range Voting with Maximizing Social Utility
Mood:  happy
Topic: Social Choice

With various voting methods, there is a method for individuals to vote, and then there is a method for combining the votes to determine the outcome of the election. For instance, with the Borda Count, all the candidates are ranked by the voters with the top ranked getting a number of points equal to the number of candidates and the bottom ranked getting 1 point. Then the votes are counted by counting the total points for each candidate, and the candidate with the most points wins. Range Voting is similar except the top ranked candidate can be assigned an arbitrary number of points usually determined by the ground rules of the election. Also 2 or more candidates can be assigned the same number of points. Then the points are counted for each candidate with the one getting the most points declared the winner. 

Computer simulations by the Center for Range Voting have shown that Range Voting is superior to other methods in that it minimizes Bayesian Regret. Bayesian Regret measures the difference between the social utility produced by the candidate whom, if he had won, would have maximized social utility, and the social utility produced by the winner as computed by the voting system used, in this case, Range Voting. The social utility is the sum over the individual utilities of all the voters. This presupposes that there is a meaningful measure of individual utility which is a foregone conclusion as far as the Center for Range Voting is concerned.

I would argue that, although there are many definitions of utility and the definition of utility used by the Range Voters is basically preference utility, it is, nevertheless, a meaningful form of utility. Each voter's utility is essentially revealed by his vote. In Range Voting with a range from 1 to 100, for example, if a voter rated some candidate a 100 and then that candidate won the election, that voter's individual utility would have been maximized. The number 100 may not have any meaning in itself, but just because it is the maximum point value that can be assigned in this example, the voter would be considered to have achieved maximum individual utility. On the other hand, if a voter rated the winner of an election as a 1, minimum utility would have been achieved by that individual.

My suggestion is this. Instead of summing point values over all individuals for all the candidates and then declaring the winner as the one with the highest point total, compute the social utility which would be the sum of the individual utilities for each candidate and declare as the winner the candidate who maximized social utility. Obviously, this system would minimize Bayesian Regret over all other systems! An individual's utility for any candidate would correspond to the point value assigned to that candidate. This system could be used for Borda Voting, Approval Voting, Plurality Voting or Range Voting. In fact, Range Voting is the generalization of Borda, Approval and Plurality. Any voter could submit his vote as a Borda, Approval, Plurality or Range Vote within the confines of Range Voting. For instance, with a range from 1 to 100, if a voter wished to be a plurality voter all he would have to do is vote 100 for some candidate and 1 for all others. For Borda, he would equally space his point values from 1 to 100 and then assign them in order of his preferences. For Approval Voting he would assign 100 points to all those candidates he approved of and 1 point to all others. Finally, for Range Voting, he would distribute point values among the candidates corresponding to his preference intensities.

Another consideration is strategic voting. Some feel that Approval or Plurality Voting within Range Voting is strategic, that really the voter has an "honest" distribution of point values over the candidates but then maximizes some and minimizes others. But how do you know that, or, more to the point, how can you assume that for the purposes of computer simulations? Maybe the maximin voter truly feels that this vote represents his true utility distribution. All the voting "system" knows is what the voter reveals by his submitted vote. You really can't tell if the vote is a strategic vote or not, so why worry about it, and why berate some method because the social utility is assumed to be lower than it would have been if all voters had voted "honestly."

The maximum social utility that can be achieved is a function of the distribution of utilities among the individual voters, the domain, if you will. Some distributions (or elements of the domain) will produce a greater social utility than others. How much social utility that can possibly be achieved depends on the distribution of utilities among the voters.

Another objection is that the computation of the maximum social utility for any election is much more complex than simply counting up the points. This is true, but it can be done and it was done in the computer simulations done by the Center for Range Voting. Otherwise, it wouldn't have been possible to calculate Bayesian Regret. In fact, these calculations can be precomputed and stored much in the way Google precomputes search results in order to speed up the search process. In addition shortcuts in the computation process may be discovered.

Arrow's Borda Count Example
Mood:  caffeinated
Now Playing: CNN
Topic: Social Choice

 

The following quotation is from "Social Choice and Individual Values," by Kenneth Arrow. We want to examine the "reasonableness" of Arrow's example of the Borda count which he maintains violates his Condition3: Independence of Irrelevant Alternatives.                                                                                                                                          

THE INDEPENDENCE OF IRRELEVANT ALTERNATIVES             27 CONDITION 3: Let R1', ... , Rn' and R1', ... , Rn'  be two sets of individual orderings and let G(S) and G'(S) be the corresponding social choice func­tions. If, for all individuals i and all x and y in a given environment S, x Ri Y if and only if x Ri'y, then G(S) and G'(S) are the same (independ­ence of irrelevant alternatives). The reasonableness of this condition can be seen by consideration of the possible results in a method of choice which does not satisfy Condi­tion 3, the rank-order method of voting frequently used in clubs.2 With a finite number of candidates, let each individual rank all the candidates, i.e., designate his first-choice candidate, second-choice candidate, etc. Let preassigned weights be given to the first, second, etc., choices, the higher weight to the higher choice, and then let the candidate with the highest weighted sum of votes be elected. In particular, suppose that there are three voters and four candidates, x, y, z, and w. Let the weights for the first, second, third, and fourth choices be 4, 3, 2, and 1, respectively. Suppose that individuals 1 and 2 rank the candidates in the order x, y, z, and w, while individual 3 ranks them in the order z, w, x, and y. Under the given electoral system, x is chosen. Then, certainly, if y is deleted from the ranks of the candidates, the system applied to the remaining candidates should yield the same result, espe­cially since, in this case, y is inferior to x according to the tastes of every individual; but, if y is in fact deleted, the indicated electoral system would yield a tie between x and z. A similar problem arises in ranking teams in a contest which is essen­tially individual, e.g., a foot race in which there are several runners from each college, and where it is desired to rank the institutions on the basis of the rankings of the individual runners. This problem has been studied by Professor E. V. Huntington,3 who showed by means of an example that the usual method of team scoring in those circum­stances, a method analogous to the rank-order method of voting, was inconsistent with a condition analogous to Condition 3, which Hunting­ton termed the postulate of relevancy. The condition of the independence of irrelevant alternatives implies that in a generalized sense all methods of social choice are of the type of 2 This example was suggested by a discussion with G. E. Forsythe, National Bureau of Standards. 'E. V. Huntington, "A Paradox in the Scoring of Competing Teams," Science, Vol. 88, September 23, 1938, pp. 287-288. I am indebted for this reference to J. Marschak.

Now we examine this example in some detail.

Let's define social utility as the sum of the individual utilities where the individual utility for an alternative is equal to the point value of that alternative according to the individual's rating. For example, in the first case individuals 1 and 2 assign a point value of 4 to alternative x, 3 to alternative y, 2 to alternative z and 1 to alternative w. Individual 3 assigns a point value of 4 to alternative z, 3 to alternative w, 3 to alternative x and 1 to alternative y. The social utility then is 10 (4+4+2) for alternative x, 7 (3+3+1) for y, 8 (2+2+4) for z and 5 (1+1+3) for w. So the winner is x.

Now we consider the case in which y is removed from the election. With the Borda count, the social utility for x is 7 (3+3+1); for z: 7 (2+2+3); for w: 4 (1+1+2). As Arrow observes, there is a tie between alternatives x and z. Although Arrow thinks that the result should still be x, if you interpret the situation that z is now considered first by one individual and second by 2 while x is considered first by 2 and third by 1, a tie between x and z is not unreasonable!

However, let us consider the above example using Range Voting instead of the Borda count. With Range Voting and point assignments between 1 and 4, the point assignments for each individual remain the same. Then the maximum social utility is 12 in both cases (including y and excluding y). The result in the first case is the same: x wins with a social utility of 10. With y removed, the social utility remains the same since the individual point values remain the same. So x still wins with a social utility of 10! With Range Voting the election is truly independent of irrelevant alternatives at least in this example. This is explored more fully in my paper, "Social Choice, Information Theory and the Borda Count."

Arrow's R Notation
Mood:  energetic
Now Playing: Cross Blogged with Will Blog for Food
Topic: Social Choice
In the arcane world of social choice, a man by the name of Kenneth Arrow looms large. In 1951 he published a book, "Social Choice and Individual Values," in which he supposedly proved that social choice is impossible. But what is social choice? Let us say we have a society composed of N individuals numbered 1,2,3, ... . Those individuals have to order a set of M alternatives with their most preferred alternative being their first choice etc. Let's indicate the alternatives as a, b, c, ... . Then a social welfare function accepts the individual orderings as inputs and produces as output the social ordering which is an ordering of the alternatives that applies to the whole society.

If individual 1 prefers a to b, we write aP1b. If society prefers a to b, we write aPb. So far so good. But we also want to provide for the case in which an individual is indifferent between a and b. We write this aI1b and aIb, respectively. Arrow's analysis then combines these two relationships into a relationship he denotes as R which means "prefers or is indifferent to" so aR1b means individual 1 prefers a to b or is indifferent between a and b. Arrow's rationale for this is the following: "Instead of working with two relations, it will be slightly more convenient to use a single relation, 'preferred or indifferent.'" (p. 12) (emphasis added)

Arrow then goes on to postulate two axioms. Axiom 1 states that either xRy or yRx and he notes that this does not exclude the possibility that both xRy AND yRx. Axiom 2 has to do with transitivity which will not concern us here. Again Arrow states (p. 13): "Axioms 1 and 2 do not exclude the possibility that for some distinct x and y, both xRy and yRx. A strong ordering on the other hand, [one with only preferences and without indifferences] is a ranking in which no ties are possible." This is blatant nonsense. One could have half the population with xPy and half with yPx [strong orderings] and that certainly would represent a tie so a tie is possible. What Arrow is implying without coming out and saying it directly is that in his world a tie between two alternatives is to be represented as a social indifference. This is completely arbitrary and limits his entire analysis.

One must assume that in Arrow's world each individual will submit his input in terms of R. That is individual 1 would submit aR1b, aR1c etc. until all pairwise comparisons have been made. For now we will go along with Arrow's demand that only pairwise comparisons need to be submitted. It can be assumed that individuals are not permitted to submit a comparison using the indifference relation since then what would be the purpose of introducing R to make the analysis "slightly more convenient." The whole idea of "slightly more convenient" is to reduce the number of relations from 2 (P and I) to 1 (R). However, Arrow proposes (without saying so) to use the I relation in the social choice to cover the case of a tie. Therefore, the social choice could be aRb, bRa or aIb.

Now the idea of the social welfare function (or of any function for that matter) is to connect each element of the domain (consisting of all possible combinations of individual choices) to an element of the range (consisting of all possible social choices). There are a great number of possible functions. Each function will hook up elements of the domain with elements of the range differently. The important thing is that each possible element of the domain is hooked up to one and only one element of the range. Arrow implies that any element of the domain that represents a tie (such as half the population having aRb and half having bRa) should be hooked up with the range element aIb. Respectfully, I disagree with this approach for the following reason: the half of the population that has aRb could actually prefer a to b (no one is indifferent), and the half of the population that has bRa could actually prefer b to a. That represents a tie to be sure, but society is hardly indifferent between the two alternatives. Arrow has confused a tie with an indifference! By so doing he has guaranteed that his analysis will yield the result that no social choice is possible.

Secondly, I would like to point out that individual information is lost when an individual submits his input as aR1b or "I prefer a to b or I'm indifferent between a and b." The system does not know which, and this introduces ambiguity at the outset. Not only that, but say an individual is indifferent between a and b. He has two ways to express it! He can submit either aR1b or bR1a. The resulting analysis becomes meaningless as the system knows not how many of the individual aRb's represent indifferences and how many of them represent preferences. Ditto for the individual bRa's! There can be no meaningful social welfare function given these kinds of inputs.

Therefore, I suggest that Arrow's approach is not acceptable and that his conclusion that social choice is impossible is invalid. A more rigorous approach is necessary involving the possibility of ties between orderings as elements of the range. One possibility of dealing with these ties is to randomly choose among them which I think my friend, Ben, at Oxford is considering as a doctoral these.

For more on this subject, please see my blog Will Blog for Food.

Issues for a Social Choice Based Political-Economic System (3): Advertising
Mood:  a-ok
Topic: Social Choice
Would there be advertising in a social choice based economy? There wouldn't be any need for advertising since advertising is done only to entice you to buy a particular product. In a capitalist society, each company is privately owned and it's in its self-interest to get you to buy their products. This incentive would not hold in a social choice based economy or Preferensism. Instead of being enticed to buy, consumers would initiate the buying process by checking out the products available, the ratings of these products and the pricing. This can be conveniently done online where even today the entire range of products ratings, suppliers and pricing is available.

In Preferensism it is of no concern to society as a whole which products are chosen since whether or not certain business enterprises prosper or flounder is of no concern except for the fact that businesses that don't produce well or don't produce products that people want will be dismantled while other businesses will be expanded or started. Society is neutral and disinterested in which particular products are bought and sold. The workers, however, cannot lose their jobs since everyone has equal access to the job market. They will be reabsorbed in other businesses.

The motive for advertising today is to get you to buy a product or service so that the provider of that product or service can prosper - not because it is the best product or service for you. In Preferensism, the goal would be to assist the consumers in making the decisions that are best for them. Preferensist society is completely neutral as to which decisions are actually made by consumers because there are no vested interests. People don't have to fear losing their jobs. Enterprises don't need to fear going bankrupt. There would be no such thing as bankruptcy only disassembling and assembling of enterprises that would be done strictly in terms of the relevance of those particular businesses to society.

How to be an intelligent consumer should be taught in school since it is something people do almost every day of their lives. Resisting advertising and doing your own research into what is actually best for you is something that is possible today. The internet has websites that do ratings of products, price comparisons, ratings of suppliers etc. Advertising is no longer necessary in order to inform consumers as to what's available. A Google query on a particular generic term will bring up all the products that are available in that area.

Social Choice and Capitalism
Mood:  incredulous
Topic: Social Choice
In another post we compared a social choice based society or preferensism to socialism. The basic dissimilarity is in the ownership of private property. In socialism most of the property is socially owned. In preferensism there are less restrictions on property ownership. It can be both individually and socially owned. The basic similarity is that individuals are compensated for their work without the need for profit. So the work involved to produce goods and services consumed both individually and collectively redounds to the credit of both workers and property owners with each citizen having an equal say in how the work and compensation for it are distributed. In this way it is similar to socialism in the sense that socialism stands for "to each according to his work." Socialism does not imply equality of compensation since some people are capable of more and better work than others. The same can be said of preferensism. However, in preferensism property owners get a say in the outcome equal to every other citizen's say whereas in socialism there are no property owners, and everyone is a worker. In preferensism some might be strictly workers, some may be worker-property owners and some may be strictly property owners.

The similarity of preferensism with capitalism is the emphasis on innovation, invention and individual initiative. Innovators and inventors should definitely be rewarded. Intellectual property such as patents, music, artwork and literary works should be rewarded. The dissimilarity with capitalism is that owners of property would not have the sole determination of how that property would be priced in the marketplace. Prices are set according to an amalgamation of all citizens' preference lists.

In preferensism corporations would not be privately owned. They would be set up and dismantled according to the demand for their produced items. The realm of private property would include real estate, natural resources, intellectual property and anything else that can be accumulated. However corporations or businesses as entities in themselves would not be considered private property since only individual persons have a right to vote. In capitalism corporations are set up with the rights of individuals. In preferensism only individual persons would have the rights of individuals.

Therefore, there would be no stock market in preferensism since there would be no privately owned companies. In capitalism even publicly traded companies are privately owned in the sense that they are not owned by all of the citizens in general but only by that group of citizens who have bought stock in that company. A business enterprise would be set up in preferensism according to the demand by the citizens for the products which that enterprise would produce. Therefore, supply would equal demand. Several competing enterprises could be set up just to keep everyone honest and to distribute the work geographically. If only one enterprise were set up, there wouldn't be any checks or balances on that one business. Several competing businesses could keep things in check. But they wouldn't be competing price wise only in terms of efficiency and quality.

So relationships among producers, consumers, workers and property owners would all be regulated in preferensism so that no one citizen had any more power over the process than any other. In capitalism lone individuals are no match for large corporations.

In preferensism the law of supply and demand would be operative but would be contained or held in check due to the fact that aggregate consumer demand would be calculated from citizens' preference lists and work assignments and business start-ups and contracts would be such as to satisfy that demand. An excess beyond consumer demand would not be produced while production insofar as is possible would equal demand. Therefore, the aggregate amount of work and consumption of resources would be minimized since nothing in excess would be produced. No one would have an advantage in the economic process in the sense that they would be able to corner a market or dictate prices. Likewise, no business would have to fear bankruptcy since the businesses as entities in themselves would be assembled and disassembled according to societal needs.

The law of supply and demand would be in balance. There would be no unemployment since everyone would have equal access to the job market. The work week would be minimized and tailored to individual wants since work would tend to be spread around among as many people as possible. There would be no gluts in the marketplace since nothing would be produced that wasn't already earmarked for consumption. There would be no overproduction and no shortages. Natural resources would be conserved since there would be no wastage or wastage would be minimized.

Not everyone would have an equal outcome. Some would be richer than others, but the gross inequality that exists in capitalism would tend to be mitigated due to the fact that instant billionaires due to IPOs would not be produced.

Issues for a Social Choice Based Political-Economic System (2): Welfare
Mood:  chillin'
Now Playing: Miles Davis
Topic: Social Choice
Unlike socialism or communism which claim to right the wrongs of capitalism, unequal distribution of wealth being among them, a social choice based system or Preferensism would not necessarily be a panacea for the ills of society such as poverty, ecological destruction or unequal distribution of wealth. Basically, since it's an extension of democracy, it would reflect the wishes of the people. If the populace wanted to collectively help poor people or those who are disadvantaged, they could do so. If they didn't want to, they could vote their preferences to do that.

The same goes for the environment. If people wanted to protect the environment, they could vote to do that and vice versa. The only qualification would be that Preferensism is not necessarily a majoritarian system. In other words it caters to minorities. So a minority could vote to help poor or disadvantaged people, and some help would be provided. Also the amount of help would be a function of the aggregate of all citizens' preference lists. Therefore, it is likely that those who want to work an extra amount in return for generating funds to help the poor or funds to ameliorate the environment could do so. How many people list these concerns how high on their list of preferences would determine the funds that would be allocated to those areas.

So it wouldn't necessarily be an up or down vote: either to help poor people or not. Chances are that funds would be mostly allocated out of the paychecks of those who have those concerns as high priorities, but little or no funds would be allocated out of the paychecks of those who don't have those concerns as high priorities.

Therefore, liberals or those who favor government help for the poor and disadvantaged could have it their way and vote to help the poor and disadvantaged. Conservatives or those who are not in favor of government helping the poor and disadvantaged could vote not to help them. The social choice function or social decision function would seek to maximize the utility of the entire population. Not everyone, of course, would get their top preference, but the system would attempt to give everyone as high a preference as possible.

There would be a variation over the entire population in terms of how much each individual would pay depending on his or her preferences. So everyone would not be "taxed" the same but only according to their preferences.

"From each according to his preferences; to each according to her preferences" subject to the maximization of utility with each person being treated the same in the process characterizes Preferensism.

Social Choice and Socialism
Mood:  hug me
Now Playing: Thelonius Monk and John Coltrane
Topic: Social Choice
What are the differences between social choice and socialism? One huge difference involves property ownership. In socialism the means of production are publicly owned. How much more than the means of production is up for grabs. For instance, would apartment buildings be publicly owned? Probably. Property ownership would be limited to personal items but would probably include cars and maybe even private houses.

A social choice based economy, on the other hand, need not have any restrictions in terms of property ownership. It could be a mixed economy with some private and some public ownership like most advanced capitalist economies. It is only the relationships among workers and property owners that are regulated in a social choice based economy at least in preferensism as we have described it. Property would be an input to the system much as work would be. However, property owners would have no more power in determining the outcomes of the system than workers since power is not determined by anything other than "one person, one vote." Each person's input to the system represnts one unit of generalized voting power where a vote consists of a list of preferences and each preference would be a combination of inputs and outputs. For example, a preference might consist of a willingness to work 30 hours a week in a certain line of work, a willingness to rent out a storefront that is privately owned by the citizen in the example and an outcome consisting of a reimbursement of $5000. per month.

In this example the citizen in question is both a worker and a property owner. Whether or not the citizen would obtain this particular preference would be determined by the preferences of other citizens. The goal in terms of society is to maximize satisfaction or utility by matching inputs with outputs to the greatest possible degree. The criticism of utilitarianism which demands the "greatest good for the greatest number" that you can't maximize two things simultaneously is really bogus since, in any imaginable society, there would be a large number of ways that utility could be maximized, and the one that would be chosen would be the one such that a measure of equality was maximized as well.

So society would try to maximize every individual's satisfaction or happiness or utility or whatever you wanted to call it treating each citizen equally and, consistent with maximizing overall satisfaction, maximizing equality of outcome as well.

In socialism workers are treated as a block. In preferensism each citizen is treated as an individual with individual outcomes reflected by his or her preference list. It is only the relationships between individual citizens that are important not whether they are property owners or workers. There are no inherent restrictions on property ownership. Only the relationships among individuals are regulated to produce the "best fit" in terms of work-consumption preferences. The demand for consumption is balanced by the supply of work and property.

Issues for a Social Choice based Political/Economic System: (1) Taxation
Mood:  lyrical
Now Playing: Jeff Tain Watts
Topic: Social Choice
There are some major issues which need to be addressed in regard to a social choice based political and economic system or preferensism as we have called it. Some (but not all) of these are the following: (1) Taxation, (2) Investment, (3) Advertising, (4) Property Ownership, (5) Innovation and Invention, (6) Welfare (7) the Environment, (8) Poverty, (9) Defense, and (10) Health Care. Preferensism is mainly concerned with the basic economic system functions of work allocation, remuneration for work and pricing and supply of consumer items and services: what is produced, who produces it and what is consumed and by whom. Also it is concerned politically with voting for candidates or alternatives. There are, however, issues outside these basic functions such as the ones listed above that need to be addressed with regard to how they would be handled in a social choice based economy.

One consequence of preferensism would be the merging of economic and political functions. Since both the economy and the political system are characterized by "one person, one vote," many functions previously thought to be strictly political, would now be subsumed in the economic realm. For instance, how much money would be devoted to the Park System, instead of being fought over by elected representatives, could now be handled directly by the populace since that would be a part of the alternative set of each individual and would be automatically integrated into the overall economic picture. There would be an increased degree of direct democracy not in terms of up or down votes of specific propositions but in terms of each individual's preferences regarding how much more would he or she be willing to work in order to fund various government functions. There would probably still be a need for some degree of representative government to cover certain functions which it would not be prudent to subject to a direct vote. The question is how much democracy is too much democracy, and should the citizenry be trusted to make all decisions by voting even if that were feasible. Should the decision to go to war, for example, be put to a direct vote of the people?

In this first blog entry dealing with this general subject, we will deal with the issue of taxation. Generally, taxation is thought of as money the government takes from us, the citizens, in order to fund the government. However, in a direct democracy such as preferensism, the question is how much longer is each individual willing to work (as reflected in their preference list) in order to fund various government functions or what are now considered to be government functions. Government functions can be thought of as consumer goods which are consumed collectively as opposed to individual consumption. Each individual can include in his preference list data as to how much he is willing to pay for a variety of societal functions. Examples could be the following: research, education, parks and recreation, mass transit, libraries, bridges, dams and infrastructure, defense and welfare.

So instead of taking money out of an individual's paycheck for taxes, each individual's work and pay schedule would automatically reflect the quantity and quality of collective as well as individual consumption. It could be thought of as working an extra amount in order to have the things that are consumed collectively. If there were no collective consumption, each individual's work week would be lessened to some extent for the same pay. Of course, there would be no need for standardized work weeks. Each individual would decide how much he would prefer to work in exchange for his or her individual standard of consumption. Some individuals might prefer to work less and have less, for example. Bear in mind that each individual would not necessarily get his first preference. The goal would be to maximize utility or satisfaction in society and to achieve the best "fit" given individual inputs. As in all democracies, there would be trade-offs both economic and political. In general it would be hard to envision how those who wanted to work more and consume less could not be accommodated while those who wanted to consume more and work less might not always be accommodated. The best fit need not mean that everyone put in the same amount of work either for items consumed individually or collectively - just that the individual's work-consumption schedule reflect his or her individual preferences and tastes and each person's input would be treated the same as every other's. In other words each person would have the same amount of political-economic power: "one person, one political-economic vote."

So taxation need not be considered as a separate entity outside the system or as an "add-on" to the system, but would be subsumed in each individual's preference list. Each individual would have one political-economic vote in such a way that minorities (down to the level of individuals) would be accommodated to the greatest extent possible. There need not be majority rule in most situations since most issues are non-binary. If the wishes of a thousand subsets of the population can be accommodated, why only accommodate the wishes of the majority? There would be individually-tailored solutions not "one size fits all" both politically and economically and to a large extent politically-economically.

Workability of a Social Choice Economy
Mood:  incredulous
Now Playing: Ryan Kisor
Topic: Social Choice
For a Social Choice Economy to be feasible, it must be workable or have user friendliness. It must expedite the choices individuals make in a real world capitalist economy. The basic decisions of an economy have to do with work and consumption. In the most simplistic terms you work, you get paid, you take the money and go out and buy things, and there are a lot of things you can buy, a lot of things to spend your money on, a large number of choices. A Social Choice economy has to be at least as workable as a capitalist economy in terms of the ease of use and the number of choices available.

According to Arrow, each individual in a Social Choice economy expresses his or her preferences over a number of work-commodity bundles, and then all this information is amalgamated to reach a social decision as to what to produce, how much of each commodity and service to produce, work assignments for each individual and the distribution of each commodity and service to individuals. Obviously, this is cumbersome.

What would serve the individual best is first work placement according to his or her preferences. Obviously, this service could expedite work placement over the current system. As far as consumption is concerned, it is far less likely that an individual would be willing to take the time to sit down and make out a preference list of commodity bundles. He would rather just go to a store or make a purchase over the internet without having to specify in advance what he or she wished to purchase.

However, the total production in a society for toothpaste, for example, can be predicted by monitoring past consumption. Also survey techniques can be used to predict consumer trends. Therefore, each individual would not have to be polled regarding his or her consumer preferences. Production can be predicted for each commodity and service, and also for new commodities and services.

Therefore, the social decisions that would have to be made would have to do with the work assignments for each individual, how much they were to be paid, and how much of each commodity and service would be produced. The goal would be to come as close as possible to an economy in which production matched consumption (no surpluses or shortages), and the work was distributed among the populace in such a way as to maximize job satisfaction as measured by each individual's stated work preferences. There is an implication that pricing of commodities would correspond to the consumers' ability to buy them according to their predicted consumption and predicted income.

Note that in a strict Social Choice sense, the alternative set would be time varying with new alternatives becoming available and old alternatives becoming unavailable on practically an instantaneous basis. The Social Choice dilemma of what to do if one alternative is dropped from the alternative set (the Principle of Independence of Irrelevant Alternatives) becomes magnified beyond belief. Obviously a practical system has to deal with this in as good a way as possible.

Since I believe that Social Choice is possible as opposed to those who believe in Arrow's Impossibility Theorem, I think a system can be devised which deals with 1) instantaneous changes in the alternative set; 2) instantaneous changes in the number of participants; 3) incomplete information regarding individual preferences; 4) probabilistic information.

Therefore, I believe an algorithm can be devised which maximizes satisfaction or utility in society in an economy which would resemble in most respects, as far as the individual worker-consumer is concerned, an advanced capitalistic economy. A supercomputer would process an enormous amount of data to achieve work and consumption outcomes which result in a harmonious society as far as both work and consumption are concerned.

Would there be money in a social choice economy?
Mood:  spacey
Topic: Social Choice
Arrow says in "Social Choice and Individual Values": "In the present study the objects of choice are social states. The most precise definition of a social state would be a complete description of the amount of each type of commodity in the hands of each individual, the amount of labor to be supplied by each individual..." and various other things such as collective activity, municipal services and "the erection of statues to famous men."

The social choice then would be the amalgamation of all the individual choices in some optimum way. The question is would everybody work in order to receive a commodity bundle or would individuals get paid in money (euros, dollars, pounds etc.) for their work and then purchase their commodities on the open market? It seems that any practical social choice economy would have to be a money rather than a barter economy. People would get paid in currency and then purchase their goods on the open market. But wouldn't this invalidate the purpose of social choice? After all, it is supposedly assumed that all the individual labor bundles would add up to exactly produce all the individual commodity bundles.

My answer is that social choice could still work in a money economy. There would have to be a translation of each commodity bundle into an amount of currency. Workers would get paid in currency exactly the amount that it would take to purchase their socially chosen commodity bundle. Of course they would be free to spend their earnings as they saw fit which would presumably and hopefully have some realistic and meaningful relationship to the commodity bundle they selected in their preference ordering. To the extent that there is not an exact correlation there will be a surplus or deficit of production which can be anticipated and corrected over time.

Looked at in this way the individual preference orderings and the social choice are more in the manner of a survey than an exact prescription insofar as the amount of goods and services produced.

How is the currency value of a commodity determined and how would the exchange rate be determined? The currency value of a commodity could be determined in various ways one of which would be based on the cost of production compared to other commodities. The exchange rate could be determined as it is today by floating the currency against other currencies.

The general idea is that a social choice economy would have to function in many ways as a general capitalist economy functions today. I doubt if many people would accept an economic system in which their commodity bundle was predetermined even if by their own preferences, and they weren't free to change their mind and spend their money as they pleased.