SOCIAL CHOICE How Nations (May) Decide on Distributions within Society

« SOCIAL CHOICE How Nations (May) Decide on Distributions within Society Outline (with possible number of 90-minute lectures in parentheses) 1.

Description and Comparison of Existing Social Systems (3) 1.1.

Examples of Different Constitutions and Voting Rules 1.2.

Historical and Social Explanations 2.

Social Contract Theory (10) 2.1.

Introduction 2.2.

Philosophical Foundations 2.3.

Economic Foundations 2.4.

Norms 2.5.

Justice, Equity and Equality 3.

Social Welfare Functions (10) 3.1.

Introduction 3.2.

Consumption and Production 3.3.

Utility 3.4.

Income 3.5.

Compensation 4.

Voting (6) 4.1. 4.2. 4.3. 4.4. Introduction Majority systems Proportional systems Committees 5.

Conclusions (2) Carmen Pasca John Hey 1 Preamble The course as a whole is concerned with how societies choose, not only over political and social issues but also over economic issues.

The course concentrates on the economic implications of political and social decisions.

It begins with an overview of different social systems and gives some historical background concerning the evolution of the systems over time.

The course then goes on to consider the philosophical considerations underlying considerations of the distribution of political, social and economic power, before turning to more specifically economic interpretations of these political concepts.

We discuss different formulations of social welfare functions, through which policies can be compared before implementation. Crucial to the actual operation of government is the way in which governments are elected and the way in which decisions are implemented within government.

Such issues concern the voting rules in society and in government.

As a whole, the course provides an overview and analysis (descriptive, historical and theoretical) of the principles lying behind social choice systems in the real world. Detailed Structure 1.

Description and Comparison of Existing Social Systems 1.1.

Examples of Different Constitutions and Voting Rules This section consists of a discussion of the main (constitutional and unconstitutional) systems in operation throughout the world, with a description of the structure of the constitution (and the rights and duties of citizens) in the case of constitutional democracies and the implicit rights and duties in non-constitutional systems.

For many years, the political organization of states was founded on customs and traditions, but their political legitimacy in the modern sense was virtually nonexistent.

With the Enlightenment came the idea of popular sovereignty; this caused a significant change of the political order.

The foundation and the modalities of power were established.

This view of popular sovereignty was formulated by the American colonies at the time of their independence in the Preamble to the US Constitution of 1787. The oldest written constitution is that of the U.S.

and is concerned with the relationship between the central government and local authorities. Some countries, like New Zealand, the United Kingdom and Israel, have unwritten constitutions, based on morals.

The emergence of constitutions has often been historically linked to periods of crisis: independence, revolutions, coup d'etats, and serious political crises. 2.2.

Historical and Social Explanations This sub-section gives a brief account of the evolution of the constitutional and unconstitutional norms in society from a largely 2 historical perspective.

A good example is the case of France (see Gentile (2005)).

As is evidenced by history, every new French republic has brought a new constitution.

The original French Constitution was based on a declaration of the rights of the individuals in society.

The French Constitution today is based on the founding principles: political freedom, equality between citizens, solidarity and brotherhood, the defence of the weak and political and social progress. 2.

Social Contract Theory 2.1.

Introduction It should be noted that the distinction between section 2 and section 3 is somewhat blurred, as they both concern similar problems.

The distinction that is made in this course is that section 2 is concerned more with general philosophical principles while section 3 is more concerned with practical (specifically economic) issues.

As Wikipedia notes “Social contract theory describes a broad class of ...

theories whose subjects are implied agreements by which people form nations and maintain a social order.

Such social contracts imply that the people give up some rights to a government and/or other authority in order to receive or jointly preserve social order”.

This section concerns the kinds of agreements that are made in different societies.

This first sub-section defines the issues to be discussed and the framework in which they will be discussed. 2.2.

Philosophical Foundations The core idea of Social Contract Theory concerns the moral and political obligations of the state and of the citizens of that state.

Social Contract Theory has its roots in the Greek philosophical tradition.

Plato and Socrates stressed the importance of the relationship between the citizens and the laws of the country.

Plato (see, for a translation into English Bloom (1991)), in his dialogue La Repubblica, Plato (1992), explained the nature of justice in the Social Contract.

According to Plato, justice, and conventional laws and agreements, are there to prevent individuals committing injustices against others.

Socrates gave greater importance to the state in that it creates a Social Contract with the citizens of the state: he argued that the state represents the fundamental political and moral principles on which justice is based.

The modern idea of a Social Contract dates back to Hobbes (for a modern commentary see Rogers (1995)), Rawls (1971) and Rousseau (1968).

Hobbes based his theory of a Social Contract on a hypothetical brutal State of Nature in which men live in fear of their lives.

This State of Nature does not encourage individuals to cooperate, nor does it guarantee long-term conservation and the satisfaction of the citizens’ needs or desires.

He argued that 3 people are primarily self-interested but that a rational assessment of the best strategy (to achieve the maximization of their self-interest) will lead them to act morally (moral standards are determined by maximization of mutual interest).

The existence of such a state is possible because men are rational and recognize that the laws of nature show the way to create a civil society.

Citizens accept that they have to live together under the common law, respecting the original contract which creates a sovereign state with absolute authority.

For Locke (2003), in the State of Nature (see Yolton (1969), all men are equal and enjoy a freedom without limits. Unlike Hobbes, Locke, did not believe that men give up to the state all their rights, but required that they get justice for themselves.

The state cannot affect the natural rights, lives, properties and conventions of the Social Contract.

In Two Treatises on Government, he proposed a model contract which was against the doctrine of divine right and created the origin of political power as a pact between individuals.

According to Locke, after creating a political society, the State created a situation in which the citizens got three things that were missing in the original State of Nature: laws; judges to adjudicate laws; and the executive power necessary to enforce these laws.

Rousseau (see Bertram (2003)) has two distinct theories of Social Contract: the first contains his overview of the Social Contract; and the second the rules of this Social Contract.

With respect to the former, Rousseau, in his speech on foundations of origins of the inequality between men, describes the historical process by which citizens begin in an original State of Nature, and over time move towards a civil society.

With his Social Contract Rousseau (1762) outlines a model of political coexistence within which the individual obeys the law and yet remains free.

Many would argue that this is impossible – to the extent that the law, rather than an expression of absolute sovereignty, instead expresses the general obedience to it.

According to Rousseau, in the general will, which has as its purpose the interest of the individual over community, the identity of each is identified with the identity of all. 2.3.

Economic Foundations In his Theory of Justice, the philosopher Rawls (1971) advances a theory of a Social Contract at the highest level of abstraction.

His theory argues against utilitarianism, which requires the measurement and interpersonal comparison of utilities (happiness or welfare).

The object of the Contract (see Gauthier (1990)), is not the establishment of political sovereignty, but a statement of the principles of justice in a well-ordered society.

His theory of Social Contract follows Kantian lines: rationality requires respect for individuals and for moral principles that can be justified for each person.

Its point of departure is an initial position of equality, which prevents arbitrary factors influencing the moral point of view about the distribution of benefits and costs of social cooperation.

Acting behind a 4 "veil of ignorance", individuals determine their rights and obligations.

In contrast, the economist Sen starts with the idea of social progress (Dutta (2002)), and presents a critique of utilitarianism and the implied theory of welfare.

In his analysis of inequality, Sen starts with the principle that the state should not consider only those individuals who have resources. It must also take into account their ability to use their wealth to choose their own way of life.

Sen’s theory is built on the concept of functional capabilities.

Functional capabilities refer to what individuals can achieve with their resources.

At the descriptive level, this definition of functional capabilities sees poverty as a deprivation of the ability to survive and not only as a shortage of income.

At the regulatory level, this idea can be interpreted as a new basis for the principles of equal and justice.

The egalitarianism of Sen serves as the principle of equal basic functional capabilities.

In the field of Social Choice theory, Sen (1972) proposes the use of interpersonal comparisons of welfare as a way of constructing a theory of Social Choice.

(It should be noted that Arrow (1963), in his famous Impossibility Theorem, shows that it is impossible to aggregate individual preferences into a social preference, if interpersonal comparisons are not permitted.) According to Sen, using interpersonal comparisons is the only way to formalize considerations of equal justice. Giving up these interpersonal comparisons of utility removes the possibility of taking inequality into account. 2.4.

Norms In most societies norms of behaviour are observed (see Elster (1989) and Akerlof (2000)).

A Social Norm is a social rule adopted by a social group.

The rules.... »