QuoteOriginally posted by: crmorcomQuoteIs it true we cannot compare utilities or aggregate them into a social welfare function?Yes, for sure: we can and we do. How do "we" (I don't know whom you represent, but that "we" sure does not include me) compare and aggregate individual utilities?QuoteWhy would you think that we cannot? An individual's utility is his ordinal preferences. Excuse my ignorance, I do not know a basis or rule upon which to compare two person's preferences. Would you enlighten me?QuoteYou seem to imply that by relying on nothing but property rights and contract law we are not comparing utilities, but that is completely false....You are pretending you are not making this value judgement by hiding the issue behind property rights, but you are comparing utilities nonetheless.I do not know how I compared utilities of say, two people. Maybe you can illuminate, precisely, how I have performed the miracle.

knightrider,To paraphrase your previous postings, you seem to believe that some (minimal) system of property rights and contract law is a "best" system. That may be true - though it is not an issue we are likely to settle here.The issue I have is that you seem also to believe that your position is, at least partly, justified by your thinking that it is somehow "natural" or that it doesn't compare utilities. This is not true.In the state of nature (call it what you will), there are no property rights and no contract law. It comes down to how nifty you are with your opposable thumbs and your flint axe. There is nothing natural, minimal or inevitable about property rights whatsoever. For what it's worth, most early human societies had either some form of collective ownership or - rather ironically, I guess - full "ownership" by a full-blown Nozickian utility monster a.k.a. king/emperor/chief/etc.To decide that your social contract should include exclusive property rights in the classical form that makes everything nice for Mr Coase, you are implicitly saying that you value the utility of the people who already have de facto control of the assets above those who do not: you are constructing a social welfare function whether you like it or not. For example, when you endorse a legal process that encloses common land and expropriates peasants of their right to farm/graze parts of it you are, absolutely, comparing the peasants utility against that of the landowner. You may justify it by saying that common land is inefficient and that you are eliminating dead-weight loss. That may well be true, but you are redistributing wealth and to judge that your outcome is "best" or "superior" in any sense means that you must explain why it is better that you are making the peasant unhappy and the landowner happy - you have to compare their utilities. The same is true, of course, in reverse: if I collectivize farms in 1920s Russia, I am comparing utilities, too (and killing rather a lot of people, but that's another story).Just because something is done implicitly doesn't mean it is not happening.

I don't know if you are just being anal or fail to understand such a simple point. So again: some people will be made better or worse off. Let's say you are god and you know exactly how everyone is made better or worse off. There is some ideal set-up unknown, and perhaps unknowable but to god. Now what you did is impose some arbitrary set-up and say 'hey look my solution does not require the difficult or impossible task of figuring out the ideal set-up, problem solved' What you have done is essentially ignored the real problem of figuring out the ideal set-up. As I said assigning a hereditary rights, only allowing a king and his sons to ride the train is another set-up that appears to solve the problem but really ignores it. What is it about this point that you don't get?