In this post we have material related to a seminar on social welfare functions that Abba Lerner gave on at least two occasions in the fall of 1952–once at the I.M.F. and once at the Cowles Commission. The three items transcribed below come from a single folder in the “Abba P. Lerner Papers” at the Library of Congress, Manuscript Division. The first two items are typed notes Lerner kept for himself followed by a page of handwritten notes that presumably were his presentation notes (his class lecture notes are seldom, if ever, more than a page per lesson and often no more than a list of key words). Where I have been forced to guess a word, I use boldface. Simple typos and spelling mistakes have been corrected without fanfare, Lerner was a pretty lousy typist.
Transcribed notes for Abba Lerner’s five lectures about labor (1949) can be found in an earlier post.
__________________________
SOME ASPECTS OF WELFARE ECONOMICS
IMF 9-19-52
[Lerner’s own typed notes, followed by handwritten notes]
Western Humanism—Efficient use of resources for satisfying human wants.
adding utilities, measuring utility, complementarity, weighting
For analysis avoid by indifference curves, more generally, by ordering
For Welfare Economics avoid by social welfare function also an ordering.
Democracy means deriving social decision from individual preferences.
Bergson and Samuelson seem to suggest possibility of getting social ordering from individual ordering
Arrow on the derivation. The Paradox.
More generally. Five conditions. Free choice, positive, irrelevance non-dictatorial, non-imposed.
Serious for Democracy how much consensus is needed? (Single peaked pref[erences]s.)
Much Math. Reviewers gingerly defer and repeat the paradox.
Too loose. Too severe. at the same time.
Voting is weighting. cf. “unweighted index numbers” voting excluded.
If voting should be consistent. 1+1 =1. (single peaked prefs avoid the triangle)
The third postulate. Men, not preferences, born free and equal.
Majority rule not = democracy. (tho not minority rule)
must be checked for significance of the preference to the individual.
PR [preference revelation?] as concentrating of voting.
Scale of ordering.-1-100 (voting by differences between votes)
Republican Editorial after Democratic Conference.
Must weigh individuals. Must allow individuals to weigh their preferences.
voting and pricing
[Bottom half of paper has the following handwritten notes:]
Social Welfare Function vs. process for social division.
One Commodity World
|
|
A | B | C | Total |
| x | 3 | 1 | 2 |
6 |
|
y |
2 | 3 | 1 | 6 |
| z | 1 | 2 | 3 |
6 |
the middle one cannot be the worst
“indifference” [not the same as] “cannot say”
consensus about rules, not content
values vs. prefs?
__________________________
Social Welfare Functions
Discussion at Cowles Commission 10-9-52
[Lerner’s own typed summary of comments he received]
The essence of Democracy is not giving everybody equal influence or voting power but the recognition of uncertainty so that policies can be corrected. Not the determination of policy but the election of official to whom authority can be delegated. Houthakker.
How can the greater needs of some be protected? One cannot rely on those majorities who care little about anything being prevented from oppressing minorities by devoting only a little of their voting power to the oppression—what if there are not many decisions but only one which matters very little to the majority but is very important to the minority? Koopmans
The conditions for a successful democracy do include some restrictions on the preference of the members of society. If conflicts are so strong that they mean more than the preservation of the unity of the society or the keeping of the rules then the democracy cannot persist. Koopmans
Arrow’s third postulate is unnecessarily strong. His purpose would be served by having a social welfare function derived from some set of “complete” private orderings which would then continue to be used even when some of the alternatives have disappeared. Chairman
Economics is where division between the satisfaction of the desired of different individuals is possible. Each can then get (buy) what he wants without this affecting others. Where there is an indivisibility or a non-separability of the effects on different individuals we have political rather than economic problems. Discussion after the meeting with Colin Clark.
Where there is indivisibility we have to have government and must sacrifice freedom. Colin Clark
Source: Library of Congress. Manuscript Division. Papers of Abba P. Lerner, Box 21, Folder 5 “Welfare Economics, Undated”.
__________________________
The following handwritten sheet was not stapled to the previous two which were stapled together, but it does have what appear to be matching staple holes, as if the notes had been taken and used for another lecture at some other time.
Welfare Economics—Social Welfare Functions
[Lerner’s handwritten notes
(boldface indicates uncertain transcription)]
Present concerns—Sustaining Forces—Psych[ological] Warfare
deeper to Basic Ec[onomic] Analysis, Basic Political Philosophy.
Keynes, Adam Smith Wilson, Jefferson, Socrates
Democratic Society. Voting. Arrow Paradox. Social ordering from individual orderings.
Is democracy possible? (Single peaked pref[erence]s, single commodity)
Political Ec[onom]y—Welfare Economics—preferred in to “Economics”.
conforming
Summation & Measurement of U[tility]. Social Welfare Function. Social States
Behaviorism + ordering OK.
If no comparison unanimity reasoning. voting means comparing – weighting.
Analyze paradox — inconsistent w[eigh]ting 1 + 1 = 1. (all preferences born equal)
(unweighted)
1 + 1 = 2 give rank ordering (not reasonable—adjust pref[erence]s equal)
diff[erent] low votes is the influencing power not [number] of votes (cf P.R. [preference revelation?] etc) or majority rule
add cardinal utilities (which must also be comparable) to get social ordering
How much for each individual? How democratic
S.W. Function really impor[tant]. But do we need one?
All we need is a democratic decision
Equal influence — given a democratic result
Principle of relevance—different use of voting power. Not a S.W. Function
Inconsistency ceases to be irrational—diff[erent] circumstances
(games, influence, voting, force, smudged-word)
Over-ambition—cf compensation issue “can’t tell” or “indifference”
output and distribution.
Democracy depends on multiplicity of items.
Consensus + Possibility of Democracy.
Source: Library of Congress. Manuscript Division. Papers of Abba P. Lerner, Box 21, Folder 5 “Welfare Economics, Undated”.
__________________________
From the Cowles’ record of Commission Seminars
| Oct. 9 [1952] | Abba P. Lerner, Roosevelt College, “Social Welfare Functions” |
Source: Yale University. Cowles Foundation for Research in Economics. Webpage: Commission Seminars, 1943-1955.
Image Source: Publicity photo of Abba Lerner as Guest Speaker February 25, 1958 in the Beth Emet 1958 Forum. Library of Congress. Papers of Abba P. Lerner, Box 6, Folder 8.