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Quotation of the Day…

… is from page 30 of the late, great UCLA economists Armen A. Alchian’s and William R. Allen’s Universal Economics (2018; Jerry L. Jordan, ed.); this volume is an updated version of Alchian’s and Allen’s pioneering earlier textbook, University Economics; at the end of each chapter, Alchian and Allen offered a list of brilliant questions, each with an answer; this quotation is from the “Questions and Meditations” section of Chapter 2:

What is nonsensical about the proposition, “A good economic system maximizes the welfare of the maximum number of people”?


Only one quantity can be maximized subject to all others being held at specified levels. You can maximize the welfare of one person provided that the welfare of each of the other people is unchanged.

DBx: Yep.

The moment we admit into consideration the welfare of a second person who potentially interacts, directly or indirectly, with the first person, the literal maximization of the first person’s welfare is no longer ethically desirable. If maximizing the first person’s welfare were truly the goal, then the second person must disregard his or her own welfare and act exclusively as a means of assisting the first person to achieve maximum welfare. The second person, in effect, would be the first person’s slave.

Once the welfare of the second person is admitted to be desirable, we encounter the necessity of making trade-offs. Although very often cooperation of person one with person two enables both persons to increase their welfare, neither person gets all the gains from the cooperation. The gains are shared.

More generally, whenever there are multiple goals, to speak of maximization masks the necessity of trade-offs among these goals. Goal B can be achieved more fully only if we accept a less-full achievement of goal A, or of goals A and C.

If society were a single, sentient entity in the way that you are a single, sentient entity, it would be meaningful to speak of society making these trade-offs among all the many different goals in a way that results in maximum possible satisfaction (“maximum utility”) for society.

But despite much loose language and bad theorizing, society isn’t a single, sentient entity. Society, as such, has no mind, no preferences, no purposes. These are all had only by each member of society – a reality that isn’t altered one bit by the fact that cooperation among members of society enriches everyone. Nor is this reality altered by the fact that the preferences of each of us are heavily influenced by the details of the society in which we live. And nor is this reality altered by the fact that each of us cares what other people think about us and typically act accordingly.

This reality remains: Society, as such, has no mind, no preferences, no purposes. Talk of “maximizing social welfare” or “utility” thus misleads more than it enlightens. Such talk too easily leads to the conception of society as confronting challenges all of which can be “solved” in an engineering – in a scientific – manner.

Consider the current hysteria over Covid-19. Many people talk as if the goal is to maximize our protection from Covid. If this goal were real, then every action inconsistent with reducing anyone’s risk of suffering from Covid would be inappropriate. All action and all resources would be turned toward reducing humanity’s encounter with Covid. There would be no trading-off the benefit of any potential reduced risk of encountering Covid against the benefit from action that raises that risk.

But of course even those persons who are most fearful of Covid don’t fully act in this manner. I doubt that anyone sleeps in a Hazmat suit and refuses to remove the suit even to bathe. Each person makes trade-offs. And just as it is officious and illiberal for Jones to sit in judgment of the manner in which Smith trade-offs the benefits that he gets from exercising against those that he gets from lounging lazily, it is officious and illiberal for Smith to sit in judgment of the manner in which Jones trades-off the benefits she gets from taking steps to reduce her exposure to Covid against the benefits she gets from pursuing activities that raise her Covid risk.

Yes, yes, yes – I understand that whenever Jones takes actions that increase her risk of encountering Covid – or even refuses to take actions that reduce such risk – she thereby increases the risk that she will expose unwilling others to Covid. But while there has been some adult talk of the ability and responsibility of these others to protect themselves, such talk hasn’t featured prominently in the public debate over Covid. The overwhelming assumption – as revealed by the ignorant hostility to the Great Barrington Declaration – has been that the importance of having every person reduce his or her exposure to Covid, even on very small margins, is so great that government is entitled to force all of us to remain separated indefinitely from each other.

Maximizing the risk reduction from Covid-19 is now regarded by many people to be humanity’s chief goal, one that takes precedence over almost any other.

It’s madness. It’s a lethal obsession. It’s inhuman and inhumane. It’s contrary to the way that each of us lives our daily life. It’s Covid Derangement Syndrome.