Social Choice and Individual Values: A Lokean Inquiry
Abstract
Social Choice and Individual Values is a classic monograph by Kenneth Arrow (1921–2017), published by the National Bureau of Economic Research in 1951. In this monograph, Arrow argued that "rational" social choice is impossible under "capitalist democracy." Rationality requires transitivity in preference ordering, but this breaks down when voters are permitted to make pairwise comparisons among more than two options and two voters. In more specific terms, Arrow argues that a Social Welfare Function - determined through aggregating individual preferences - cannot satisfy five "natural conditions:" (i) Unrestricted Domain, (ii) Pareto Property, (iii) Independence of Irrelevant Alternatives, (iv) Nondictatorship, and (v) Transitivity. Therefore, rational social choice is impossible under a "capitalist democracy." Arrow's authority has been disputed in this paper. First, the so-called "voting paradox" does not exist in Arrow's model. Second, the causal relations established by artificial concepts cannot explain matters of fact. Finally, the transitivity rule breaks down in matters-of-fact reasoning. Arrow did not explain why this assumption is necessary for the voting system to be democratic.
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