Development as Freedom (13 page)

This approach has the advantage of not requiring that we undertake the difficult exercise of comparing different persons’ mental conditions (such as pleasures or desires), but correspondingly, it closes the door
altogether
to the possibility of direct interpersonal comparisons of utilities (utility is each individual’s separately scaled representation of her preferences). Since a person does not really have the option of becoming someone else, interpersonal comparisons of choice-based utility cannot be “read off” from the actual choices.
²⁰

If different persons have different preferences (reflected in, say, different demand functions), there is obviously no way of getting interpersonal comparisons from these diverse preferences. But what if they
shared
the same preference and made the same choices in similar circumstances? Admittedly, this would be a very special case (indeed, as Horace noted, “there are as many preferences as there are people”), but it is still interesting to ask whether interpersonal comparisons can be made under this very special assumption. Indeed, the assumption of common preference and choice behavior is quite often made in applied welfare economics, and this is frequently used to justify the assumption that everyone has the same utility function. This is stylized interpersonal utility comparison with a vengeance. Is that presumption legitimate for the interpretation of utility as a numerical representation of preference?

The answer, unfortunately, is in the negative. It is certainly true that the assumption that everyone has the same utility function would yield the same preferences and choice behavior for all, but so would many other assumptions. For example, if a person gets exactly
half
(or one-third, or one-hundredth, or one-millionth) of the utility from every commodity bundle that another person gets, both will have the same choice behavior and identical demand function, but clearly—by construction—not the same level of utility from any commodity bundle. More mathematically, the numerical representation
of choice behavior is not unique; each choice behavior can be represented by a wide set of possible utility functions.
²¹
The coincidence of choice behavior need not entail any congruence of utilities.
²²

This is not just a “fussy” difficulty in pure theory; it can make a very big difference in practice as well. For example,
even if
a person who is depressed or disabled or ill happens to have the same demand function over commodity bundles as another who is not disadvantaged in this way, it would be quite absurd to insist that she is having the same utility (or well-being, or quality of life) from a given commodity bundle as the other can get from it. For example, a poor person with a parasitic stomach ailment may prefer two kilos of rice over one, in much the same way that another person—equally poor but with no ailment—may, but it would be hard to argue that both do equally well with, say, one kilo of rice. Thus, the assumption of the same choice behavior and same demand function (not a particularly realistic presumption, anyway) would provide no reason to expect the same utility function. Interpersonal comparisons are quite a distinct matter from explaining choice behavior, and the two can be identified only through a conceptual confusion.

These difficulties are often ignored in what are taken to be
utility comparisons
based on choice behavior, but which amount, at best, to comparisons of “real incomes” only—or of the
commodity basis
of utility. Even real-income comparisons are not easy when different persons have diverse demand functions, and this limits the rationale of such comparisons (even of the commodity basis of utility, not to mention utilities themselves). The limitations of treating real-income comparisons as putative utility comparisons are quite severe, partly because of the complete arbitrariness (even when demand functions of different persons are congruent) of the assumption that the same commodity bundle must yield the same level of utility to different persons, and also because of the difficulties in indexing even the commodity basis of utility (when demand functions are divergent).
²³

At the practical level, perhaps the biggest difficulty in the real-income approach to well-being lies in the diversity of human beings. Differences in age, gender, special talents, disability, proneness to illness, and so on can make two different persons have quite divergent opportunities of quality of life
even when
they share exactly the same commodity bundle. Human diversity is among the difficulties that
limit the usefulness of real-income comparisons for judging different persons’ respective advantages. The different difficulties are briefly considered in the next section, before I proceed to consider an alternative approach to interpersonal comparison of advantages.

We use incomes and commodities as the material basis of our well-being. But what use we can respectively make of a given bundle of commodities, or more generally of a given level of income, depends crucially on a number of contingent circumstances, both personal and social.
²⁴
It is easy to identify at least five distinct sources of variation between our real incomes and the advantages—the well-being and freedom—we get out of them.

These different sources of variation in the relation between income and well-being make opulence—in the sense of high real income—a limited guide to welfare and the quality of life. I shall come back to these variations and their impact later on in this book
(particularly in
chapter 4
), but there must be some attempt before that to address the question: What is the alternative? That is the question I take up next.

The view that poverty is simply shortage of income is fairly well established in the literature on the subject. It is not a silly view, since income—properly defined—has an enormous influence on what we can or cannot do. The inadequacy of income is often the major cause of deprivations that we standardly associate with poverty, including starvation and famines. In studying poverty, there is an excellent argument for
beginning
with whatever information we have on the distribution of incomes, particularly low real incomes.
²⁸

There is, however, an equally good case for not
ending
with income analysis only. John Rawls’s classic analysis of “primary goods” provides a broader picture of resources that people need no matter what their respective ends are; this includes income but also other general-purpose “means.” Primary goods are general-purpose means that help anyone to promote his or her ends, and include “rights, liberties and opportunities, income and wealth, and the social bases of self-respect.”
²⁹
The concentration on primary goods in the Rawlsian framework relates to his view of individual advantage in terms of the opportunities the individuals enjoy to pursue their respective objectives. Rawls saw these objectives as the pursuit of individual “conceptions of the good,” which would vary from person to person. If, despite having the same basket of primary goods as another (or even having a larger basket), a person ends up being less happy than the other person (for example, because of having expensive tastes), then no injustice need be involved in this inequality in the utility space. A person, Rawls argued, has to take responsibility for his or her own preferences.
³⁰

The broadening of the informational focus from incomes to primary goods is not, however, adequate to deal with all the relevant variations in the relationship between income and resources, on the one hand, and well-being and freedom, on the other. Indeed, primary goods themselves are mainly various types of general resources, and the use of these resources to generate the ability to do valuable things is subject to much the same list of variations we considered in the last
section in the context of reviewing the relationship between income and well-being: personal heterogeneities, environmental diversities, variations in social climate, differences in relational perspectives and distribution within the family.
³¹
Personal health and the capability to be healthy can, for example, depend on a great variety of influences.
³²

An alternative to focusing on means of good living is to concentrate on the
actual living
that people manage to achieve (or going beyond that, on the
freedom
to achieve actual livings that one can have reason to value). There have, in fact, been many attempts in contemporary economics to be concerned directly with “levels of living” and its constituent elements, and with the fulfillment of basic needs, at least from A. C. Pigou onward.
³³
Beginning in 1990, under the pioneering leadership of Mahbub ul Haq (the great Pakistani economist, who died suddenly in 1998), the United Nations Development Programme (UNDP) has been publishing annual reports on “human development” that have thrown systematic light on the actual lives lived by people, especially by the relatively deprived.
³⁴

Taking an interest in the lives that people actually lead is not new in economics (as was pointed out in
chapter 1
). Indeed, the Aristotelian account of the human good (as Martha Nussbaum discusses) was explicitly linked to the necessity to “first ascertain the function of man” and then proceeded to explore “life in the sense of activity” as the basic block of normative analysis.
³⁵
Interest in living conditions is also strongly reflected (discussed earlier) in the writings on national accounts and economic prosperity by pioneering economic analysts, such as William Petty, Gregory King, François Quesnay, Antoine-Laurent Lavoisier and Joseph-Louis Lagrange.

It is also an approach that much engaged Adam Smith. As mentioned earlier, he was concerned with such capability to function as “the ability to appear in public without shame” (rather than only with real income or the commodity bundle possessed).
³⁶
What counts as “necessity” in a society is to be determined, in Smithian analysis, by its need to generate some minimally required freedoms, such as the ability to appear in public without shame, or to take part in the life of the community. Adam Smith put the issue thus: