The Economics of Enough_ How to Run the Economy as if the Future Matters - Diane Coyle [114]
A different take on the “impossibility theorem” of social welfare comes from Michael Sandel, the eminent Harvard philosopher. He sets out three fundamentally different approaches to the idea of justice. In his book Justice he describes approaches to ethical questions based on utilitarian principles, principles of liberty, and principles based on the idea of civic virtue. Utilitarianism asks what choices will add most to the well-being of the largest number of people. It underpins economics and has great power as a lens for making the kind of trade-offs that pervade economic decisions, but can ride roughshod over the rights and ethical claims of individuals who are not part of the majority. Philosophies of freedom have brought our modern focus on individual rights, and there’s no doubt that the priority given to freedom and individual choice in modern political theory and practice has been hugely beneficial. Amartya Sen is one of the prominent advocates of this approach to social welfare. A third approach—and the one preferred by Sandel himself—emphasizes the role of civic virtues as a guide for social choices. Neither the greatest happiness of the greatest number nor personal liberties, he suggests, can deliver important aims that most people would consider to be socially important, including all the dimensions of sustainability discussed earlier in this book. For that, there is a need for societies to have a strong sense of the values and ambitions that matter.
Each of these approaches has clear merits, and it seems likely that each therefore has its place. In the realm of trade-offs and technical economic decision-making, the “what works” approach of economics and evidence-based policy must be the right one. But—as we saw very clearly in the debate among economists about how to address the challenge of climate change—some issues might take us outside the territory of choices at the margin. Yet there are equally obvious attractions in an emphasis on freedom and individual choice. Sen and other economists have amply documented the importance of freedom for the practical benefits a free society brings as well as the intrinsic merits and impact on people’s well-being. One example is Sen’s famous demonstration that famines do not occur when there is freedom of the press;26 and other economists such as Tim Besley have also shown that there is a link between some of the classic political and social liberties and favorable economic outcomes.27 Equally, though, the appeal of a shared set of collective values in societies that have become fragmented and dissonant is also clear. There may be no single framework that is right in all times and circumstances, but perhaps this is, as Sandel would argue, a time for rediscovering values that can be almost universally shared.
Few people would argue that policymaking has delivered everything we might desire in terms of social well-being in recent times—after all, this is why there’s a need for the Economics of Enough. If aiming at everything means we simply miss the target, how should we set priorities or limits? If it is not possible to find a way of aggregating social welfare so as to achieve all the distinct aims people might have for their societies, then which aims actually matter? Selecting values is an important political choice, often submerged in economic policy debates but unavoidable now. The last chapter discussed the need for better information to guide policy, and this chapter has discussed the need for clarity about values if social welfare is to be well served by policymakers. The third leg of the Economy of Enough is a set of institutions that ensure that society is governed well, and this is the subject of the next chapter. How might we respond to a general crisis