6.3 Evaluating Human Development

As we have begun to see, it is possible to derive powerful critical theorems without making value judgments about different human development paths. But we do not believe it is wise to make what are some of our most important evaluations without facing this issue. Yet where does one turn to find out what personality traits, skills, consciousness, and group relations are more desirable and which are less desirable? What constitutes relevant evidence in a debate over the relative merits of different characteristics? While we have argued it is no longer legitimate for economists concerned with welfare theory to avoid these questions, we by no means deny that complicated philosophical, moral, and political issues are involved. Moreover, the form in which different answers have been justified has varied greatly. In any case, concluding that some human development trajectories are better than others is certainly problematic, so it would be of interest if a particular conclusion could be justified by more than one plausible reasoning process. Below we concentrate on what we consider the most direct approach to judging development trajectories, but also outline alternative approaches that lead to similar conclusions.

6.3.1 Development Patterns and Human Nature

An approach to evaluating human development emerges quite naturally from the paradigm we described in the previous chapter. In that chapter we presented a theory of derived human characteristics and needs that emerged from the interaction of innate natural and species needs and powers with the natural, built, and institutional environments. To argue that some set of derived human characteristics was more compatible than others with the potentials defined by our natural and species needs and powers would provide a powerful justification for that path on the grounds that those characteristics and the needs they define would provide for greater human fulfillment than any other set of characteristics and derived needs could.

In other words, different sets of economic institutions can more or less adequately express our species characteristics and thereby generate greater or lesser fulfillment. For purposes of welfare economics, the characteristics we identify as most integrally linked with human nature are self-management, solidarity, and variety. Derivative developmental criteria are straightforward: if economic institutions foster the development of selfmanagement, solidarity, and variety in the human center, they receive "high marks," just as institutions efficiently fulfilling manifest preferences do. If economic institutions obstruct the development of self-management, solidarity, and variety in the human center, we deem those institutions flawed, just as institutions that fail to yield "static" efficiency are deemed flawed by traditional theory.

What remains, given this approach, is to define and justify each of these characteristics and relate it to our view of human nature. Self-management and solidarity are obviously related to the two aspects of human nature we identified in the previous chapter, consciousness and sociability. After discussing these attributes, we present a compatible argument for "variety" based on the complexity and breadth of human nature as well as critical human limitations.

Self-management.

By self-management we mean having decision-making input in the proportion that one is affected by the outcome of a decision. Our first evaluative criteria regarding derived human characteristics is that economic institutions that promote individual's desires for and capacities to engage in self-management are deemed more desirable than those that do not, ceteris paribus. To explain the uniqueness of this definition of selfmanagement before relating it to human nature, we should distinguish it from two more common notions: individual freedom and democratic choice.
The concept of individual freedom that Locke made a cornerstone of "classical liberalism" champions the right of individuals to do as they please. Of course this "vision" of liberty was refined by the stipulation that individuals should be free to do as they please as long as this does not infringe on the freedom of others to do likewise. ³⁶ It is crucial to note that the concept as defined may or may not be operational. Whether or not one can apply the concept as an evaluative criterion for ranking situations depends upon the social environment. For instance, if there are no instances in which person A may do as he or she pleases without preventing person B from doing likewise-and vice versa-the concept of individual freedom, at least as refined by Rawls, cannot be used to rank alternative situations. In this environment the concept is well defined but nonoperational. If, on the other hand, in all instances the "choice set" of person A is independent of the "choice set" of person B-and vice versa-the concept taken as an evaluative criterion is not only well defined, it is also operational. Granting either person A or B decision-making discretion over more elements in his or her individual choice set is preferred by the principle of individual liberty.

So what renders classical liberalism's concept of individual liberty more or less useful are the conditions of the social environment. Since we are not in the habit of commissioning factual scientific studies when dealing with lofty matters of principle like "liberty," this is where paradigms come in. ³⁷ The paradigm behind classical liberalism is what permits one to presume that, in general, or to a great extent, or to a sufficient degree to render the concept frequently usable, individual choice sets are nonintersecting. For to the extent that they are intersecting one must either make judgments based on other criteria, or define rules of priority. Specifically the classical liberal paradigm armed all individuals with sufficient material "wherewithal" to do what they pleased and presumed that doing as one pleased entailed no particular implications for the "activity and possibility sets" of others except in cases such as murder or rape where rules of priorities of individual liberties were easy to justify. We emphasize that it was the classical liberal paradigm, an intellectual construct, that so armed people. Whether individuals were and are so armed with "sufficient material wherewithal" in actual societies is quite debatable.
In any case, it is useful to distinguish two factors when thinking of choices of economic activities. It has often been remarked that the Lockean paradigm envisions a society of independent farmers and artisans--or petty commodity producers--each possessed of necessary means of production. In this case, farmers are each presumed to possess sufficient land, and artisans each presumed to possess necessary tools, to make accessible to them all activities in their individual economic choice sets. In other words, in the Lockean paradigm, no one's choice of economic activity is limited by absence of sufficient material wherewithal. In terms of the qualitative model of economic activity described in chapter 5, values of all state variables, both material and human, are nonlimiting for everyone. ³⁸
In contrast, the Marxist paradigm presumes exactly the opposite: the great majority of people have their individual liberty severely constrained by lack of material wherewithal, and must submit entirely to the will of a small minority, who by exercising individual economic liberty over their "person and property" effectively abridge the individual liberty of everyone else. In other words, in contrast to the Lockean paradigm, the Marxist paradigm renders the concept of individual liberty inoperable unless clear rules of priority are defined. While Milton Friedman was not the first to clarify related priorities, he is the best-known modern exponent of the "conflict resolving rule" that individual freedom to dispose of one's legally possessed "wherewithal" as one sees fit is to take precedence over others' individual freedom to utilize their laboring capacities as they would choose. Of course, there is a more euphemistic way of stating the rule: everyone is to be granted complete individual liberty over both person and property. If this consigns most to exercising their freedom to "vote with their feet" between work sites defined by other people's property "rights"-so be it.

But there is a more subtle form of potential limitation. Even if the values of individuals ' "state variables" are nonlimiting, my activity choice set can still depend on others' activities to provide necessary "input flows." Suppose person A prefers activities that are relatively self-sufficient-activities that require fewer inputs from others' activities-and person B prefers activities that are relatively less self-sufficient. ³⁹ It will matter little to A what B does because A does not rely on B in order to do what A prefers to do. But the same does not hold for B. Apparently when A exercises individual liberty A infringes on B's individual liberty by effectively preventing B from doing what B would most like to do, whereas B is in no position to do likewise to A. ⁴⁰

The point is, to the extent technological possibilities include "divisions of labor," exercise of individual liberty by some can entail infringements of liberty for others-and this is totally distinct from the question of limitations due to lack of "material wherewithal." Moreover, if people have different preferences regarding activities ranked on a scale of "relative self-sufficiency," the exercise of individual liberty by all will result in some people infringing more on the individual liberty of others and other people being more infringed upon-in much the same way that differential ownership of material wherewithal grants some an edge in the struggle over whose individual liberties will be more or less infringed upon. Whereas the Lockean and Marxist paradigms concentrate on the distribution of "material wherewithal" among individuals-albeit with opposite assumptions-the paradigm we developed in chapter 5 emphasized the view that the human world is social and that most economic activities have effects reaching beyond one or two individuals. For that reason in relatively few consequential economic decisions would self-management, as we define it, be achieved by someone exercising "individual freedom of choice," since this would allow that individual more decision-making power than effects warranted and deprive others who are also affected of any say in the matter whatsoever. But just as there are relatively few matters where only one person is affected, there are also very few matters where all people are equally affected. Therefore, there are few economic decisions for which selfmanagement can be achieved by simple democratic majority vote. Most local work place decisions, such as what kind of new technology to install in a particular factory, affect workers in that factory more than far distant consumers, but affect the consumers to some extent, as well as workers in other factories that might be supplying inputs. In such a case, self-management would not exist if all had an equal say, but only if workers in the given factory had greater say but consumers and workers in other factories had some say. In conclusion, according to our proposed paradigm, self-management is seldom equivalent to either individual freedom or democratic majority vote. In rare cases it may coincide with one or the other but in most cases it will not, because in most cases the pattern of effects is more complex than the pattern of effects that would justify the common conceptions. Now that the full implications of our definition of self-management and the paradigm that justifies its greater usefulness as an evaluative criterion than traditional alternatives are explicit, how can one justify it as an evaluative criterion based on a conception of human nature? Though it is obvious that many humans have existed under conditions with few opportunities for self-management, it is our contention that just as denial of material means is inevitably in conflict with human "natural" needs for food, shelter, and clothing, denial of self-management opportunities is inevitably in conflict with our "species" nature. The capacity to analyze and evaluate the consequences of our actions and choose among alternative actions based on analysis and evaluation in conjunction with the need to employ that capacity is what we have called "consciousness" and defined as a key component of human nature. Maximum development of the capacity and desire for self-management is nothing more than maximum development of the capacity to garner satisfaction from this innate human potential. Therefore, the greater the development of the capacity and desire for self-management in the human center, the better ceteris paribus. And if an economic institution enhances this human characteristic more than another does, it is deemed superior, ceteris paribus.

Solidarity.

By solidarity we mean concern for the well-being of others and granting them equality of consideration in their endeavors. Regarding others with concern and respect has been formulated as a "golden rule" and "categorical imperative," so that outside the economics profession solidarity is widely held to be a powerful creator of well-being. Solidarity among family members, between members of the same tribe, or within an ethnic group frequently generate well-being far in excess of what we would imagine possible based on material resources alone. But in the traditional economic welfare paradigm, concern for others is defined as an "interpersonal externality"--a nasty sounding habit-and regarded as troublesome since it undermines fundamental welfare theorems for private enterprise market economies. How are we to interpret this strange schizophrenia between traditional morality and traditional economics?
Traditional morality holds we will all be better off if we treat each other decently-a remarkably simple and sensible proposition. Traditional economics holds that since we do not, we had better find economic institutions that do not rely on people doing so. Is it farfetched to imagine Adam Smith chuckling to himself somewhere between The Theory of Moral Sentiments and the Wealth of Nations over the cleverness of economic institutions he believed generated maximum human well-being when people continue to refuse to treat each other decently? Do economists tend to see their employment as contingent on the fact that the clergy have not completed their appointed task?

In our view, a great deal depends on whether one takes a static or dynamic view of human characteristics. If human characteristics are presumed exogenous to economic institutions, then the task is simply to find economic institutions that generate maximum well-being based on given human characteristics. Since we by no means deny that actual human characteristics are considerably lacking in solidarity, we cannot deny that choice of economic institutions must take this into account. Of course, the opposite holds as well. Unless one denies that actual human characteristics are totally lacking in solidarity, one cannot deny that choice of economic institutions should take this into account as well. To put it in terms of a debate commonly heard in postcapitalist economies, to overestimate the degree of solidarity among the citizenry and reduce "material incentives" too severely, can lead to unacceptable losses in production and present well-being, not to speak of counterproductive political repercussions. ⁴¹ But another kind of "inefficiency" receives far less attention. To the extent any solidarity is present among the citizenry, to fail to "cash in" on the maximum well-being that could derive from this favorable circumstance by using economic institutions that are overly "egocentric" is no less "inefficient." ⁴²

This much would be true even if actual human characteristics were exogenous to the choice of economic institutions. But if more solidaritous human characteristics would make possible greater well-being than present characteristics allow, and if different sets of economic institutions have differential effects on the development of solidarity, this should be taken into account. In short, an endogenous view of human characteristics makes clear that it is also "inefficient" to fail to select economic mechanisms that develop solidarity among the citizenry, if, as we argue below, greater solidarity gives rise to greater possibilities of future well-being.
How specific economic institutions differ regarding their effect on the development of solidarity we leave to part 3. In this chapter we merely offer our own reasons for believing that the more solidarity present among the citizenry, the greater the possibilities are for well-being. Put differently, we now make our case for the wisdom of traditional morality.
In addition to consciousness, we identified sociability as a critical aspect of human nature. Our desires develop in communication with others and our needs are fulfilled in interaction with others. One of the strongest human drives is the neverending search for respect and esteem from others. All this is a consequence of our innate sociability. Because our lives are to a great extent joint endeavors, it makes sense we would seek the approval of others for our part in group efforts. Since many of our needs are best filled by what others do for/with us, it makes sense to want to be well regarded by others.

To put things in terms economists should readily understand, compare two different ways in which an individual can gain the esteem and respect of others. One way grants an individual status by elevating him or her above others, by positioning the person in a status hierarchy that is nothing more than a pyramidal system of relative rankings according to established criteria. For purposes of the present discussion, it doesn't matter what the particular criteria are. For one individual to gain esteem in this way it is necessary that at least one other-and usually many others-lose esteem. We have at best a zero-sum game, and most often a negative sum-game since losers in pyramidal hierarchies far outnumber winners. The second way grants individuals respect and guarantees that others are concerned for their well-being out of group solidarity. Solidarity establishes a predisposition to consider others' needs as if they were one's own, and to recognize the value of others' diverse contributions to the group's social endeavors. Solidarity is a positive-sum game-or in the language of a different branch of economics, the development of greater levels of solidarity multiplies the possibilities of positive externalities. ⁴³
The difference is straightforward. Group characteristics that enhance the overall well-being that can result from a given set of scarce material resources are obviously advantageous. Other things equal, it would be inefficient not to maximize the development of such characteristics. Solidarity is one such group characteristic.

We have argued elsewhere that the belief that solidarity among people can be generated by eliminating the differences between the multitude of distinct "communities" that have developed through actual history and creating a single human "community" with a single shared culture is a tragic mistake. ⁴⁴ The "dream" of a single "proletarian culture" that has influenced much of traditional "left" thinking is, in fact, a "nightmare" of an infantile "cultural playpen." But this is not an argument against the advantages of solidarity, it is an argument against a sadly mistaken strategy for creating solidarity. What we have championed in place of forced homogenization is the advantage of extending actual solidarity to a wider and wider range of communities. And in our view, this advantage stems from the fact that this is the only way to take fullest advantage of the potentials for well-being inherent in human sociability.
It is worth noting the very interesting relationship between solidarity and equality. Not only does solidarity mean equality of consideration for others, but in our view, a substantial equality of outcome is a precondition for generating solidarity. If material goods are generally scarce, then little, solidarity can exist between people who have material abundance and people who lack the basics of life. If some people have considerable say over the decisions that affect their lives whereas others have little, it will be difficult to generate much solidarity between them. In general, to the extent that any of our human needs are unfulfillable for all, any great discrepancy of outcome that is persistent and uncompensated will diminish the possibilities of solidarity. Another way of putting it is that equality of consideration implies a commitment to rectify any social circumstances that lead to persistently unequal outcomes.

Those familiar with the nineteenth-century history of welfare economics will be quick to recognize the lineage of an "efficiency-based" justification for greater equality. Jeremy Bentham spawned a whole school of "radical utilitarians" who brandished the sword of "diminishing marginal utility of income" in the redistributive debates of their day. More recently John Rawls "deduced" his "difference, or maximin principle" as rational choice in "an original position" in which one could not know who one would turn out to be. Apparently the desire to justify greater equality of outcome on other than "simple, moralistic grounds" is powerful enough to span the centuries!

In any case, the power of Bentham's argument was supposedly undercut by strengthening the notion of the sanctity of the individual and foreswearing interpersonal utility comparisons. ⁴⁵ Rawls' conclusion that "rationality" in the "original position" coincides with the maximin principle has been challenged by many as less compelling than the criterion of "maximizing expected utility." Most significantly, the latter criterion does not yield egalitarian conclusions. Not surprisingly, most economists side with Rawls' opponents in rejecting his "arbitrary assumption" of risk aversion, which is the crucial ingredient Rawls uses in cooking a more egalitarian stew.
We by no means accept the much touted virtues of foreswearing interpersonal utility comparisons as a compelling answer to Bentham's quite plausible contention. Nor do we reject Rawls' attitude toward rationality and risk aversion. But certainly, indirect justifications for greater equality are not overly popular these days. So, in the spirit of attempting to marshal abstract intellectual weaponry on the side of the forces of good, we offer yet another "efficiency based" justification for greater equality. The argument implicit above is that greater solidarity is efficient, and greater equality is a precondition for greater solidarity. Whether this argument will prove as provocative but less ill-fated than those of Bentham and Rawls is dubious since in the end, opinions are most often formed-as they should be-in "simple moralistic terms." ⁴⁶

Variety.

Our last "developmental criterion" is variety. Development of a greater variety of human characteristics is better than a greater uniformity of traits, ceteris paribus. The argument is based on the breadth of human potentials, the multiplicity of human natural and species needs and powers, the "fact" that people are neither omniscient nor immortal, and the laws of "sound" ecology.
First of all, people are very different. Constraints on the degree of our genetic differences make us all members of the human species, but this does not mean there are not differences between people's genetic endowments, nor does it preclude the view that the best trajectory of human development for different people is different. Robert Nozick makes the point graphically:

Wittgenstein, Elizabeth Taylor, Bertrand Russell, Thomas Merton, Yogi Berra, Allen Ginsburg, Harry Wolfson, Thoreau, Casey Stengel, the Lubavitcher Rebbe, Picasso, Moses, Einstein, Hugh Heffner, Socrates, Henry Ford, Lenny Bruce, Baba Ram Dass, Ghandi, Sir Edmund Hillary, Raymond Lubitz, Buddha, Frank Sinatra, Columbus, Freud, Norman Mailer, Ayn Rand, Baron Rothschild, Ted Williams, Thomas Edison, H. L. Mencken, Thomas Jefferson, Ralph Ellison, Bobby Fisher, Emma Goldman, Peter Kropotkin, you, and your parents. Is there really any one kind of life which is best for each of these people? ⁴⁷

Second, we are each individually too complex to achieve our greatest fulfillment through relatively few activities. Even if every individual were a genetic carbon copy of every other, the complexity of this single human entity, the multiplicity of potential needs and capacities would require a great variety of different human activities to achieve maximum fulfillment. To generate this variety of activities would in turn require a rich variety of social roles even in a society of genetic clones. And with a variety of social roles we would discover that even genetic clones develop quite different derived human characteristics. ⁴⁸
At this point it bears pointing out that variety of human development is not intrinsically at odds with solidarity and equality of outcomes. To those who think it is let us point out:

All of the above is a "positive" argument for variety of human development. Recognizing our lack of omniscience provides a "negative" argument in the way we hedge our bets. No individual can know for sure which development path will be most suitable for him or her, nor can any group or society be certain which development path is best. Of course, the whole logic of our evaluative theory presumes that we can come up with some sufficiently educated guesses so that acting on them is more likely to produce fulfilling results than pretending that all development paths are equally likely to prove fulfilling. But, ultimately, we must agree with John Stuart Mill that it is particularly important for human societies to exercise caution in this regard and admit the strong likelihood of majority fallibility.
This does not mean minority views concerning preferable development paths should be enforced on an unwilling majority. But it does imply that whenever possible, minority views concerning development should be enacted in parallel with majority choices by the minority believers themselves. In other words, since none of us can be perfectly sure about the best life for ourselves, it is in all our interests to encourage others who have different opinions about "the good life" to pursue their ideas. With a variety of development strategies the risk of continuing a nonoptimal trajectory is minimized to the extent that we seriously consider the lives of others.⁴⁹

When we said mortality was an argument for variety we were not being facetious. Although each of us lives only one life, we are each able to enjoy the lives of many others vicariously. Without diverse human development, opportunities for vicarious enjoyment would be minimal. The greater the variety, the greater the possibilities of using our capacity to understand and appreciate the lives of others. Solidarity pays greater "dividends" in context of variety, and vice versa.
We close our argument regarding variety by noting that according to many analysts, "bad" ecological practice can usually be equated with an overabundance of uniformity in our environment. This is not the place to pursue the "laws" of ecology, but for now we can simply observe that if a variety of results is a requirement of ecological stability, this can best be achieved by a variety of human activities, which in turn implies a variety of human characteristics and derived needs.

6.3.2 Alternative Approaches to Evaluating Human Development

Prioritizing development of particular human characteristics on grounds they are capable of generating more satisfaction because they are most compatible with essential aspects of innate human potential is only one possible approach to evaluating human development. Though we find it most appealing, we outline three other approaches that have merits of their own and grow in interest to the extent one is troubled by potential stumbling blocks in the optimizing fulfillment of human nature scenario.
First, in the approach taken above we treated human nature as noncontradictory and identified specific aspects of human nature that we argued social institutions should develop. But what if different aspects of human nature are contradictory? Are there reasons to believe human nature is contradictory, and if so, how would that affect the evaluative methodology we have proposed? One interpretation of the "laws of evolution" suggests that it is highly unlikely fundamental aspects of human nature are contradictory. The argument is straightforward: natural selection should not favor the development of contradictory attributes in a species. Evidence can be presented to the effect that "contradictory natures" are not to be found in other species, establishing a "presumption" of harmony within human nature until proven otherwise. This presumption then grants priority to alternative plausible explanations for apparent contradictions in human characteristics and/or behavior.

In other words, if we observe contradictory characteristics/behavior in people, we can propose two very different kinds of explanations. We can see contradictory characteristics/behavior as based in development of contradictory aspects of human nature itself Or we can explain such outcomes as the result of contradictory social institutions that generate contradictory derived human characteristics and behavior, even though no contradictory elements underlie human nature itself. The above reading of the "laws of evolution" gives the benefit of the doubt to plausible explanations of the latter form.
But suppose one is dubious about this interpretation of evolution and/or the plausibility of explanations emphasizing "contradictory social institutions" in at least some cases of contradictory behavior? Certainly other social theories have found our view overly optimistic and have proceeded from the assumption of contradictory elements in human nature. ⁵⁰ And, if other aspects of human nature were contradictory to any of the aspects we discussed, or if the elements we discussed proved contradictory among themselves, the evaluative approach we presented would no longer suffice. In and of itself, the above approach provides no basis for preferring a development trajectory that maximizes one aspect of human nature rather than (or at the expense of) another contradictory aspect of human nature.

Another possibility would give rise to similar problems with the approach we favor. Even if there are no contradictory aspects in human nature, suppose our genetic inheritance permits a relatively broad as opposed to narrow range of human potentials. We based our valuation of development effects of economic institutions on the criterion of their compatibility or noncompatibility with aspects of human nature. This presumes human nature is sufficiently specific that the range of human potentials permitted by our human genetic inheritance is sufficiently narrow to render such comparisons possible. In other words, in the approach presented above we not only based our evaluative criteria on an interpretation of human nature, we argued that institutions promoting the development of self-management, solidarity, and variety were uniquely compatible with human nature. What would be the effect on our theory if human nature were not so specific and if the range of human potentials was so broad that many quite different arrangements of institutional features were equally compatible with it?
We can summarize the implications of both possibilities together: if human nature should prove contradictory, then a trajectory that maximized development of one aspect of innate human potentials would necessarily fail to promote, and could quite possibly undermine, development of some other aspect of human nature. If human nature is sufficiently broad, a number of development trajectories could be equally compatible with human nature, or at least, could not be easily distinguished by the criterion of compatibility alone. In both cases the approach presented above would provide insufficient means to rank different derived human characteristics and the institutions that promote them.

We reiterate that in our opinion both logic and evidence point to a human nature that is essentially noncontradictory and sufficiently specific to permit important comparisons of social institutions based on developmental effects. Although we recognize that humans are unique among all species, we see no reason to believe the pressure of natural selection operated any differently with respect to us regarding the conformity of different aspects of our natures to one another. We are also aware of ample plausible explanations for contradictory and antisocial behavior based on incentives inherent in particular institutions that compel people to pursue fulfillment of intrinsically compatible needs in ways that nonetheless sacrifice satisfaction of some to the satisfaction of others and fulfill the needs of some members of society at the expense of leaving unmet the needs of other members. ⁵¹ And while we recognize that human nature is sufficiently broad to permit development of the diverse characters Nozick compiled to make his point above, we believe human nature is also sufficiently restrictive to permit us to draw important distinctions on developmental grounds. ⁵²
In sum, while the possibilities of contradictory human nature, or a human nature too broad to generate meaningful evaluative criteria, exist, we do not believe these possibilities are borne out. Therefore, we believe the evaluative approach presented above will hold up. But should we prove wrong in these judgments, what other approaches to evaluating human development are available, and what kinds of conclusions would they generate?

A Contractarian Approach.

Should the criteria we have suggested prove insufficient, should more than one development path be compatible with human nature, or development paths be compatible with only part of human nature, we find the contractarian notion of choice in an "original position" with appropriately structured information a useful analytical concept. In fact, this philosophical concept seems far more appropriate and useful in this context than in the contexts in which it is usually applied.
When we criticized neoclassical theory for its failure to treat preferences as endogenous, we indicated that contractarians were not immune to such criticism, but deferred our explanation. The reason was the failure of contractarians to face the problem of endogenous preferences was less obvious because even modern contractarians have not formalized what they call the individual's "conception of the good" in mathematical terms. Since neoclassical theory has long been accustomed to treating preferences mathematically-whether as cardinal or ordinal utility functions, or preference orderings-it was much easier to formulate a criticism of the neoclassical treatment of preferences than a criticism of contractarians' treatment of the individual's "conception of the good." But now we can extend our critique to the modern contractarian form of traditional welfare theory and proceed to show how their concept of the original position can nevertheless be of use in the present context.

When modern contractarians use the concept of original position they begin by stipulating that every individual has his or her own "conception of the good." But accepting the idea that every individual has a personal conception of the good is not the same as refusing to ask where that conception came from and what might have influenced it. We have explained how not only political, cultural, and kinship institutions will have an effect on the individual's conception of the good, but economic institutions may have a strong effect as well. The crucial question we pose to modern contractarians is whether we are to presume that individuals behind the "veil of ignorance" realize that their very conceptions of the good will be so influenced, and, if so, how individuals behind the veil of ignorance take into account the effect of choice of economic and other institutions on the development of human characteristics and "conceptions of the good." In fact, modern contractarians fail to address this question, which leaves us no choice but to interpret their silence as indicative that they believe these effects are as unimportant as neoclassical theorists believe them to be. ⁵³ Indeed, it was precisely for this reason we lumped modern contractarianism with neoclassical and classical utilitarianism as part of traditional welfare theory. ⁵⁴

In some readings, the aura of "value free objectivity" surrounding modern contractarianism is even greater than assumed by neoclassical theorists. We wish to point out that this is no more justified for contractarians than neoclassicals. Often, the original position is treated as a kind of vacuum. Contractarians admit that knowledge of general social laws is permitted behind the veil of ignorance, but this knowledge is portrayed as "objective," noncontroversial information. They imply no assumptions are made about what individual conceptions of the good are like. This is deception, though perhaps self-deception as well. In fact, what is permitted to pass through the veil of ignorance and enter the hallowed sanctum of the original position is the paradigm that underlies the theory. Once this is recognized, the question of "values" versus "objectivity" reduces to whether one accepts the paradigm as obvious and noncontroversial.
Our objection to modern contractarianism as it has been practiced is that it uncritically permits elements of the traditional welfare paradigm to enter the original position as "objective social law." There is no way market institutions can be "deduced" to satisfy the liberty and difference principles unless one has accepted as "objective social fact" the traditional paradigm's assumption of "external effect exceptionalism." And if market institutions affect people's conceptions of the good, then "deducing" market institutions from an original position implies a preference for some conceptions of the good over others. Or, put differently, if "individual's conceptions of the good" are recognized as endogenous to the choice of economic institutions, one cannot pretend to make no presumption about individual's conception of the good while deducing particular economic institutions as those that would be chosen freely by people in an original position. In other words, far from being a vacuum tainted only by "known truths," the veil of ignorance has been used to make the original position an anonymous repository for precisely the presumptions of the traditional welfare paradigm--certainly the most ideologically loaded and controversial part of the theory.

In sum, our criticism of modern contractarians is that they pretend to be "value free" when they are not; that they are seemingly unaware that many conclusions they reach can only be justified on the basis of crucial elements of the traditional welfare paradigm that are, in fact, quite controversial; and consequently that they fail to even treat the most important issues regarding choice of economic institutions. In particular, modern contractarians have permitted traditional presumptions of "external effect exceptionalism" and exogenous preferences inside the original position even while pretending that only noncontroversial social "truths" are permitted to penetrate what in this case is truly a veil of ignorance. The assumption of exogenous preferences is camouflaged but nonetheless present in the form of treating individual's conceptions of the good as if they were not affected by economic institutions.
Notice this is not a criticism of the new contractarian methodology, but a criticism of the application of that methodology to this point. Once we recognize that the veil of ignorance and original position are concepts that allow us to isolate our underlying paradigm to discover whatever conclusions may be deduced from assumptions inherent in that paradigm, we can apply those tools to investigate the hidden implications of other paradigms. And this is the role we now propose for the contractarian tools should contradictory or nonspecific human nature prove to be the case.
In short, what if we permit our paradigm to pass through the veil of ignorance and fill the original position? In that case, what those who must choose will "know" includes understanding that their choice of social (including economic) institutions will profoundly affect their "conceptions of the good," since it will affect the development of human characteristics upon which those conceptions are based. This implies the necessity of "choosing" among different development trajectories. If aspects of human nature prove contradictory, and different development paths enhance some aspects at the expense of others, those in the original position must choose which aspects they wish to favor. If many different development paths are equally compatible with human nature because human nature is insufficiently specific to provide evaluative criteria, again, those in the original position would have to decide which path they favor and base their choice of social institutions, at least in part, on whether or not those institutions propel human development in that direction or some other.
In our view the need for the additional theoretical "tools" the new contractarians afford us is minimal--choice within an original position surrounded by a veil of ignorance-assuming human nature is noncontradictory and sufficiently specific. But the contractarian methodology becomes more appealing in proportion to whatever weaknesses may develop in the human nature-based approach. How might it be applied?

What if people's acquisitive tendencies were the result of an "acquisitive instinct" that in some sense was part . of our genetic endowment, as Veblen hypothesized? What if sociobiologists are right that we are aggressive, or seek to dominate others, "by nature" rather than by social conditioning? If the aspects of human nature we identified previously and the development characteristics of self-management, solidarity, and variety based upon them were no less part of our "species being," those in the original position would face an obvious dilemma. We would certainly want the veil of ignorance to function so as to allow them to be aware of their dilemma. If it should prove the case, the fact that our natures are to some extent contradictory should be permitted to pass through the veil of ignorance. And information concerning which aspects of human nature would be enhanced or retarded by particular social institutions would also be "legitimate" information we would wish to penetrate the veil of ignorance. Without this information, choice in the original position would not be "informed choice."
In this instance, the additional theoretical concepts provide a way to identify with great care what people need to know to make an informed choice about where they wish to go, and what we could not permit people to know if we want "unbiased" opinions. The new contractarian methodol ogy does not permit me to know whether or not I would end up with a large or small "pile of possessions," if I voted for a path that developed our "acquisitive instincts." It forces me, if you will, to choose prior to knowing if I would be an aggressor or victim of aggression, a master or subordinate, if I vote for institutions that develop these potentials. If some aspects of human nature are contradictory, but development of some of those aspects implies "losers" as well as "winners," while development of other aspects implies aggregate benefits in which all receive positive allotments, a compelling criterion would appear to emerge from the structure of the new contractarian methodology.

Of course, some will object that the conclusion that self-management and solidarity would be favored over acquisitiveness, aggression, and mastery over others by vote in an original position is not a logical deduction but ultimately a statement of preference. And we do not really disagree. After all, it is at least possible to prefer a one-in-ten chance of riches or mastery accompanied by a nine-in-ten chance of poverty or subjugation to a guarantee of solidarity and self-management, assuming-against our interpretation of the evidence-that maximizing fulfillment of human nature is compatible with both paths. ⁵⁵ The point here is similar to the objection raised to Rawls' "deduction" of the maximin principle by those who argue that maximizing expected utility would be preferred by those in an original position.

What about the possibility of different development trajectories equally compatible with human nature? Here as well, one reading of the "anonymity" restriction in the original position "deduces" a preference for trajectories where positive aggregate benefits are accompanied by positive individual benefits for all as opposed to trajectories where positive aggregate benefits may entail losses for some as well as benefits for others. ⁵⁶ Such a reading would, in our opinion, endorse the characteristics we identify as selfmanagement, solidarity, and diversity. Whether it would also endorse other characteristics that might be enhanced by alternative development trajectories equally compatible with human nature would, of course, depend on analysis of what those characteristics turned out to be. But as we pointed out previously, Nozick and others objected to this reading of the implications of anonymity in any case.
Even if one takes a non-risk averse or even risk-prone view, we believe the contractarian approach can improve the quality of debate. If, contrary to our judgment, a human nature-based approach is insufficient, at minimum a selfconscious contractarian approach that recognizes itself as a vehicle for isolating a particular paradigm that may contain controversial elements can elucidate matters. It can help clarify what is at stake when we surround ourselves with different institutional boundaries, and it can clarify the dilemma of people "choosing" among institutions when living under the influence of institutions that affect our preferences for what those institutions provide.
Conceiving of choice in an original position where no institutions influence our conceptions of the good is a way of reminding us that to evaluate whether institutions are giving us what we want or molding us to want what they give us, we must, in some sense, step outside our institutional environment and examine matters from a distance. Provided we remember not to unconsciously import the influence of our actual institutional environment through the veil of ignorance, the original position can provide the detachment necessary for meaningful evaluations of this kind. But should a contractarian methodology still prove insufficient to yield conclusive judgments, two other approaches can be brought to bear.

Species Survival and the Humanist Tradition.

One could judge different developmental trajectories from the perspective of species survival in a nuclear age. In context of multiparty potentials to unleash mutual selfdestruction, we could judge different development trajectories from the point of view of whether they are more or less likely to avoid this outcome. Obviously, institutions that enhance the spread of solidarity between groups that have historically viewed each other with suspicion and hostility would be regarded highly. ⁵⁷
Finally, if faced with more than one development trajectory believed to be equally compatible with human nature, equally likely to ensure species survival, and equally attractive to a faceless voter shrouded in an original position, we could grant such a voter a philosophical, moral, political, historical tradition. We could say one set of institutions may be chosen over another because it would be more likely to enhance human development trajectories more favored by such a tradition. In this vein we could say selfmanagement, solidarity, and variety would be chosen in an original position by those who accept the values of a "humanist" tradition.
Indeed, in this section on judging human development patterns, we have tried to point out a variety of arguments that justify conclusions of the humanist tradition. After all, it need not be the case that evidence is equally compelling for all competing traditions. But, no doubt, as much as we have tried to argue that favoring a particular pattern of human development need not reduce to a simple leap of faith, there will be those who insist it does. For them, this section will be judged intellectual adornment for opinions already held. But even for those who view our arguments in this light, we hope they provide clarity about the kinds of approaches that can be taken to justify preferring one trajectory to another, and about what can render the different approaches compelling. In any case, for those who remain skeptical, we offer the theorems of this in subsequent chapters. The theorems presume no preferred trajectory.

 

6.3.3 Summary

While it is tempting to avoid arguing directly for the superiority of a particular human development trajectory, we have developed a "second track" to our welfare theory that does not duck this issue posed by an endogenous view of preferences. In fact, we have outlined more than one approach that can be used to establish the superiority of one set of characteristics over another. We presented our own approach based on human nature, and also considered approaches based on the new contractarian methodology, species survival in a nuclear age, and explicit adherence to the humanist tradition. Moreover, we have shown how each approach could be used to justify the characteristics of self-management, solidarity, and variety that form the basis for the "second track" to our evaluative methodology.
In part 3 we use both the theorems and the values of self-management, solidarity, and variety developed in this chapter to investigate the welfare attributes of the major economic institutions of our time--competitive markets, private and public enterprise, and central planning.