Skip to main content

Pareto Optimality, Part I

Image result for pareto optimality graph

Pareto "optimality" (sometimes also called Pareto "efficiency") is an ideal often discussed in decision theory and related branches of the social sciences and philosophy. My understanding is that the two terms are synonymous, although "optimality" seems in broader use.

The idea at heart is that it is wrong to refuse to do something that would make somebody better off, unless that action would make somebody else worse off.  So any circumstance in which there is an improvement possible for somebody, that does NOT involve a loss for anybody, is a sub-optimal state. Pareto optimality exists, then, when there are no such moves. 

As you might guess, there is somebody named Pareto behind this idea. He is Vilfredo Pareto, an Italian engineer (1848 - 1923) who in midlife turned himself into an economist. Indeed, Benoit Mandelbrot (the famous chaos theorist) has said that it was Pareto more than anyone else who turned economics from a branch of moral philosophy into a "data intensive field of scientific research and mathematical equations." 

His idea of optimality doesn't sound at all demanding. Indeed, it sounds like it may well describe a situation that is very much less than optimal by an intuitive understanding of the term. It might, for example, describe a situation in which somebody is starving because he cannot find productive work. After all, taking food from someone else to save our starving man's life would be a loss for that someone else (however small the loss) so Pareto optimality does not require it. This is not to say that Pareto optimality prohibits such a taking (a different question), but in terms of the simple definition of the idea, it is clear that Pareto optimality doesn't REQUIRE that the starving man be saved. 

That has been the standard objection to the elevation of Pareto optimality to any normative importance: it is too minimal a goal. But Amartya Sen has introduced another twist to discussion of the idea. There is one respect in which it may be too demanding. 

Sen asks us to consider that there exists an obscene book, under whatever definition of "obscene" you wish to use. We'll call it LCL (after the initials of the book involved in some famous litigation). Sen's hypothetical requires that we focus on two individuals, whom he calls Lewd and Prude. Each of these two individuals has two demands to make of their surrounding society, two different things that would each make them happy.  It is how these two demands intersect that concerns us.

Lewd kind of wants to possess and read LCL. Level of intensity 7 on a scale of 10.

But what Lewd REALLY wants is to require Prude to read LCL, because Prude deserves to be disgusted and shocked. Level of intensity for this want is 10 out of 10. 

Meanwhile, Prude kind of wants to avoid possessing or reading the book. Level of intensity 7.

But what Prude REALLY wants is to keep Lewd from possessing or reading the book. Level of intensity 10!

Now: the intuitively sensible idea is "live and let live." Prude can ignore the book, Lewd can own and read it. This produces utilities at level 14 (7 + 7). Neither side gets its 10 but, hey ... deal with it, guys. 

What Sen points out is that Pareto might consistently have criticized this live-and-let-live situation as sub-optimal. Surely when we are AT that situation, Prude doesn't have the book and Lewd does, it is possible for the two parties to agree to trade places. Lewd gives up the book and the possibility of any more enjoyment of LCL: Prude has to take it and read it (as a one time thing or at regular intervals -- to be negotiated.) This way both parties are better off. 

Of course this assumes a lot. Among much else it assumes enforceability. Prude would have to be sure that once Lewd gives up his copy, he's not just going to buy or download another one. The whole point for Prude is the pleasure of depriving Lewd of HIS pleasure. Lewd also has to have confidence that Prude really will read through the book, and not just leaf through the pages with his eyes closed or something. 

Regardless: if the deal can be arranged to everybody's satisfaction, Prude gets the 10 result and Lewd gets the 10 result. EACH is better off and nobody is worse off. So, live and let live is not Pareto optimal. That, in Sen's view, is an argument against the value of the idea of Pareto optimality, since in such matters he takes the acceptability of live-and-let-live as axiomatic. 

More thoughts on this tomorrow. 

  


Comments

Popular posts from this blog

A Story About Coleridge

This is a quote from a memoir by Dorothy Wordsworth, reflecting on a trip she took with two famous poets, her brother, William Wordsworth, and their similarly gifted companion, Samuel Taylor Coleridge.   We sat upon a bench, placed for the sake of one of these views, whence we looked down upon the waterfall, and over the open country ... A lady and gentleman, more expeditious tourists than ourselves, came to the spot; they left us at the seat, and we found them again at another station above the Falls. Coleridge, who is always good-natured enough to enter into conversation with anybody whom he meets in his way, began to talk with the gentleman, who observed that it was a majestic waterfall. Coleridge was delighted with the accuracy of the epithet, particularly as he had been settling in his own mind the precise meaning of the words grand, majestic, sublime, etc., and had discussed the subject with William at some length the day before. “Yes, sir,” says Coleridge, “it is a majesti

Five Lessons from the Allegory of the Cave

  Please correct me if there are others. But it seems to be there are five lessons the reader is meant to draw from the story about the cave.   First, Plato  is working to devalue what we would call empiricism. He is saying that keeping track of the shadows on the cave wall, trying to make sense of what you see there, will NOT get you to wisdom. Second, Plato is contending that reality comes in levels. The shadows on the wall are illusions. The solid objects being passed around behind my back are more real than their shadows are. BUT … the world outside the the cave is more real than that — and the sun by which that world is illuminated is the top of the hierarchy. So there isn’t a binary choice of real/unreal. There are levels. Third, he equates realness with knowability.  I  only have opinions about the shadows. Could I turn around, I could have at least the glimmerings of knowledge. Could I get outside the cave, I would really Know. Fourth, the parable assigns a task to philosophers

Searle: The Chinese Room

John Searle has become the object of accusations of improper conduct. These accusations even have some people in the world of academic philosophy saying that instructors in that world should try to avoid teaching Searle's views. That is an odd contention, and has given rise to heated exchanges in certain corners of the blogosphere.  At Leiter Reports, I encountered a comment from someone describing himself as "grad student drop out." GSDO said: " This is a side question (and not at all an attempt to answer the question BL posed): How important is John Searle's work? Are people still working on speech act theory or is that just another dead end in the history of 20th century philosophy? My impression is that his reputation is somewhat inflated from all of his speaking engagements and NYRoB reviews. The Chinese room argument is a classic, but is there much more to his work than that?" I took it upon myself to answer that on LR. But here I'll tak