This is a reply to the latest from Walter Block.
Walter says that I do not “show” that I’ve read Rothbard’s article on utility and welfare economics. But what Walter’s accusation shows is that he didn’t read my article. As a matter of fact, the article I wrote in 2007 on the subject refers to Rothbard’s paper, provides a link to it, characterizes it correctly, and explains my effort as an attempt to bypass the dead end which our inability to make interpersonal utility comparisons erects. And, by the way, that also shows that another of Walter’s accusations is wide of the mark, for he keeps claiming that I view interpersonal utility comparisons as not being invalid. Here’s what I wrote 13 years ago about Rothbard and interpersonal utility comparisons:
“Rothbard in his reconstruction paper pointed out that when government officials gain utility from an official act that restricts A and B ‘As economists, we can therefore say nothing about social utility in this case, since some individuals have demonstrably gained and some demonstrably lost in utility from the governmental action.’ The problem here and elsewhere in the economics of social utility is that when there is not unanimity, the economist is stymied. I have shown that we can say something when a society has a law against theft; and most societies do, even as they break it. By recognizing that a society has a law against theft, we bypass the unanimity problem.”
I didn’t assail or disagree with Rothbard’s statement and I still don’t. I did view the limitation it presents as something we might be able to overcome. This would, if true, strengthen the libertarian position, and that is what the article aimed to accomplish. I wanted to find a way of saying definitively that a government act of coercion lowered social utility; and that paper makes an argument as to what condition insures that that happens. And that condition is that the society has a foundational prohibition against theft. This prohibition is assumed to be the demonstrated preference of the society. That’s a critical premise of my analysis. That’s an “if” condition. That premise can’t be questioned. It’s not an empirical premise. It’s a hypothetical, like saying “If I strike a match and it lights”, then several consequences follow like a local rise in temperature, other things equal. If a society has a demonstrated preference against theft, then what follows if it passes a statute that compels a wealth transfer? I argue that it causes society to occupy a less-preferred position. In equivalent language, social utility declines.