The Impossibility of a Paretian Liberal

Author(s): Amartya Sen

Source: Journal of Political Economy, Vol. 78, No. 1 (Jan. - Feb., 1970), pp. 152-157
Published by: University of Chicago Press
Stable URL: http://www.jstor.org/stable/1829633
Accessed: 09-11-2015 03:13 UTC

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://www.jstor.org/page/
info/about/policies/terms.jsp

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content
in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship.
For more information about JSTOR, please contact support@jstor.org.

University of Chicago Press is collaborating with JSTOR to digitize, preserve and extend access to Journal of Political
Economy.

http://www.jstor.org

This content downloaded from 130.56.86.218 on Mon, 09 Nov 2015 03:13:16 UTC
All use subject to JSTOR Terms and Conditions
The Impossibilityof a Paretian Liberal

AmartyaSen
Delhi School of Economics and Harvard University

I. Introduction
resultthatseems
The purposeof thispaper is to presentan impossibility
to have some disturbingconsequencesforprinciplesof social choice. A
commonobjectionto themethodof majoritydecisionis thatit is illiberal.
The argumenttakesthefollowingform:Given otherthingsin thesociety,
if you preferto have pink walls ratherthan white,then societyshould
permityou to have this,evenifa majorityofthecommunity wouldliketo
whether
see yourwallswhite.Similarly, youshouldsleepon yourbackor on
yourbellyis a matterin whichthesocietyshouldpermityou absolutefree-
dom,even if a majorityofthecommunity is noseyenoughto feelthatyou
mustsleepon yourback. We formalizethisconceptofindividualliberty in
an extremely weak formand examineits consequences.

II. The Theorem

Let Ri be the orderingof the ithindividualover the set X of all possible
social states,each social statebeinga completedescriptionof societyin-
cludingeveryindividual'spositionin it. Thereare n individuals.Let R be
the social preference relationthatis to be determined.
DEFINITION 1: A collectivechoicerule is a functionalrelationship that
specifiesone and only one social preferencerelationR for any set of n
individualorderings(one orderingforeach individual).
A specialcase of a collectivechoiceruleis one thatArrow(1951) calls a
social welfarefunction,namely,a rulesuch thatR mustbe an ordering.
DEFINITION 2: A social welfare functionis a collectivechoice rule,the
rangeof whichis restricted to orderings.
A weakerrequirement is thateach R should generatea "choice func-
tion,)"that is, in everysubset of alternativestheremust be a "best"
For comments and criticismsI am gratefulto Kenneth Arrow, Peter Diamond,
Milton Friedman, Tapas Majumdar, Stephen Marglin, and Thomas Schelling.
152

This content downloaded from 130.56.86.218 on Mon, 09 Nov 2015 03:13:16 UTC
All use subject to JSTOR Terms and Conditions
PARETIAN LIBERAL 153

alternative,or,in otherwords,theremustbe some(butnotnecessarily only

one) alternative thatis at least as good as all theotheralternativesin that
subset.This maybe called a "social decisionfunction."
DEFINITION 3: A social decisionfunctionis a collectivechoice rule,the
rangeof whichis restricted to social preference relationsthatgeneratea
choicefunction.
it was shown in Sen (1969) thattheconditionsthatwereprovento be
inconsistentby Arrow (1951, 1963) in his justly famous "impossibility
theorem"in the contextof a social welfarefunctionare in factperfectly
consistentif imposed on a social decision function.The impossibility
theoremto be presentedhereholds,however,forsocial decisionfunctions
as well.
Arrow'sconditionof collectiverationality (Condition1') can be seen to
be merelya requirement thatthedomainofthecollectivechoiceruleshould
not be arbitrarily restricted.
CONDITION U (Unrestricted Domain): Everylogicallypossiblesetofin-
dividualorderingsis includedin thedomainof thecollectivechoice rule.
Arrowused a weak versionof the Paretoprinciple.
CONDITION P: If everyindividualprefersany alternative x to another
alternative y, thensocietymustpreferx to y.
Finally,we introducetheconditionof individuallibertyin a veryweak
form.
CONDITION L (Liberalism): For each individuali, thereis at least one
pair of alternatives,say (x, y), such thatif thisindividualprefersx to y,
thensocietyshouldpreferx to y, and ifthisindividualprefers y to x, then
societyshould prefery to x.1
The intentionis to permiteach individualthe freedomto determineat
leastone social choice,forexample,havinghis own wallspinkratherthan
white,otherthingsremainingthesame forhimand therestof thesociety.2
The followingimpossibility theoremholds.
THEOREM I: Thereis no social decisionfunction thatcan simultaneously
satisfyConditionsU, P, and L.
1 The term"liberalism" is elusive and is open to alternativeinterpretations.Some
uses of the termmay not embrace the condition definedhere, while many uses will. I
do not wish to engage in a debate on the rightuse of the term.What is relevantis that
Condition L representsa value involvingindividual libertythat many people would
subscribeto. Whethersuch people are best described as liberalsis a question that is not
crucial to the point of this paper.
2 Even this informalstatement,which sounds mild, is much more demanding than

Condition L. If the individual's preferenceover a personal choice (like choosing the

color of his wall) is to be accepted by the society,other thingsremainingthe same,
thenthis gives the individual rightsnot only over one pair, which is all that is required
by Condition L, but over many pairs (possibly an infinitenumber of pairs) varying
withthe "other things." If it is socially all rightfor me to have mywalls eitherpink or
white as I like in a social state where you smoke cigars, it should be socially all right
for me to do the same where you indulge yourselfin ways otherthan smokingcigars.
Even this is not required by Condition L, which seems to demand very little.

This content downloaded from 130.56.86.218 on Mon, 09 Nov 2015 03:13:16 UTC
All use subject to JSTOR Terms and Conditions
154 JOURNAL OF POLITICAL ECONOMY

In fact,we can weakentheconditionofliberalismfurther. Such freedom

maynotbe givento all, butto a propersubsetof individuals.However,to
makesensethesubsetmusthavemorethanone member,sinceifitincludes
onlyone thenwe mighthave a dictatorship. Hence,we demandsuchfree-
dom forat least two individuals.
CONDITION L* (MinimalLiberalism): Thereare at leasttwo individuals
such thatforeach of themthereis at least one pair of alternativesover
whichhe is decisive,thatis, thereis a pair of x, y, suchthatifhe prefersx
(respectively y) to y (respectively x), thensocietyshould preferx (respec-
tivelyy) to y (respectively x).
The followingtheoremis strongerthanTheoremI and subsumesit.
THEOREM II: There is no social decision functionthat can simultane-
ouslysatisfyConditionsU, P, and L*.
PROOF: Let thetwo individualsreferred to in ConditionL* be 1 and 2,
respectively, and thetwo pairsof alternatives referredto be (x, y) and (z,
w), respectively. If (x, y) and (z, w) are thesame pair of alternatives, then
thereis a contradiction. They have, therefore, at most one alternativein
= 1
common,say x z. Assumenow thatperson prefersx to y, and person
2 prefersw to z(= x). And leteveryonein thecommunity including1 and 2
prefery to ix. Thereis in thisno inconsistency foranyone,not even for I
and 2, and theirrespective orderingsare: I prefers x to y and y to w,while
2 prefers y to wand w to x. By ConditionU thisshouldbe inthedomainof
thesocial decisionmechanism.But by ConditionL*, x mustbe preferred
to y, and w mustbe preferred to x (=z), whileby the Pareto principle,y
mustbe preferred to w.Thus,thereis no bestelementin theset(x = z, y,w)
in termsof social preference, and everyalternativeis worse than some
other.A choice functionforthe societydoes not therefore exist.
Next,letx, y, z, and w,be all distinct.Let 1 preferx to y, and 2 preferz
to w. And let everyonein thecommunity including1 and 2 preferw to x
and y to z. Thereis no contradiction for1 or 2, for1 simplyprefersw to x,
x to y, and y to z, while2 prefers y to z, z to w,and wto x. By ConditionU
this configuration of individualpreferencesmust yield a social choice
function.ButbyConditionL* societyshouldprefer x to y and z to w,while
by theParetoprinciplesocietymustpreferw to x, and y to z. This means
thatthereis no bestalternative forthisset,and a choicefunctiondoes not
existfor any set that includesthesefouralternatives.Thus, thereis no
social decisionfunctionsatisfying ConditionsU, P, and L*, and theproof
is complete.3

3 We can strengthen thistheoremfurtherby weakeningCondition L* by demanding

only that 1 be decisive forx against y, but not vice versa, and 2 be decisive forz against
w, but not vice versa, and require that x # z, and y # w. This condition, too, can be
shown to be inconsistentwithCondition U and P, but the logical gain involved in this
extensiondoes not,alas, seem to be associated withany significantincrease of relevance
that I can thinkof.

This content downloaded from 130.56.86.218 on Mon, 09 Nov 2015 03:13:16 UTC
All use subject to JSTOR Terms and Conditions
PARETIAN LIBERAL I55

III. An Example
We givenow a simpleexampleofthetypeof impossibility thatis involved
in TheoremII by takinga special case of two individualsand threeal-
ternatives.There is one copy of a certainbook, say Lady Chatterly's
Lover,whichis vieweddifferently by 1 and 2. The threealternativesare:
thatindividual1 readsit (x), thatindividual2 readsit (y), and thatno one
readsit(z). Person1,who is a prude,prefersmostthatno one readsit,but
giventhechoicebetweeneitherof thetwo readingit,he would preferthat
he read it himselfratherthan exposinggullibleMr. 2 to the influences
of Lawrence.(Prudes,I am told,tendto preferto be censorsratherthan
beingcensored.)In decreasingorderof preference, his rankingis z, x, y.
Person2, however,prefersthateitherof themshould read it ratherthan
neither.Furthermore, he takes delightin the thoughtthatprudishMr. 1
mayhaveto read Lawrence,and hisfirstpreference is thatperson1 should
read it, nextbest that he himselfshould read it, and worstthat neither
should.His rankingis, therefore, x, .y,z.
Now ifthechoiceis preciselybetweenthepair(x, z), i.e.,betweenperson
1 readingthebook and no one readingit,someonewithliberalvaluesmay
argue that it is person l's preference thatshould count; since the prude
would not like to read it, he should not be forcedto. Thus, the society
should preferz to x. Similarly,in the choice exactlybetweenperson2
readingthe book (y) and no one readingit (z), liberalvalues requirethat
person2's preference shouldbe decisive,and sincehe is clearlyanxiousto
readthebook he shouldbe permitted to do this.Hencey shouldbe judged
sociallybetterthanz. Thus,in termsofliberalvaluesitis betterthatno one
reads it ratherthan person 1 beingforcedto read it, and it is stillbetter
thatperson2 is permitted to read thebook ratherthanno one readingit.
Thatis,thesocietyshouldprefer y to z, and z to x. Thisdiscoursecould end
happilywiththebook beinghandedoverto person2 but forthefactthat
it is a Paretoinferioralternative,beingworsethanperson1 readingit,in
theviewof both persons,i.e., x is Pareto superiorto y.
Everysolutionthatwe can thinkof is betteredby some othersolution,
giventhe Paretoprincipleand theprincipleof liberalism,and we seemto
have an inconsistency of choice.This is an exampleof thetypeof problem
thatis involvedin TheoremsI and II.

IV. Relevance
The dilemmaposed heremay appear to be somewhatdisturbing.It is, of
course,not necessarilydisturbingforeveryconceivablesociety,sincethe
conflict ofindividualpreferences.
ariseswithonlyparticularconfigurations
The ultimateguaranteefor individuallibertymay rest not on rules for
social choicebut on developingindividualvalues thatrespecteach other's

This content downloaded from 130.56.86.218 on Mon, 09 Nov 2015 03:13:16 UTC
All use subject to JSTOR Terms and Conditions
156 JOURNAL OF POLITICAL ECONOMY

personalchoices.The conflictposed hereis concernedwithsocietieswhere

sucha conditiondoes nothold and wherepairwisechoicebased on liberal
valuesmayconflictwiththosebased on theParetoprinciple.Like Arrow's
"General PossibilityTheorem,"herealso the Conditionof Unrestricted
Domain is used.
However,unlikein thetheoremof Arrow,we have not requiredtransi-
tivityof social preference. We have requiredneithertransitivity of strict
preference, nor transitivity of indifference,
but merelythe existenceof a
best alternativein each choice situation.4Suppose societyprefersx to y,
and y to z, and is indifferentbetweenz and x. Arrowwould rule thisout,
since thereis an intransitivity; but we do not, for here alternativex is
"best" in thesenseof beingat leastas good as boththeotheralternatives.
Our requirements are, in this respect,very mild, and we stillhave an
impossibility.
Second,we have not imposedArrow'smuchdebatedconditionof "the
independenceof irrelevant alternatives."5
Many peoplefindtherelaxation
of thisconditionto be an appealingway of escapingtheArrowdilemma.
This wayout is notopen here,forthetheoremholdswithoutimposingthis
condition.
The Paretoprincipleis used herein a veryweakversion,as in Arrow.We
do not necessarilyrequirethatifsomeoneprefersx to y and everyonere-
gardsx to be at leastas good as y, thenx is sociallybetter.We permitthe
possibilityof havingcollectivechoice rulesthatwill violatethisprovided
everyonestrictly preferring x to y mustmake x sociallybetterthany.

4 It may appear that one way of solvingthe dilemma is to dispense withthe social
choice functionbased on a binaryrelation,that is, to relax not merelytransitivity but
also acyclicity.A choice functionthat need not correspond to any binaryrelation has
undoubtedlya wider scope. But then Condition P and Condition L would have to be
redefined,for example, (1) x should not be chosen when y is available, if everyone
prefersy to x, and (2) foreach individual thereis a pair (xi, yi) such that ifhe prefersxi
(respectivelyyi) to y, (respectivelyxi), then yi (repectivelyxi) should not be chosen if
xi (respectivelyyi) is available. Thus redefined,the choice set forthe set of alternatives
may be renderedemptyeven withoutbringingin acyclicity,and the contradictionwill
reappear. This and other possible "ways out" are discussed more fullyin my forth-
coming book (Sen, in press, chap. 6).
5 Using the condition of the independence of irrelevantalternatives,A. Gibbard, in

an unpublished paper, has recentlyproved the following important theorem: Any

social decision functionthat must generatesocial preferencesthat are all transitivein
the strict relation (quasi-transitive) and which must satisfyConditions U, P. non-
dictatorship,and the independence of irrelevantalternatives,must be an oligarchyin
the sense that thereis a unique group of individuals each of whom, by preferring x to
y, can make the societyregardx to be at least as good as y, and by all preferring x to y
can make the societypreferx to y, irrespectiveof the preferrences of those who are not
in this group. Gibbard's Theorem is disturbing,forthe conditions look appealing but
the resultantoligarchy seems revolting,and it is a major extension of the problem
posed by Arrow (1951, 1963). Gibbard argues against the simultaneous insistenceon
a binaryrelationof social preferencegeneratinga choice functionand on thecondition
of the independence of irrelevantalternatives.We have not imposed the latter.

This content downloaded from 130.56.86.218 on Mon, 09 Nov 2015 03:13:16 UTC
All use subject to JSTOR Terms and Conditions
PARETIAN LIBERAL I57

Nevertheless it turnsout thata principlereflecting

liberalvaluesevenin
a verymildformcannotpossiblybe combinedwiththeweak Paretoprin-
ciple,givenan unrestricted domain. If we do believein theseothercon-
ditions,thenthe societycannot permiteven minimalliberalism.Society
cannotthenlet morethan one individualbe freeto read what theylike,
sleep the way theyprefer,dress as theycare to, etc., irrespectiveof the
preferences of othersin thecommunity.
Whatis themoral?It is thatin a verybasic senseliberalvaluesconflict
withtheParetoprinciple.If someonetakestheParetoprincipleseriously,
as economistsseemto do, thenhe has to face problemsof consistency in
cherishing liberalvalues,evenverymildones.6Or, to look at it in another
way,ifsomeonedoes havecertainliberalvalues,thenhemayhavetoeschew
his adherenceto Pareto optimality.While the Pareto criterionhas been
thoughtto be an expressionofindividualliberty, it appearsthatin choices
involvingmorethantwoalternatives it can haveconsequencesthatare,in
fact,deeplyilliberal.

References
Arrow, K. J. Individual Values and Social Choice. New York: Wiley, 1951;
2d ed., 1963.
Sen, A. K. "Quasi-transitivity,Rational Choice and Collective Decisions."
Discussion paper no. 45, Harvard Instituteof Economic Research 1968. Rev.
Econ. Studies 36, no. 3 (July1969):381-93.
. CollectiveChoiceand Social Welfare.San Francisco: Holden-Day; and
Edinburgh: Oliver & Boyd, in press.

6
The difficulties
of achievingParetooptimalityin thepresenceof externalities
are
wellknown.Whatis at issuehereis theacceptabilityofParetooptimality as an objec-
tivein thecontextof liberalvalues,givencertaintypesof externalities.

This content downloaded from 130.56.86.218 on Mon, 09 Nov 2015 03:13:16 UTC
All use subject to JSTOR Terms and Conditions