Academic journal article Review of Social Economy

Revealing Altruism *

Academic journal article Review of Social Economy

Revealing Altruism *

Article excerpt

Abstract The traditional neoclassical economic view that preferences are "inscrutable" and can only be revealed through behavior would, if true, make it difficult for altruists to make efficient decisions. We question whether altruism should be defined as a preference that can be revealed, or indeed, as a preference at all. One alternative is to treat altruism as a disposition that can be strengthened or weakened by social institutions.

Keywords: altruism as a preference, altruism as a disposition, neoclassical economics, institutions


Economics' stock in trade is preferences. But where those come from and how exactly they work is opaque to economists who subscribe to Stanley Jevons' claim that "every mind is inscrutable to every other mind" (1911: 4). Mid-century champions of "revealed-preference behavioralism" in economics seized upon that phrase to justify their attempts "to explain ... behavior without reference to anything other than behavior" (Little 1949: 90), "to develop [a] theory of consumer's behavior freed from any vestigial traces of the utility concept" (Samuelson 1938: 71, 1947, see also Robbins 1932, 1938, Little 1957: chs 3-4, cf. Sen 1973).

Things which are inscrutable cannot be compared, assessed, or measured. How convenient, then, to deem them irrelevant! Familiar consequences flow from an emphasis on surface behavior rather than what lies behind it (preferences, motives, intentions, goals, aspirations, principles, commitments and so on). Most conspicuously, behavioralist blinkers preclude interpersonal utility comparisons, thus enshrining milquetoast Pareto comparisons as the only permissible bases for social judgments (Bergson 1938). Furthermore, revealed-preference theorists conveniently assume that preferences are fixed and exogeneously given, thus deflecting attention from their social formation and evolution (Mirrlees 1982: 68).

In this paper, we argue that the "inscrutability hypothesis" deserves closer attention. If true, it would have direct and profound consequences for how individual agents lead their lives, economically and otherwise. The consequences of particular interest to us concern altruists and the various paradoxes that they might suffer if the only things they could know about the preferences of those with whom they interact were revealed through behavior.

Economists ordinarily conceive of altruism as "agent A's preference for satisfying agent B's preferences." Here we query whether the notion of a "preference" is apt at either location in that familiar formula. First we ask whether altruism is a preference that can be easily and reliably revealed. In Section II, we discuss the conundrum of mutual altruists: each internalizes the preferences of the other; but assuming "inscrutability" of preferences, neither knows what the other wants (or hence what she herself wants) until the other has behaviorally revealed his preferences, which he cannot fully know (or hence reveal) until she acts to reveal hers behaviorally in turn. In Section III we extend the discussion to various strategic complications for altruists in revealing their preferences to others and in surmising the preferences of others. Given all these problems, what altruists probably do is to focus their caring concern not on the subjective preferences of those whom they hope to help, but rather on their objective good, as we surmise in Section IV.

We then question whether altruism should be represented as a preference at all. We argue that it is better to represent it instead as a disposition. Seeing it so emphasizes the larger motivational structure (of motives, intentions, goals, aspirations, principles, commitments) underlying the more surface manifestations (altruistic behaviors and the altruistic preferences lying just below the surface of behavior). Dispositions, importantly, are things that can be dynamically reinforced or weakened through different patterns of social interaction. …

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