Front Page Titles (by Subject) Personal vs. Social Goods - Literature of Liberty, January/March 1978, vol. 1, No. 1
The Online Library of Liberty
A project of Liberty Fund, Inc.
Search this Title:
Also in the Library:
Personal vs. Social Goods - Leonard P. Liggio, Literature of Liberty, January/March 1978, vol. 1, No. 1 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
About Liberty Fund:
Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.
This work is copyrighted by the Institute for Humane Studies, George Mason University, Fairfax, Virginia, and is put online with their permission.
Fair use statement:
This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit.
Personal vs. Social Goods
“Liberty, Unanimity and Rights.” Economica (UK), 43 (1976): 217–245.
To maximize social good must the abstract ranking of personal preferences infringe on individual rights?
We first examine the literature stimulated by the author's original argument as to the “impossibility of the Paretian liberal.” We then reappraise the issue in the light of what has emerged in this literature. We also present some additional results which may clarify the nature of the conflict between the Pareto principle and the principle of personal liberty, which may explain its implications for social choice.
At first sight, two principles seem to stand at loggerheads. The Pareto principle states that if everyone in a society prefers a certain social state to another, we must choose the former, which we take to be better for the society as a whole. According to the principle of personal liberty, each person should remain free to decide what should happen in certain personal matters (the “protected sphere” in Hayek's terminology). In choices over these matters, we must take whatever he thinks is better to be better for the society as a whole, no matter what others think.
The “impossibility of the Paretian liberal” maintains that the liberty principle conflicts with the Pareto principle if contradictory cycles of social preference must not arise for any set of individual preferences. To illustrate this, suppose a book may be read by John or Bob or by neither. Suppose further, that John prefers that neither should read it to his reading it himself. But he would next prefer to do so rather than have Bob read it. Suppose, however, that Bob would prefer John to read it rather than read it himself. But he would next prefer to read it himself rather than let it go unread. On grounds of individual freedom we find Bob's reading the book socially superior to letting it go unread since Bob wants to read it. But since both John does not want to read it, we find letting it go unred socially superior to his reading it. But since both John and Bob agree in preferring that John rather than Bob should read it, John's reading it is “Pareto-superior” to Bob's reading it and so a preference cycle exists.
We find the Pareto principle un acceptable as a universal rule, since it may not be consistent with even a minimal degree of individual liberty. Yet the idea that a community cannot reject preferences unanimously held by members of that community, carries great force.
To save the Pareto principle and at the same time make it consistent with the liberty principle, we suggest making a distinction between a person preferring x to y and wanting this preference to count in determining social choice. This leads to the idea of a conditional version of the Pareto principle. This revised version stipulates that a person respects the rights of other if and only if he wants a part of his total preference to count when one can combine it with other people's preferences over their respective “protected spheres.”
To revise the Pareto principle as a universal rule does not amount to an outsider overriding the wishes of members of the community. The difference between “preferring x to y” and wanting one's preference to “count in favor of x against y” is relevant here. To guarantee a minimal amount of individual liberty requires that certain parts of individual rankings not count in certain social choice. Indeed, in some cases, the persons involved may agree to this.