People From New York City

"Invention is here interpreted broadly as the production of knowledge. From the viewpoint of welfare economics, the determination of optimal resource allocation for invention will depend on the technological characteristics of the invention process and the nature of the market for knowledge."

"During this period I also came-across Kenneth Arrow's now famous Social Choice and Individual Values. Although I hardly did full justice to that pioneering work, it emboldened me to take a stab at a much more formal presentation than I had encountered in political theory. The form of my two chapters certainly owes something to my having ploughed my way through that book. For better or worse, Arrow's book must also have influenced my decision to present parts of the argument in a formal notational system (though only in footnotes and appendices)."

"If the total number of alternatives is two, the method of majority decision is a social welfare function which satisfies Conditions 2–5 and yields a social ordering of the two alternatives for every set of individual orderings."

"Learning, as studied by psychologists, closely resembles sequential analysis in some aspects. Learning experiments usually consist of a series of trials in which the subject’s choices are sometimes rewarded and sometimes not. The individual, after making many choices, eventually begins to discriminate between the proper response and the improper one. At some point, presumably, he could terminate the experiment, at least in the sense of disregarding the further observations and making the same choice each time."

"Index numbers are, of course, desired for purposes other than to measure the cost of living. One obvious possibility is to consider some subset of cost-of- living items, such as food. The logic of the preceding argument goes through precisely provided we assume that the distribution of food expenditures in any period among different foods depends only on the total volume of food expenditures and is independent of the prices of other goods, for any given total volume of food expenditures. This does not deny substitution between foods and other commodities, but we assume that the total effect of this substitution is already reflected in the choice of a volume of food expenditures. In a broad way, similar considerations apply to the pricing of producers’ goods, which should be interpreted as reflecting indirectly consumers’ preferences. However, there is undoubtedly a good deal more in the detailed working out of the theory that has never been developed."

"In an ideal socialist economy, the reward for invention would be completely separated from any charge to the users of information. In a free enterprise economy, inventive activity is supported by using the invention to create property rights; precisely to the extent that it is successful, there is an underutilization of the information."

"In a capitalist democracy there are essentially two methods by which social choices can be made: voting, typically used to make ‘political’ decisions, and the market mechanism, typically used to make ‘economic’ decisions. In the emerging democracies with mixed economic systems Great Britain, France, and Scandinavia, the same two modes of making social choices prevail, though more scope is given to the method of voting and to decisions based directly or indirectly on it and less to the rule of the price mechanism. Elsewhere in the world, and even in smaller social units within the democracies, the social decisions are sometimes made by single individuals or small groups and sometimes (more and more rarely in this modern world) by a widely encompassing set of traditional rules for making the social choice in any given situation, for example, a religious code."

"In addition to ignoring game aspects of the problem of social choice, we will also assume in the present study that individual values are taken as data and are not capable of being altered by the nature of the decision process itself. This, of course, is the standard view in economic theory (though the unreality of this assumption has been asserted by such writers as Veblen, Professor J. M. Clark, and Knight) and also in the classical liberal creed. If individual values can themselves be affected by the method of social choice, it becomes much more difficult to learn what is meant by one method’s being preferable to another."

"Dynamic analysis may have deeper implications if we depart from the analysis of stationary states. The frim must now serve some additional roles. In the absence of futures markets, the firm must serve as a forecaster and as a bearer of uncertainty. Further, from a general equilibrium point of view, the forecasts of others become relevant to the evaluation of the firm's shares and therefore possibly of the firm's behavior."

"Perhaps as important is the relation between the existence of solutions to a competitive equilibrium and the problems of normative or ."

"The government may be regarded as a decision-making entity. Among the decisions it makes are the formation of economic policy and the collection of economic-statistical information. In all modern nations the economic policies of the government are significant activities, if for no other reason than the high proportion of national income which passes through the Treasury; but of course in many countries much more ambitious economic planning is aimed at, though not necessarily achieved. Economic statistics, on the other hand, if one is to judge by expenditures, form only an insignificant proportion of a government's activities and are the least developed precisely in those underdeveloped countries which have the greatest felt needs for economic plans."

"Government economic policy, like almost any realistic decision problem, has two fundamental characteristics: it is sequential and it is uncertain."

"L. Walras first formulated the state of the economic system at any point of time as the solution of a system of simultaneous equations representing the demand for goods by consumers, the supply of goods by producers and the equilibrium condition that supply equal demand on every market."

"The businessman may be compared with two other types of individuals who are essentially concerned with behavior under uncertainty ― the scientist and the statistician. The scientist must choose, on the basis of limited information, among the innumerable logically conceivable laws of nature, a limited number. He cannot know whether his decisions are right or wrong, and, indeed, it is none too clear what is meant by those terms. There is a long history of attempts to reduce scientific method to system, including many which introduce probability theory, but it cannot be said that any great formal success has attended these efforts. If we were to compare the businessman to the scientist, we would be forced to the melancholy conclusion that little of a systematic nature can be said about the former’s decision-making processes. The statistician typically finds himself in situations more similar to that of the businessman. The problem of statistics can be formulated roughly as follows. It is known that one out of a number of hypotheses about a given situation is true. The statistician has the choice of one of a number of different experiments (a series of experiments can be regarded as a single experiment, so that drawing a sample of any size can be included in this schema), the outcome of any one of which is a random variable with a probability distribution depending on which of the unknown hypotheses is correct. On the basis of that outcome, the statistician must take some action (accept or reject a hypothesis, estimate the mean of a distribution to be some particular value, accept or reject a lot of goods, recommend a change in production methods, and so on), the consequences of which depend on the action taken and on the hypothesis that is actually true."

"Traditional welfare economics shows that there are certain of these combinations that will be preferred by all the voters, which permits us to eliminate the others without too much discussion. However, there will always remain an irreducible kernel of possibilities among which the choice rests on a combination or aggregation of individual ethical attitudes about distribution."

"In view of the magnitude of an economic system, it would take only a very small percentage of improvement in economic stability or growth to make almost any conceivable data collection worthwhile. The situation is analogous to reported results of the use of linear programming in industry; the gains are small in proportion to previous profit levels but still very much larger than the costs of the programming. No country is adequate in respect to its data. In particular the underdeveloped countries, with their ambitious programs, might well ponder whether or not the marginal productivity of investment in better economic statistics is perhaps not higher than almost any conceivable alternative; they have more need and fewer data."

"Ever since I encountered Hicks’s Value and Capital while I was still a graduate student, I had the aim of completing and extending his vision of the economic system in its purest form. This was not because I believed that the economic world was perfectly competitive or that it was clearly self-equilibrating; after all, Chamberlin, Robinson, and Keynes were dominant intellectual influences, and I had the even more powerful influence of the facts of massive unemployment and large corporations. But the idea that the economic world was a general system, with all parts interdependent, seemed (and seems) to me to be an essential of good analysis. I regret what appears to be a revival of single-market thinking both among monetarists and among some of the younger empirical analysts. Then as now, the only game in town that offered a general system of economic interdependence was general competitive equilibrium, an idea to which the name of Leon Walras is imperishably linked. At least, such a system would provide a starting point for analysis of the market’s imperfections."

"There is no need to enlarge upon the importance of a realistic theory explaining how individuals choose among alternate courses of action when the consequences of their actions are incompletely known to them. It is no exaggeration to say that every choice made by human beings would meet this description if attention were paid to the ultimate implications."

"Decision theory, as it has grown up in recent years, is a formalization of the problems involved in making optimal choices. In a certain sense — a very abstract sense, to be sure — it incorporates among others operations research, theoretical economics, and wide areas of statistics, among others."

"Among economic phenomena which have in some way been tied up with the existence of uncertainty, three classes may be distinguished: (1) those which by their very definition are concerned with uncertainty; (2) those which are not related to uncertainty by definition but nevertheless have no other conceivable explanation; (3) those whose relation to uncertainty is more remote and disputable."

"The formal structure of a decision problem in any area can be put into four parts: (1) the choice of an objective function defining the relative desirability of different outcomes; (2) specification of the policy alternatives which are available to the agent, or decision-maker, (3) specification of the model, that is, empirical relations that link the objective function, or the variables that enter into it, with the policy alternatives and possibly other variables; and (4) computational methods for choosing among the policy alternatives that one which performs best as measured by the objective function."

"Strictly speaking, decision theory really is concerned only with the fourth part of the division given above, that is, the determination of the computational methods for optimization. Given the determination of the other three factors―the objective function, the range of policy alternatives, and the model―the ideal picture is that someone, presumable the firm that hires the operations researcher, hands him, on a silver platter, an objective function. By talking to the engineers, or by looking into a few scientific laws, he determines the policy alternatives available and also the model."

"I was influenced very early on, my first time at the—I spent a year at the Center at Palo Alto, the Center for Advanced Study there, and I became a good friend of Kenneth Arrow. I think he was not at the Center that year but he lived in Palo Alto. [...] Marvelous man. Both as a person and as a scholar. And I became as I say greatly influenced by the way in which he dealt with phenomena. [...] So I was influenced by that as a model, a way of thinking more abstractly, perhaps, than customary, about democratic theory. Making clear the premises, the epistomological assumptions and matters of that kind, and I think that sort of set the stage. And then once you get in of course, into that field, which was not highly— I don’t know how to put this properly—as a formal field of political science was not highly developed at the time, once you get into it you quickly become aware of how rich the potential subject matter is. One of the enormous changes, perhaps anticipating your question, one of the changes in the world is the extraordinary increase in the number of countries that, by the standards that we use today, can be called democratic—always, I repeat this and repeat this, but, always keeping in mind the difference between the ideal and the threshold at which we now accept a country as democratic, or a polyarchy as I would say. And the enormous increase in the number of those available for study—when I was a graduate student, there were maybe half a dozen countries that you could study: France and Britain and, I’m not quite sure of Canada at that time . . . and then the expansion created out there a field . . . that was both a challenge and an opportunity."

"Speaking very broadly, almost any human action involves choice; the external environment delimits a range of possible actions at any given moment but does not usually reduce that range to a single alternative. The formulation of a theory of human action in some sphere as a theory of choice means its presentation as a functional relation associating with each possible range of alternatives a chosen one among them."

"No group is able, and few are willing, to stand up to the potent homogenizing forces of advanced industrial society. All Americans, from African Americans to Greek Americans, buy the same goods, look at the same movies and television, pursue the same activities and have—more or less—the same desires for success."

"Multiculturalism is not the opposite of assimilation, but its product."

"Endless discussions of multiculturalism proceed from the unsubstantiated assumption that numerous distinct “cultures” constitute American society. Only a few historians or observers even consider the possibility that the opposite may be true: that the world and the United States are relentlessly becoming more culturally uniform, not diverse."

"What does cultural pluralism signify in the absence of economic pluralism? Perhaps the question seems meaningless. Yet the apparent lack of meaning signals the intellectual retreat. The economic structure of society—call it advanced industrial society or capitalism or the market economy—stands as the invariant; few can imagine a different economic project. The silent agreement says much about multiculturalism. No divergent political or economic vision animates cultural diversity. From the most militant Afrocentrism to the most ardent feminists, all quarters subscribe to very similar beliefs about work, equality and success. The secret of cultural diversity is its political and economic uniformity. The future looks like the present with more options. Multiculturalism spells the end of utopia."

"David Bromwich has wondered whether intellectuals today would oppose an economic slavery if it lacked any racial or cultural dimension."

"Once upon a time leftists and radicals talked of liberation or the abolition of work. Now the talk is about full employment."

"Though the ancient world understood that work was a curse, modern industrial society spreads its gospel. The working class, Lafargue hopelessly hoped, must reject the work fetish."

"Over the years and against conventional wisdom, utopians sustained a vision of life beyond the market. … Georg Lukács set forth a theory of the “old and new culture” in which he argued that the socialist economy was not the goal; it was simply a precondition for humanity to advance to a new and humane culture. Most radicals do not understand that political power and economic reorganization is not the end-all, stated Lukács. The goal is not a new economic order, but freedom from an obsession with economics."

"The left once dismissed the market as exploitative; it now honors the market as rational and humane. The left once disdained mass culture as exploitative; now it celebrates it as rebellious. The left once honored independent intellectuals as courageous; now it sneers at them as elitist."

"Skinner … decrees … the abolition of freedom by way of behavior modification and a souped-up environment, in the name of a new “scientific” value—survival. The irony is that freedom and individuality have only existed in their mangled bourgeois form; to propose junking them in the name of survival is to propose the very society we now have, one that subsists exactly by an ethos of survival, paying lip service to freedom and the individual while rewarding the victors and punishing the victims. Freedom and individuality have never been more than adornments for an ugly environment of survival of the fittest."

"Instead of ideologically synchronizing contradictions, or assigning them to separate halls of the academy, critical theory seeks to articulate them."

"The disdain for culture expressed by Johst and Fanon is not identical, however. Both despise the deceit of culture, but for opposite reasons. For Johst, culture is in itself a fraud, the cheap talk of weaklings; for Fanon, culture deceives by reneging on its promises. Johst and the Nazis hated culture itself; Fanon hated its hypocrisy, a very different notion."

"Those seeking to work out the relationship between Marxism and psychoanalysis have not been immune to the intellectual division of labor that severs the life nerve of dialectical thought."

"The laws of social development are not identical with the laws in the natural sciences. The content of the social laws is not nature but second nature: coagulated history. They are manmade, but they also make men; they are dialectical, at once subject and object."

"[Carl] Rogers’s Encounter Groups … is copy for the campaign of self-manipulation in an age of mass manipulation. … The notion here is simple: the real person is locked within the artificial, the role, and needs a little encouragement to step out into the fresh air. As with the neo-Freudians, society is conceived as an external factor, an outside force acting on the individual, but not decisively casting the individual from without and from within. The mechanical conception, severing within and without, and presupposing that only the outside is prey to social forces, is assumed or stated throughout the post-Freudian writings."

"Multiculturalism relies on an intellectual rout, the refusal or inability to address what makes up a culture."

"The neat division between roles and real selves reduces society to a masquerade party. Yet not even plastic surgery can heal the psychic disfigurements. The social evil reaches into the living fibers; people not only assume roles, they are roles."

"Existentialism is bourgeois ideology in the hour of its defeat."

"Rat and behavioral psychology … mirror the actual inhumanity of reality. Rat psychology is human psychology where a total society has trained human beings to be creatures of stimulus and response, i.e. rats. “Insofar as the hardening of society has reduced men more and more to objects,” wrote Adorno, “methods which convey this are no sacrilege. … The method serves freedom in that it wordlessly testifies to the prevailing unfreedom.” Or, as Adorno and Horkheimer wrote in another context: “The usual objection that empirical social research is too mechanical, too crude, and too unspiritual [ungeistig] shifts the responsibility from that which science is investigating to science itself.” … The idealistic misconception of … behavioral methods … shifts the evil from the social conditions that coerce men and women into standardized roles onto the social science that is merely registering these conditions."

"What must be acknowledged, for example the prevalence of anxiety, is grafted onto man’s essence as if it grew there. Such is the tried and tested method of the apologist: what is social in origin is presented as natural."

"The professional philosopher in keen competition with the natural scientist resolves to be more certain about less."

"To fasten on the facts while forgetting the social content is to fall prey to a mystifying immediacy. In an antagonistic society, appearance and essence, immediacy and mediacy, diverge; things are not what they seem to be."

"Dialectical logic is loyal to the contradictions, not by the reasoning of “on the one hand and the other” but by tracing the contradictions to their fractured source."

"The post-Freudians … have fallen victim to the ravages of the intellectual division of labor."

"As Adorno wrote of Anna Freud’s book, it evinces “the reduction of psychoanalysis to a conformist interpretation of the reality principle.”"

"“When material needs are largely satisfied,” writes Carl Rogers, “as they tend to be for many people in this affluent society, individuals are turning to the psychological world, groping for a greater degree of authenticity and fulfillment.” The clear distinction between material and psychic needs is already the mystification; it capitulates to the ideology of the affluent society which affirms the material structure is sound, conceding only that some psychic and spiritual values might be lacking. Exactly this distinction sets up “authenticity” and “fulfillment” as so many more commodities for the shopper. Rather it is the fissure itself which is the source of the ills—between work and “free” time, material structure and psychological “world,” producers and consumers."