Coase Colored Glasses


Archive for April 27th, 2011


The Advancement of Social Welfare

It was strangely fitting for me to read Epstien’s conclusion at the end of our semester. I was intrigued by his idea that his arguments were made to show that property rights are necessary for as he puts it the ‘advancement of social welfare’. That statement caught my idea. Because in the midst of all the talk of the ‘reasoning’ behind the choices that are being made in legislature, government, judiciary, relationships, pirates ships is the idea that somewhere, somehow, this ¬†understanding of these principles, specifically the analysis of public choice and another economic ideas, will benefit us.

Everything that we have learned we must realize is being learned selfishly, for one self interest or another we put in the effort to read, go to class, analyze and discuss these ideas. We don’t do it just for the ideas sake, we do it because we stand to gain something. Some sort of welfare or utility is being gained by our actions.

That’s the biggest thing that I’ve come to realize is that my actions are entirely selfish. Even the ones that I deem as entirely unselfish are somehow and in someway helping me to gain utility. I don’t give money to a charity because I’m just charitable, however much I’d like to think that is the case, I give it because I get a ‘good feeling’ or I get some sort of utility for my efforts.

Now this isn’t a new idea to any of us, so you might be wondering, what’s my point? Well, Epstien mentions ‘social welfare’ which relates to maximizing utility over a large group of people. As I thought about this I realized that the reason a rational person would care about the welfare of a group only if there was some advantage for them in the long run. Wither they be decreased costs in the long run which then mean a greater utility gained over a long period of time, or an increase in utility the only reason a rational being would maximize social welfare would be if there own personal welfare would increase.

Which leads me to wondering, what increase in welfare was Epstien hoping to gain by writing about property rights. Putting the idea that he as writing purely to gain money aside, we can assume that he was writing because he believes with increased property rights would come somehow to him an increase in his overall welfare.

But the interesting thing is even if his idea was wrong, say completely wrong, like, he thinks Barak Obama isn’t a natural born citizen wrong, he can still make a ‘rational’ decision to write about about his idea if he perceives that he would benefited from it.

Reality then doesn’t matter as much as perception of reality does. What we perceive to be true in a sense becomes our truth and the basis for which we make rational decisions. If I perceive something to be true then any attempt to maximize my utility can indeed increase my utility because I get some benefit, real or imaged, out of my effort.

This was especially clear to me when I was looking at the coverage of Barak Obama’s birth certificate. Because in reality the effectiveness of these tactics would be minimal. You wouldn’t get him removed from office, but somehow people get utility from trying. The effort is what gives them utility.

Utility. That’s what its all about. Maximizing it personally is what everything we’ve learned is about.