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The HDI is definitely a lot better than GDP as a measure, though it's not complete. If you're into this, I recommend reading up on the human capabilities approach, which also influenced the HDI.

Measures which focus on happiness instead of GDP or wealth can easily fall into the trap of narrow utilitarianism, the capabilities approach is more complete in that sense.

by nanne (zwaerdenmaecker@gmail.com) on Fri Oct 20th, 2006 at 08:49:21 AM EST
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Interesting.  I hope the human capabilities approach continues to get more traction.

Measures which focus on happiness instead of GDP or wealth can easily fall into the trap of narrow utilitarianism

Miguel also mentions "utility" in a comment above.  Are you referring to the same thing?  What exactly do you mean by "utlitarianism"?

Truth unfolds in time through a communal process.

by marco on Fri Oct 20th, 2006 at 09:06:06 AM EST
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I think any measure which is one-dimensional lends itself to narrow utilitarianism.

Utilitarianism is a theory of ethics which lends itself to being reduced to "maximising utility". Utility has a technical meaning in economics and decision theory.

Those whom the Gods wish to destroy They first make mad. -- Euripides

by Migeru (migeru at eurotrib dot com) on Fri Oct 20th, 2006 at 09:12:46 AM EST
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Indeed.

I would add that the technical economic concept of 'utility' has its roots in utilitarian ethical theory.

by nanne (zwaerdenmaecker@gmail.com) on Fri Oct 20th, 2006 at 09:50:18 AM EST
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Actually, the logarithmic utility of money was introduced by one of the Bernoullis in the mid-1700's, several decades before Jeremy Bentham called his philosophy "utilitarianism". I think utilitarianism was, in fact, an attempt at "rationalising" ethics and the philosophy was always an attempt at doing what the modern mathematical theory of utility does.

Those whom the Gods wish to destroy They first make mad. -- Euripides
by Migeru (migeru at eurotrib dot com) on Fri Oct 20th, 2006 at 09:53:56 AM EST
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You learn something new every day.

What I still want to do is moderate this 'technical measure' distinction. Utility as it is used in economics does contain all kinds of philosophical assumptions about mindstates, etc. You can't talk about the declining marginal utility of consumption without making this utility partly a subjective measure of gratification, for instance.

by nanne (zwaerdenmaecker@gmail.com) on Fri Oct 20th, 2006 at 10:11:02 AM EST
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Wikipedia:
In probability theory and decision theory the St. Petersburg paradox describes a particular lottery game (sometimes called St. Petersburg Lottery) that leads to a random variable with infinite expected value, i.e. infinite expected payoff, but would nevertheless be considered to be worth only a very small amount of money. The St. Petersburg paradox is a classical situation where a naïve decision theory (which takes only the expected value into account) would recommend a course of action that no (real) rational person would be willing to take. The paradox can be resolved when the decision model is refined via the notion of marginal utility or by taking into account the finite resources of the participants.

The paradox is named from Daniel Bernoulli's presentation of the problem and his solution, published in 1738 in the Commentaries of the Imperial Academy of Science of Saint Petersburg (Bernoulli 1738). However, the problem was invented by Daniel's cousin Nicolas Bernoulli who first stated it in a letter to Rémond de Montmort from 9th of September 1713.

Daniel was the first to solve the problem by showing that even though the expected payoff of the game is infinite, the expected log-payoff (i.e., the expected utility of playing the game) is finite.

Those whom the Gods wish to destroy They first make mad. -- Euripides
by Migeru (migeru at eurotrib dot com) on Fri Oct 20th, 2006 at 10:16:53 AM EST
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You can't talk about the declining marginal utility of consumption without making this utility partly a subjective measure of gratification, for instance.

I agree.  Bernoulli himself said:

"There is no doubt that a gain of one thousand ducats is more significant to the pauper than to a rich man though both gain the same amount."

And Gabriel Cramer, a few years before Bernoulli, refers to the role of "good sense":

"the mathematicians estimate money in proportion to its quantity, and men of good sense in proportion to the usage that they may make of it."


Truth unfolds in time through a communal process.
by marco on Fri Oct 20th, 2006 at 10:49:18 AM EST
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Thanks for the explanation.

I am not sure what you mean by "narrow utilitarianism" as opposed to "utilitarianism" tout court.  But isn't the policy approach that you and I agree on (as opposed to the "marketing" approach I am suggesting to replace "GDP" with some other unitary notion like HDI or median PPP income) just another form of utilitarianism as well, to wit, "negative utilitarianism"?

Truth unfolds in time through a communal process.

by marco on Fri Oct 20th, 2006 at 11:00:54 AM EST
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Basically, if you go to that article, Bentham's utilitarianism is narrow, because it assumes simple pleasure and pain to be the two absolutes of ethics, whereas JS Mill's utilitarianism isn't as narrow.

What I personally meant by a narrow utilitarianism is a utilitarianism which uses a methodological individualism to form a societal calculus of happiness (unqualified, in the sense of Bentham), of which the maximation is taken to be the end-all of decision-making (individual as well as collective).

by nanne (zwaerdenmaecker@gmail.com) on Fri Oct 20th, 2006 at 02:20:10 PM EST
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Certainly we don't want to encourage the idea that a single parameter should be the final arbiter of the health or quality of an individual life or society.

However, until we come up with truly a "complete"/multi-dimensional approach or mindset to replace the GDP/DJI-oriented mindset, and until people are ready to make such a drastic switch to such a different mindset, would it not be helpful to find some transitional position where we allow people to continue working with an easily graspable, easily comparable single number, like PPP median income or, better, HDI, to start to introduce such "revolutionary" notions as including fairness, socioeconomic equality, freedom from ignorance, freedom from government oppression, and so on, beyond mere GDP?

Truth unfolds in time through a communal process.

by marco on Fri Oct 20th, 2006 at 09:03:51 PM EST
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What would be interesting as an intermediate solution is using a variety of measures. There are many measures in circulation right now. Competitiveness, perceived corruption, commitment to development, openness of the economy, etc. etc. etc.

These don't provide the basis for a unitary ranking but can be used as an overview. Might be an idea for a diary, actually (I probably won't have the time to do that properly until next weekend, though).

by nanne (zwaerdenmaecker@gmail.com) on Sat Oct 21st, 2006 at 01:19:40 PM EST
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If you do have time to do it next weekend, you can count on me to be one of your first readers!

Truth unfolds in time through a communal process.
by marco on Sat Oct 21st, 2006 at 07:45:33 PM EST
[ Parent ]

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