Liberty

To be edited

Much aof this post is based around the the Liberal Paradox (see here for an exposition, http://en.wikipedia.org/wiki/Liberal_paradox).
My attempt at a short summary of the paradox is this.
In a society where everyone has a choice over some decision (minimal liberty), then society may reach a situation where it is possible to make at least one person better off and no-one else worse off (Pareto inefficient). The reason this is so undesirable is that unlike much political or economics thought there, a change in the desicions doesn't imply re-distribution of utility, there is no loser. You are not taking utility/wealth from one individual or group to give to another. Everyone can be better off.

Does that sound, particularly important? Well I think it should as it seems to contradict one of the basic fundamentals of economics that free markets are efficient. Equally it has mainy implications for sociology, politics etc.

My understanding of the intuition behind the result is basiclly driven by allowing people to care about the decisions that others make. This can then lead to a cordination failure, where you might take a decision which is optimal for you, but which someone else dislikes and vice versa. In many ways the situation resembles a trade scenario.

Are there are any ways out of this paradox? Well the one which seems most immediately obvious is that perhaps the preference structures when the paradox occurs look odd. Is it really likely someone will care more about, what you do than about what they do themselves? I actually think this is certainly possible; but suppose people limited their preferences to states of the world over which they have influence and are indifferent to all decisions of other people. Clearly this lets you out of the paradox. People choose over some decision, they are the only one's that have preferences over that decision and therefore clearly the best state of the world is chosen.

This might seem an attractive idea. In fact it is similar to what some liberals might argue over many situations, that people should not be allowed to care or influence things that don't affect them, such as the religous beliefs or sexual preferences of someone else.

This is likely to become problematic however. Where is the line drawn between what affects others and what doesn't? The fact someone drives a car may seem to only affect them, but still it takes up road space and denies that to others. In some sense every individual's existence clearly affects others. Perhaps its useful to think of this in a chaotic sense, with all things interlinked to a greater or lesser extent. But is this not problematic, now we have individual's being affected all around the world but they are unlikely to have preferences at all over most of those situations and in the ones that they do they may be unable to tell what it is they need to have preferences over and what caused that.

The problem is the line becomes very grey, clearly everything effects each other even in a minor way, the mere act of existing in one place prevents someone else from standing there. (also in a (less relevent) Chaos type of way).

Tbc