Welfare maximisation as a framework?
Posted November 14, 2008on:
The more I read political blogs in the lead up to the election, the more I realise that media and politicians like to paint issues in a way where they have arbitrary goals – such as “increasing the domestic sale of New Zealand made goods”.
However, there is no reason to presume that these goals should be the purpose of policy – after all we do not know how or why these goals were formed. The overall goal of policy should be to improve net happiness in society – a broad, and also relatively arbitrary goal.
Now there is no way that people would agree on the set of policies that would do this. But if we set ourselves up to achieve a certain “goal” then we are implicitly taking into account the costs and benefits of the policies that will achieve this goal. In current media and political analysis the focus appears to be on the “good” of a policy or the “bad”, which is fine. However, they don’t directly try to weigh the two before making a conclusion deciding to either go with one or the other. This is irritating because it is the weighting of costs and benefits that is the primary purpose of the political party – which implies that the functioning of political parties and the media is not transperant.
Ultimately, it is important to remember that whatever party is in power will have certain value judgments surrounding the weight of these costs and benefits, which will be revealed by the way they discuss certain policies. We cannot trust a single political party or media organisation to give us these weights and as a result the “goals” that they focus on are misnomers – reducing carbon emissions has a cost, getting people to buy domestic products has a cost, there is no free lunch.