There is a common presumption, especially in the field of economics, that people are better off when they can satisfy their preferences and desires. Thus, it is concluded that it is possible to measure people's well-being by measuring how well they satisfy their preferences and what they are willing to pay in order to do so. But is this reasonable?

Brian Leiter argues that it isn’t:

Why can't well-being be equivalent to preference-satisfaction? Simple answer: there are lots of preferences whose satisfaction makes people worse off, and this happens all the time. Why? Because people are dumb or irrational or lacking in information or addicted, and so on.

Case 1: Anyone in the grips of addiction will have preferences whose satisfaction (another shot of heroin, another whisky, another hand of blackjack, etc.) will make them worse off.

Case 2: Anyone lacking relevant information will have preferences whose satisfaction will make them worse off. Examples:

(a) John wants to be a professional philosopher, so he satisfies his preferences to go to grad school in philosophy and pursue such a career, only to discover too late that he isn't smart or creative enough to pull it off--all this time and effort has been wasted, and he is much worse off (if he had gone, instead, to grad school in economics, where being able to make a rational argument is not necessary, he would have been much better off);

(b) Richard really wants Mexican food, and so goes to a neighborhood dive, to satisfy his preference; he does not know that sanitary conditions at the dive are so poor, that the salsa is full of salmonella, and he dies of food poisoning two days later;

Does this matter? Absolutely. If preference-satisfaction does not track reliably with one’s well-being, then it makes no sense to base social, legal, or economic polices on preference-satisfaction if your goal is people’s well-being. Unfortunately, determining what will contribute most to people’s well-being isn’t very easy. Preferences aren’t hard to determine, so it’s understandable why some would latch on to them. The question is, what else might we use in addition to preferences?

A philosopher of science responded to Leiter’s arguments and wrote about the ways in which people demonstrate serious deficiencies in being able to make decisions:

Sheena Iyengar, at Columbia University’s Business School has done fascinating work on the psychology of consumer choice. Economists typically suppose that having more choices is always better, because it increases the chances of securing utilities. The problem is, there are many cases in which having more choices reduces those chances. Iyengar has shown that people who had fewer rather than more choices when making a purchase were (1) more likely to actually make a purchase, and (2) more likely to be satisfied with the purchase once made.

Eric Johnson’s research showed that when faced with actual choices about insurance coverage, people are tyrannized by default options. ... In the early 1990s, insurance providers gave drivers in Pennsylvania and New Jersey a choice between two coverage options regarding the right to sue. Drivers in both states were given the choice of a reduced right to sue in exchange for lower insurance rates. But the default option was different for each state. ... Now, the two states are demographically similar, so we should expect that the two states have the same percentages selecting the same options. But not so. In fact, the results are startling. Motorists’ choices followed the default options in each state.

Now, an economist might say that this is just another 'information problem,' and that people should make their decisions based upon careful study of all of the available information. But this is not only ineffective normative advice, it is not even good advice to implement since this stance on all relevant issues would crowd out the activities most crucial to happiness, and likely well-being too. If you had to ferret out the health code violations of all of the Mexican restaurants you might eat at, check the information for insurance coverage, identify the ingredients of cans of beans at the grocery, and so on, you wouldn’t be able to drink with friends, spend leisure with your spouse, read to your children at bedtime, etc. Never mind that making the necessary calculations (even if it were advisable) is, for practical purposes, an intractable problem.

This suggests another reason that well-being isn’t preference satisfaction: Preferences are often complex and ill-formed, and so they are not especially transparent to the agent. We are pretty bad at predicting which courses of actions will satisfy us. Work on affective forecasting by people like Gilbert and by Kahneman displays people chasing instruments to satisfy a preference that, in the end only frustrates them, and alienates them from the activities that makes for satisfied, even happy, people. ... Researchers like Ed Diener, Martin Seligman, and Daniel Kahneman actually study the natural conditions of well-being in a scientifically rigorous way, and not surprisingly it doesn’t look like preference satisfaction (on any of the familiar construals of that notion) is the route to it.

As the above notes, economists who assume that people are rational actors and make rational choices have no viable models to explain and predict what happens when people deviate from the ideal. Other sciences — or perhaps I should say real sciences — like physics do have such models.

If people don’t make good decisions, does that mean others should decide for them? No — after all, we are still working with people whom we already admitted don’t make good decisions. It does mean, however, that we shouldn’t consider a person’s preferences to be the first and last word on what is best for them. We may not have anything better to offer, but we shouldn’t therefore assume that nothing better is possible.

Read More:

• Guide to Ethics and Morality
• News About Ethics