The Possibility of Sociai Choice^ By AMARTYA SEN* "A camel," it has been said, "is a horse de- predicaments of the different individuals within signed by a committee." This might sound like the society? How can we find any rational basis a telling example of the terrible deficiencies of for making such aggregative judgements as "the committee decisions, but it is really much too society prefers this to that," or "the society mild an indictment. A camel may not have the should choose this over that," or "this is socially speed of a horse, but it is a very useful and right"? Is reasonable social choice at all possi- harmonious animal—well coordinated to travel ble, especially since, as Horace noted a long long distances without food and water. A com- time ago, there may be "as many preferences as mittee that tries to reflect the diverse wishes of there are people"? its different members in designing a horse could very easily end up with something far less I. Social Choice Theory congruous: perhaps a centaur of Greek myth- ology, half a horse and half something else—a In this lecture, I shall try to discuss some mercurial creation combining savagery with challenges and foundational problems faced by confusion. social choice theory as a discipline.' The imme- The difficulty that a small committee experi- diate occasion for this lecture is, of course, an ences may be only greater when it comes to award, and I am aware that I am expected to decisions of a sizable society, reflecting the discuss, in one form or another, my own work choices "of the people, by the people, for the associated with this event (however immodest people." That, broadly speaking, is the subject that attempt might otherwise have been). This I of "social choice," and it includes within its will try to do, but it is, I believe, also a plausible capacious frame various problems with the occasion to address some general questions common feature of relating social judgments about social choice as a discipline—its content, and group decisions to the views and interests of relevance, and reach—and I intend to seize this the individuals who make up the society or the opportunity. The Royal Swedish Academy of group. If there is a central question that can be Sciences referred to "welfare economics" as the seen as the motivating issue that inspires social general field of my work for which the award choice theory, it is this: how can it be possible was given, and separated out three particular to arrive at cogent aggregative judgments about areas: social choice, distribution, and poverty. the society (for example, about "social welfare," While I have indeed been occupied, in various or "the public interest," or "aggregate poverty"), ways, with these different subjects, it is social given the diversity of preferences, concerns, and choice theory, pioneeringly formulated in its modem form by Arrow (1951),^ that provides a general approach to the evaluation of, and choice over, alternative social possibilities (in- ^ This article is the lecture Amartya Sen delivered in cluding inter alia the assessment of social wel- Stockholm, Sweden, December 8, 1998, when he received the Alfred Nobel Memorial Prize in Economic Sciences. fare, inequality, and poverty). This I take to be The article is copyright © The Nobel Foundation 1998 and is published here with the permission of the Nobel Foun- dation. ' This is, obviously, not a survey of social choice theory * The Master's Lodge, Trinity College, Cambridge, CB2 and there is no attempt here to scan the relevant literature. lTQ, England. For helpful comments and suggestions, I am Overviews can be found in Alan M. Feldman (1980), Pra- most grateful to Sudhir Anand, Kenneth Arrow, Tony At- santa K. Pattanaik and Maurice Salles (1983), Kotaro Su- kinson, Emma Rothschild, and Kotaro Suzumura. I have zumura (1983), Peter J. Hammond (1985), Jon Elster and also benefited from discussions with Amiya Bagchi, Pranab Aanund Hylland (1986), Sen (1986a), David Starrett (1988), Bardhan, Kaushik Basu, Angus Deaton, Rajat Deb, Jean Dennis C. Mueller (1989), and more extensively in Kenneth Drfeze, Bhaskar Dutta, Jean-Paul Fitoussi, James Foster, J. Arrow et al. (1997). Siddiq Osmani, Prasanta Pattanaik, and Tony Shorrocks. ^ See also Arrow (1950, 1951, 1963). 349 350 THE AMERICAN ECONOMIC REVIEW JUNE 1999 reason enough for primarily concentrating on discipline first came into its own around the time social choice theory in this Nobel lecture. of the French Revolution. The subject was pio- Social choice theory is a very broad disci- neered by French mathematicians in the late eigh- pline, covering a variety of distinct questions, teenth century, such as J. C. Borda (1781) and and it may be useful to mention a few of the Marquis de Condorcet (1785), who addressed problems as illustrations of its subject matter these problems in rather mathematical terms and (on many of which I have been privileged to who initiated the formal discipline of social choice work). When would majority rule yield unam- in terms of voting and related procedures. The biguous and consistent decisions? How can we intellectual climate of the period was much infiu- judge how well a society as a whole is doing in enced by European Enlightenment, with its inter- the light of the disparate interests of its different est in reasoned construction of social order. members? How do we measure aggregate pov- Indeed, some of the early social choice theorists, erty in view of the varying predicaments and most notably Condorcet, were also among the miseries of the diverse people that make up the intellectual leaders of the French Revolution. society? How can we accommodate rights and The French Revolution, however, did not liberties of persons while giving adequate rec- usher in a peaceful social order in France. De- ognition to their preferences? How do we ap- spite its momentous achievements in changing praise social valuations of public goods such as the political agenda across the whole world, in the natural environment, or epidemiological se- France itself it not only produced much strife curity? Also, some investigations, while not and bloodshed, it also led to what is often directly a part of social choice theory, have been called, not inaccurately, a "reign of terror." In- helped by the understanding generated by the deed, many of the theorists of social coordina- study of group decisions (such as the causation tion, who had contributed to the ideas behind and prevention of famines and hunger, or the the Revolution, perished in the flames of the forms and consequences of gender inequality, discord that the Revolution itself unleashed or the demands of individual freedom seen as a (this included Condorcet who took his own life "social commitment"). The reach and relevance when it became quite likely that others would of social choice theory can be very extensive do it for him). Problems of social choice, which indeed. were being addressed at the level of theory and analysis, did not wait, in this case, for a peace- n. Origiiis of Social Choice Theory and fully intellectual resolution. Constructive Pessimism The motivation that moved the early social choice theorists included the avoidance of both How did the subject of social choice theory instability and arbitrariness in arrangements for originate? The challenges of social decisions social choice. The ambitions of their work fo- involving divergent interests and concems have cused on the development of a framework for been explored for a long time. For example, rational and democratic decisions for a group, Aristotle in ancient Greece and Kautilya in an- paying adequate attention to the preferences and cient India, both of whom lived in the fourth interests of all its members. However, even the century B.C., explored various constructive pos- theoretical investigations typically yielded sibilities in social choice in their books respec- rather pessimistic results. They noted, for ex- tively entitled Politics and Economics.^ ample, that majority rule can be thoroughly However, social choice theory as a systematic inconsistent, with A defeating B by a majority, B defeating C also by a majority, and C in tum defeating A, by a majority as well.'* ' "Arthashastra," the Sanskrit word (the title of Kauti- lya's book), is best translated literally as "Economics," even though he devoted much space to investigating the demands * See Condorcet (1785). There are many commentaries of statecraft in a conflictual society. English translations of on these analyses, including Arrow (1951), Duncan Black Aristotle's Politics and Kautilya's Arthashastra can be (1958), William V. CSehrlein (1983), H. Peyton Young found respectively in E. Barker (1958) and L. N. Rangarajan (1988), and McLean (1990). On the potential ubiquity of (1987). On the interesting medieval European writings on inconsistency in majority voting, see Richard D. McKelvey these issues see, for example, Ian McLean (1990). (1979) and Norman J. Schofield (1983). VOL 89 NO. 3 SEN: THE POSSIBILITY OF SOCIAL CHOICE 351 A good deal of exploratory work (often, diagnosis of a deep vulnerability in the subject again, with pessimistic results) continued in Eu- that overshadowed Arrow's immensely impor- rope through the nineteenth century. Indeed, tant constructive program of developing a sys- some very creative people worked in this area tematic social choice theory that could actually and wrestled with the difficulties of social work. choice, including Lewis Carroll, the author of Alice in Wonderland (under his real name, C. L. m. Welfare Economics and Obituary Notices Dodgson, 1874, 1884). When the subject of social choice was revived Social choice difficulties apply to welfare in the twentieth century by Arrow (1951), he too economics with a vengeance. By the middle was very concerned with the difficulties of group 196O's, William Baumol (1965) judiciously re- decisions and the inconsistencies to which they marked that "statements about the significance may lead.