Christopher Bliss: Life‐Style and the Standard of Living
Christopher Bliss: Life‐Style and the Standard of Living
Abstract and Keywords
Sen agrees with Bliss's conclusion regarding the impossibility of making comparisons where changes in life‐styles and preferences are involved, but raises problems with Bliss's methodology and accuses Bliss of methodological conservatism. Sen takes the issue specifically with Bliss's constant‐taste methodology as it can provide wrong answers in comparing living standards. Sen concludes that changing tastes over commodity bundles and altering life‐styles would not prevent a reasoned judgment against the enforced deprivation of living standards.
Christopher Bliss has provided an illuminating examination of the concept of the standard of living and the possibility (in fact, the impossibility) of making comparisons when changes in life‐styles and preferences are involved. I have some problems with the methodology he uses, which is largely derived and developed from contemporary mainstream economic theory, but even when we disagree — in ways that I shall presently discuss — I do not in the least doubt that his arguments are powerful and demand serious consideration and scrutiny. I would argue that the sceptical position that Bliss outlines can lead to a different conclusion — less destructive than the one he seems to prefer. But any constructive thesis, to be well‐founded, must address what Bliss presents as the nihilistic implications of changing preferences and non‐comparable life‐styles.
1 Conservative Destructivism
Bliss's strategy can be described as one of relying on methodological conservatism (the programme of the first three sections) to draw radically destructive conclusions about living standard comparisons (in the rest of the paper). He begins his essay defending a relatively narrow view of the standard of living, largely in line with standard practice in mainstream contemporary economics. Bliss endorses Pigou's distinction between economic welfare and welfare in general, and wrestles — not entirely happily — with Pigou's (1952: 11) pointer to ‘economic welfare’ as ‘that part of social welfare that can be brought directly or indirectly into relation with the measuring rod of money’. Bliss also reveals his sympathy for what he sees as ‘the positivist approach’ that ‘says that measures should be defined in terms of observables’. He explains and defends the case for concentrating on (1) the set of commodity bundles (the ‘consumption set’) from which a consumer can choose one, and (2) the particular commodity bundle that he happens to choose (thereby revealing his ‘preference’). He elaborates on his distrust of any notion of utility other than what can be based on observed choices over certain and uncertain prospects. He discusses how — with the assumption of given tastes — the person's preference map can be recovered from observed choices and how index numbers of living standards may be constructed based on such observations. He explains the strategy of ‘the classical model’, its extensions involving lotteries, and their use in ‘general equilibrium’ theory. All this — up to and including Section 3 — is largely defensive, (p.438) with a few variations, of the received methodological beliefs in standard neo‐classical economics.
What emerges most powerfully from the first three sections of the paper is Bliss's acceptance of the unique relevance, for living standard comparisons, of ‘consumption sets’ and ‘preferences’. If preferences are constant and given, no‐nonsense comparisons of real incomes or living standards can be made in the way that neo‐classical theory has made familiar. But at this point Bliss abandons the smugness of the standard theory, and proceeds to explain the difficulties arising from different tastes. He discusses, with remarkable clarity, the problems created by taste formation (and the resulting ‘endogeneity’ of tastes) and by intertemporal variations in tastes (and the resulting ‘regrets’ regarding past decisions). Given the reliance on standard economic methodology, based on constant‐taste comparisons, everything looks very dicey at this point, and Bliss enlivens the dilemmas with excellent discussions of well‐chosen illustrations.
Bliss's definition of a life‐style involves ‘a joint specification of a consumption set and preferences’, the two together being identified by Bliss as the person's ‘life‐style’. When preferences differ over time, or between regions, the standard approach based on constant‐preference analysis proves quite unequal to the task of comparing different life‐styles. Along with that crumbles the traditional method of comparing living standards. Bliss gives examples of ‘differences of viewpoints’ that ‘will always intrude themselves into comparisons across life‐styles’. (p. 430).
It also becomes impossible, within the chosen methodology, to judge whether people who migrate benefit from the migration, for example, to a city, since ‘tastes are altered by the city and the possibility of return to the old life‐style can be forfeited’. Also, the achievement of ‘better health, longer life, less hunger, etc.’ may be at the cost of ‘the disappearance of old life‐styles’, for example, when ‘the loggers attack the forest’, or when development policies are carried out by ‘governments, World Bank officials, and various do‐gooders’. Bliss's radical scepticism ends with the rhetorical question: ‘Can we be so sure that it is good that they should disappear?’
2 Consequences and Methods
Let me comment, first, on one of the implications of Bliss's last argument, which is, in fact, an inescapable consequence of the methodology that Bliss has chosen to adopt. The result of Bliss's argument is not, as the rhetorical question may induce one to assume, a censure of the destructive consequences of economic changes that ruin our traditional life‐styles. It is only an assertion of ‘non‐comparability’. Even if it happens to be the case that when the loggers attack the forest, millions of others experience an utter destruction of cherished ways of living and its replacement by a new life‐style adapted to the reduced (p.439) circumstances (in addition to hunger and deprivation generated by the creation of deserts and the loss of livelihood), Bliss's methodology would not permit him to denounce this change on that ground and could not give reason for resisting it. The new situation vis‐à‐vis the old would be simply non‐rankable. There is no decidable gain or loss in life‐styles as people adjust to their reduced circumstances and seek other ways of living, with other preoccupations. We would be permitted the luxury of gently wondering about those lost life‐styles (‘Can we be sure that it is good that they should disappear?’), but we would not have any basis, on this theory, for demanding, ‘Foul, stop it!’ One does not have to be an all‐out ‘green’ to miss something assertive in this theory.
It is not only the ‘governments, World Bank officials, and various do‐gooders’ and others (social activists, economic planners, radical political parties) working for a change who need a theory that enables them to make comparisons over alternative social states and life‐styles. So do those who resist change. Bliss's methodological nihilism undermines both support for and rejection of change.
The sources of the impossibility Bliss identifies is clear enough. If a theory that was devised to deal specifically with constant‐taste comparisons is to serve as the basis of variable‐taste contrasts, we are likely to get an impasse. That is an argument for looking for a different theory. The type of methodological conservatism that Bliss adopts cannot but lead to the radical scepticism with which he ends up.
To recognize this elementary fact must not, however, be seen, in itself, as a rebuttal of Bliss's argument. It could be that assertive statements regarding comparisons of life‐styles and living standards are indeed insupportable when preferences change, and the arguments of ‘the greens’, ‘the reds’, and ‘the blues’ may all be without foundation. We have to show why methodological conservatism of the kind adopted by Bliss need not be forced on us.
3 Inadequacy of Constant Tastes
I will begin with arguing that even when tastes are constant, the constant‐taste methodology — based on comparisons only of commodity bundles — can give patently wrong answers in comparing living standards. The problem arises from the fact that tastes and preferences, in the sense discussed by Bliss, are defined over bundles of commodities (the elements are ranked in ‘consumption sets’), whereas an assessment of living standards has to look beyond that ‘space’.
Consider the following case. Person 1 has commodity bundle x and person 2 has y. They have just the same tastes and preferences over this pair, each preferring x to y. (We can easily assume — if we want — that they also have exactly the same ordering over all commodity bundles.) But person 1 is handicapped in some way relevant to the life she can lead, for example, she is disabled (and needs expensive prosthesis and care), or is a chronic depressive, (p.440) or lives under terrible environmental conditions, or has to spend her life nursing a small child or an ill relative. (The variety of ways in which such a handicap can arise indicates how general the problem under discussion is.) The constant‐taste comparison will assert that person 1 has the higher standard of living of the two if standard of living is to be seen simply as a matter of commodity bundles. But this can be absurdly wrong if the life that person 1 can lead is severely reduced by the handicap in question. It is deeply misleading to assume that if ‘all individuals have the same tastes, the level of utility enjoyed at the two stations must be equal’ (p. 422).
Indeed, if we were permitted to talk to persons 1 and 2 (and not just to ‘observe’ their economic choices), they might both agree on a ranking of living standards based on combinations of (i) commodity holdings, and (ii) other relevant circumstances of the respective persons, for example, in descending order: (x, 2), (y, 2), (x, 1), (y, 1). In terms of ‘observed choices’ over commodity bundles both 1 and 2 can be found to choose x over y, and a living standard comparison based only on what would put person 1 (disabled, depressed, environmentally deprived, or overburdened, as she is) above 2, since 1 owns x whereas 2 owns y. But both agree that 2 has a higher living standard (even with y) than 1 has (with x), reflected by the placing of (y, 2) above (x, 1) by both. The constant‐taste methodology is caught in a trap created by its own informational parsimony.1
4 Capability and the Measuring Rod of Money
This problem with the constant‐taste methodology relates to the view that Bliss rejects early on in his paper when he asserts that ‘a rich individual who suffers from an untreatable disease which seriously interferes with the enjoyment of life’ has ‘a high standard of living’ though he is ‘in poor health’. Bliss's position is based on a clear distinction between living standards, which depend only on commodity bundles, and the broader notion of ‘quality of life’. Bliss attributes to me the view that ‘the standard of living should embrace all aspects of the quality of life’, and while there may be scope for doubting that simple diagnosis (on some related distinctions, see Sen et al., 1987), it is certainly my view that the commodity bundle is informationally quite inadequate to capture the complex notion of the standard of living.
In defence of his position, Bliss points to the distinction between the case in which poor health is ‘accidental’ (as with the morbid, rich man) and one in which it arises from ‘material deprivation’ (as in a poor, developing country). In Bliss's view, ‘in the first case it is excluded from the standard of living, in the second case it is included’. There is much sense in making a distinction (p.441) between the two cases, but is the case of the rich man with ill health really so simple?
First consider a case in which the ill health takes the form of the person having to spend much of his income on medical treatment. Despite his being rich with a high income, he may have little money left under these circumstances to buy reasonable food, clothing, shelter, and so on. It would be odd to describe his standard of living as high just because he has a large income, and indeed it would be much more natural to see him as a person with a low living standard even in primarily economic terms.
Next, consider a change—or an alternative scenario—in which the person's ailment is no longer treatable, so that he receives no treatment and suffers terribly, even though he now has more money left to spend on other non‐medical commodities. He is clearly worse off as a result of this change, and it would be very odd to see the change as one that raises his standard of living! If he had a low living standard in the earlier case, his living standard is no higher now (as a result of his ailment ending up being untreatable). But in either case, this person with a poor living standard is precisely the rich man in bad health described by Bliss. It seems not unreasonable to resist Bliss's view that this miserable and deprived person is really enjoying a high living standard.
I would argue that unless we want to tie ourselves in knots, it is wise not to dissociate the notion of the standard of living from the actual standard or characteristics of a person's living, no matter how high his income—or how opulent his consumption set—might be. In fact, this notion of standard of living is not really at odds even with Pigou's (1952) definition of economic welfare as ‘that part of social welfare that can be brought directly or indirectly into relation with the measuring rod of money’ (p. 11), with which Bliss begins his paper. Since a person's ability to function—what has been called his or her ‘capability’—can generally be enhanced by having more money, we can link the deprivation in the space of functionings to deprivation in terms of income. For any specified functioning vector (or some specified index of functionings), we can calculate for each person—given her circumstances—the minimal amount of money that she needs to achieve that functioning vector (or that functioning index). A person with ill health (or other handicaps, such as unfavourable environmental conditions, or exacting obligations to others, or disability) would need more money to achieve the same level of functioning.2 If person 1 has a lower income than she needs (given her circumstances) to achieve that specified level of functionings, while 2 has a higher income than he needs for that level (given his circumstances), then—in this comparison—person 1 has a lower standard of living than person 2, even though in crude, unadjusted terms 1 may have the higher income of the two.
(p.442) This is how the broader notion of living standards—related to functionings and capabilities—may be brought ‘indirectly into relation with the measuring rod of money’. This ‘indirect’ use of ‘the measuring rod of money’ is closely related to the direct use of comparisons in the space of functionings.3 For the rest of this commentary, I shall not return to this alternative representation in terms of ‘the measuring rod of money’ and will concentrate instead directly on the achievement and deprivation of the capability to function.
5 Commodities, Capabilities, and Valuation
In evaluating living standards, should preferences be seen in terms of rankings of commodity vectors or of n‐tuples of functionings? Bliss does not distinguish between a person's preferences and what he or she has reason to value. That distinction can be important, and I have tried to argue elsewhere (Sen, 1985; Sen et al., 1987) that reasoned valuations provide a basis for the assessment of well‐being and living standards in a way that mere preferences do not. However, I shall not further pursue that distinction here.
What is immediately relevant here is the space over which valuations may be defined. If it is accepted that what matters ultimately is a person's capability to function (or, alternatively, the actual functioning n‐tuple), then it would be a mistake to concentrate on the person's consumption set (or, alternatively, the chosen commodity bundle). Even if we confine our attention to constant‐preference (or constant‐valuation) comparisons, the constancy sought has to be that over the functioning space.4
The distinction is by no means trivial. The valuation of the commodity bundles (the ‘means’) to achieve the same functioning n‐tuples (the ‘ends’) can vary greatly with social and cultural conditions. The importance of this type of variation had been noted by both Aristotle and Adam Smith.5 Indeed, this was the starting point of Smith's analysis of intersocietal variations in commodities that are seen as ‘necessary’, since the same level of basic functionings (p.443) requires different commodity bundles in different societies.6 For example, the commodities needed for the functioning of ‘appearing in public without shame’ may be very different in, say, India or China than in England or France. Adam Smith put the point thus:
A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But, in the present times, through the greater part of Europe, a creditable day‐labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them.7
Even when life‐styles vary greatly, with different preferences over commodity bundles (e.g. particular types of clothing), there may be considerable congruence in the valuation of basic functionings relevant for the analysis of living standards (e.g. the ability to appear in public without shame).
When there is substantial uniformity in the evaluation of functioning bundles or capabilities, it may be possible to make intersocietal comparisons of living standards, even though the preferences in the commodity space are quite different given different social conditions and life‐styles. Thus, variations in preference over commodity bundles may not necessarily have the nihilistic implications that Bliss expects. Since there is likely to be much greater stability in treasuring important functionings than in ranking commodity bundles, the distinction could be, in practice, quite substantial (as Adam Smith emphasized).
6 Partial Orders and Assertive Judgements
It is, of course, quite possible that even in the space of functionings there will often be some intersocietal variations in evaluation. From here we can go in one of two different directions. The ‘objectivist’ position—well stated and defended by Aristotle—is to seek a uniformity of valuation of functionings in terms of ‘human flourishing’, based on reasoning.8 Such an objective identification could involve the rejection of some of the actual valuations of the functioning space that people may—‘wrongly’—endorse.
The other approach is to leave as incomplete the specific comparisons that are affected by this multiplicity of evaluative orderings. The shared rankings can be separated out from the discordant ones. The ‘intersection’ of the valuations that people have reasons to endorse will generate partial orderings of functioning n‐tuples and capability sets, and these will often be quite extensive.9 This is one of many fields of social evaluation in which the partial (p.444) order—rather than a complete or linear ordering—is the natural ranking format. Despite the incompleteness, this approach is still far from the nihilism in favour of which Bliss argues.
Finally, what about ‘the loggers attacking the forest’? The newly created deserts may force people to a different life‐style and to different tastes over commodity bundles, but in the space of functionings they may be identifiably more deprived in terms of their abiding valuation of health, security, happiness, and peace. Even if the valuations of these functionings vary a little between persons and over time, there can still be large ‘intersections’ in the rankings in the appropriate space, and the deprivation may be demonstrable in terms of shared valuations. There will then be good reasons to shout, ‘Foul, stop it!’, and not just to speculate as to whether we can ‘be so sure that it is good’ that the old life‐style ‘should disappear’. Changing tastes over commodity bundles and altering life‐styles would not prevent a reasoned judgement against the enforced deprivation of living standards.
Bliss's insightful and foundational questions call for, I believe, a different class of answers than the one he himself endorses. But despite our differences, I cannot emphasize adequately the inescapable need for constructive theories to face Bliss's challenging questions. On that there is complete agreement.
Aristotle. The Nicomachean Ethics. English translation. W. D. Ross, Aristotle: The Nicomachean Ethics. Oxford: Oxford University Press, 1925.
Nussbaum, M. C. (1988). ‘Nature, Function and Capability: Aristotle on Political Distribution,’ Oxford Studies in Ancient Philosophy, suppl. vol.
—— (1990). ‘Aristotelian Social Democracy’, in G. Mara and W. Richardson (eds.), Liberalism and the Good. New York: Routledge, Chapman and Hall.
Pigou, A. C. (1952). The Economics of Welfare. London: Macmillan.
Sen, A. K. (1984). Resources, Values and Development. Oxford: Blackwell, and Cambridge, Mass.: Harvard University Press.
—— (1985). ‘Well‐being, Agency and Freedom: The Dewey Lectures 1984’, Journal of Philosophy, 82.
—— et al. (1987). The Standard of Living. Cambridge: Cambridge University Press.
—— (1992). Inequality Reexamined. Oxford: Clarendon Press.
Smith, Adam (1776). An Inquiry Into the Nature and Causes of the Wealth of Nations. Republished London: Home University, 1910.
(1) In Bliss's characterization of ‘life‐styles’, we have, in addition to preferences, the person's ‘consumption set’, i.e. not just the bundle actually chosen by him, but the set of bundles from which he can choose any one. It is easy to extend the example discussed here to cover this broader basis of comparison.
(2) This is so if that level of functioning is at all achievable with more money income. If not the person would need, as it were, an infinite income to achieve this level of functioning, so that she would be always short of that required amount.
(3) Formally, just as a person's capability to function is dependent inter alia on his or her income, there would be standardly an ‘inverse function’ relating any given bundle of functionings to the minimal income needed by a particular person to achieve that bundle, given other conditions. What we have to compare in this representation are the different persons' actual incomes vis‐à‐vis the respective ‘minimally needed incomes’ for specific functioning bundles. If no level of income would permit person 1 to achieve the index value of functioning that 2 can in fact achieve, then person 2 must be seen as having a deficiency in living standard no matter how high an income he or she enjoys. On this, and some related technical problems, see my paper in this volume, and also Sen (1992).
(4) Note that while there is an important issue as to whether to concentrate on capability to function or on achieved functionings, it must be remembered that both are defined in the same space, namely, the space of functionings (on this see Sen, 1992, and my paper in this volume). A functioning n‐tuple is a point in that space, whereas a capability set is a set of such points.