AU's Coffee Controversy - Social Choice and Individual Values

Returning to AU on Tuesday evening, I picked up a copy of the American Weekly and quickly became apprised of the contending point’s of view in AU’s coffee controversy. Should AU welcome Starbucks or a lesser known “socially responsible” chain that served “fair traded coffee” only. How could this be decided in a manner that appropriately reflected the “preferences” of the “AU community.”

My musings on the controversy immediately brought to mind a classic paper in game theory/welfare economics, Kenneth Arrow’s Social Choice and Individual Values. (From a Google perusal, I learned that Arrow, born in 1921, is still living and writing) and that the classic I read, years ago as a doctoral student, was based on his doctoral dissertation. Unlike many dissertations, Arrow’s paper, and his “impossibility theorem” was a profoundly important contribution to both economic and democratic theory. For serious students of economic theory, political theory and mathematics, reading this paper and developing a deep understanding of its implications, should be a must.

The focus of Arrow’s work is what economists call the “aggregation of preferences.” To oversimplify, Arrow asks the question, is it possible to aggregate individual preferences so than they define “social choices” that meet some criteria of rigor and consistency. Within the context of his models, he demonstrates that this is “impossible” under many circumstances. The principal problem is the role of “intense minorities” and the utility metrics associated with their preferences. Suppose those who prefer Starbucks are in the majority, but those who prefer the fair traded alternative feel much more intensely about their position. How is one to arrive at a meaningful “social choices” that aggregates both of these preference sets appropriately.

As I understand it, AU’s Director of Housing and Dining Services is tasked with the responsibility of aggregating divergent “individual values” into a meaningful “social choice.” The work of Kenneth Arrow, Nobel Laureate and one of the world’s greatest living economists, suggests that her task will not be an easy one.