In viewing environmental policy in this way - as the expression of public values rather than as the satisfaction of subjective preferences - I am endorsing a Kantian or "deontological" rather than a welfare-economic approach to governance. At the same time, I recognize and appreciate -at least I wish I could attain personally - the blessings of a "gd jb w hi pa," that is, a standard of living associated with economic prosperity.
The Kantian or deontological approach to valuation does not try to measure subjective preferences to assign a "value" to environmental goods. As a general rule, a Kantian approach lets markets price goods competitively in the belief that an economy that responds to price signals generally performs better in terms of employment, productivity, inflation, and so on, than a society in which scientific managers allocate resources in terms of their own conception of "value" - that is, the conception of the good defined by their social theory. In other words, the Kantian believes that insofar as the goal is economic - that is, the overall performance of the economy - decentralized or diffused activity based on competitive prices and well-defined property rights works better than centralized planning based on expert estimates of "benefit," "utility," or "welfare."
In this book I contrast the welfare-economic with the Kantian approach to governance. The two frameworks for decision making differ in the way they conceive the decision maker. In the welfarist perspective, the decision maker is the individual conceived as an ordered set of preferences. These preferences are assumed to reflect judgments the individual makes about what is good for her or him. Individuals are expected to know the maximums they would bid to possess or the minimums they would ask to relinquish all sorts of goods or possible outcomes. These amounts - willingness to pay (WTP) and willingness to accept (WTA) -are thought to measure the "value" or "benefit" of any good or social state to any individual.
The Kantian approach agrees that public policy should respond to the values individuals profess. These comprise moral principles and aesthetic judgments, not simply consumer preferences. People assign all the values, in other words, but one should not confuse (1) values that represent what the individual believes to be good or right for the community with (2) preferences the individual entertains about his or her consumption opportunities.8 People defend beliefs about a good society in social and political institutions while they pursue consumer preferences in competitive markets. These are different frameworks for pursuing different kinds of ends.
In political institutions and processes, individuals must defend what they believe with reasons that will persuade others; in markets, individuals pay the competitive price for goods they want to buy. The views and arguments citizens present about what they believe society ought to do should be considered in a different context from goods people purchase to benefit themselves. A Kantian distinguishes the opposition of ideas (which has to be settled by argument) from differences of interest (which could be settled by monetary exchange).
Both the Kantian and the welfare-economic approaches provide frameworks for rational choice - one by appealing to principles and procedures appropriate to the identity of the decision maker in a given situation, the other by emphasizing consequences for preferences. The first framework asks the political and ethical question: What do we stand for as a society? Which conception of the common will or the public interest is correct? Which rules should we follow with respect to problems such as pollution, the extinction of species, or wilderness preservation, given our history, culture, and sense of shared identity? The second framework asks the question posed by welfare economics: Which outcome will maximize net social welfare defined or measured in terms of the aggregate satisfaction of preferences ranked by WTP and taken as they come?
James G. March, who teaches political science at Stanford University, provides a theoretical understanding of these two alternative approaches to decision making. When decision makers adopt the economic approach, March explains, they choose among given alternatives "by evaluating their consequences in terms of prior preferences." When they adopt the principle-based or Kantian framework, decision makers "pursue a logic of appropriateness, fulfilling identities or roles by recognizing situations and following rules that match appropriate behavior to the situations they encounter." As members of a society, individuals determine who they are and what they stand for as a community. Institutions, political arrangements, and processes of public conversation become central. The duties of deliberation take precedence over the algorithms of aggregation. We ask who we are, not just what we want. In this framework, according to March, the reasoning process "is one of establishing identities and matching rules to recognized situations."9
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