The Social Optimum and the Ordinalist Theory of Utility

The need to fix a specific form of individual utility functions in the social welfare functional proposed by A. Bergson raises the question of the presence of metrics, the uniform application of any of which to all members of the society under consideration makes possible to solve this problem on an objective basis. The method of “composite good” is considered, which involves linking the numbering of hypersurfaces of indifference with the “scalar value” of the bundle of goods with an invariable structure belonging to each of them. It is shown that its use in the maximization of the “bergsonian” under given resource constraints makes it possible to determine the social optimum with an accuracy of the selected composition of the respective bundle and the indicators of its “marginal numbering” for each member of society. The limitations of this method make it necessary to appeal to the very nature of the ordinalist paradigm. Arguments are given in favor of the “logical castling” of the concepts of “utility” and “preference” and the transition on this basis to an “updated cardinalist approach”, within the framework of which the concept of “utility” would be applied not to individual goods, but to their bundles. In the final part of the article, it is shown that the Bergsonian format is not necessary, as its author believed, for the social optimum to be characterized by Pareto efficiency. The same result can be achieved by using the function of social utility, the arguments of which are the quantities of goods at the disposal of each member of society, provided the constraints of the corresponding model include the demand for the equality of the marginal rates of substitution of goods for each other for all members of society.

individual and social choice, Bergson’s functional of social welfare (“bergsonian”), the method of “composite good”, reconciliation of individual and public interests, the ordinalist theory of utility, “renewed cardinalism”