The Metric of Opportunity

Economics and Philosophy, 14 (1998), 307-337 Copyright Cambridge University Press
THE METRIC OF OPPORTUNITY
ROBERT SUCDEN
University of East Anglia
There is a long tradition in economics of evaluating social arrangements by the extent to which individuals' preferences are satisfied. This is the tradition of welfarism, which has developed from nineteenth-century utilitarianism. Increasingly, however, the presumption that preferencesatisfaction is the appropriate standard for evaluating social arrangements is being challenged by an alternative view: that we should focus on the set of opportunities open to each individual. If this approach is to have any power, it requires some metric of opportunity, analogous with the well-developed metric of preference which is fundamental to welfarist analysis. For the most part, political philosophers have been content with a broad-brush approach, treating the problem of constructing an index of opportunity as a minor detail that can safely be left to others to fill in. Meanwhile, an economic literature on the measurement of opportunity has begun to develop, but largely in isolation from the philosophical debate about the significance of opportunity. Economists have proposed measures of sets of opportunities in terms of the extent of freedom of choice that those sets offer. These measures are characterized by formal axioms and are applied to abstract models. The axioms themselves are typically justified by casual appeals to intuition, with little discussion of what freedom of choice is, or why it matters.
An earlier version of this paper was presented at a conference on Justice, Political Liberalism and Utilitarianism in Honour of John Harsanyi and John Rawls at the University of Caen in June 1996. I am grateful to Richard Arneson, Herve Moulin, Philip Pettit, John Weymark and other participants at that conference, and also to Sebastino Bavetta, Prasanta Pattanaik, Amartya Sen, Yongsheng Xu, and four anonymous referees for advice and comments. The research was supported by the Risk and Human Behaviour Programme of the Economic and Social Research Council of the UK (award number L 211 252 053) and by the Centre for Applied Ethics of the University of British Columbia.
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In this paper, I try to integrate the insights of these two literatures. I discuss the reasons why opportunity might be held to have value. In the light of these reasons, I review various suggestions about how opportunity should be measured. I argue for a particular general approach to the measurement of opportunity, which focuses on 'potential preferences' the range of preferences that a person might have had. Finally, and more tentatively, I suggest one way in which this approach might be made operational.
1. IS WELFARISM COHERENT?
Welfarism is a theory of the social good. According to this theory, the social good is determined by, and only by, the well-being of individuals; and the well-being of each individual is measured by the extent to which his or her preferences are satisfied. Welfarism differs from its parent theory, classical utilitarianism, in that it measures well-being in terms of preference-satisfaction rather than pleasurable mental states.
Recently, theorists have questioned whether welfarism is coherent,
given the standard economic interpretation of preference. The modern concept of preference was introduced into economic theory by Vilfredo Pareto (1906/1972) as a means of avoiding the difficulties created by the absence of any credible psychological underpinning for the traditional hypothesis that economic actors seek to maximize pleasure. Since no one-dimensional measure of pleasure has ever been found, it is not clear what that hypothesis means, or how it can be tested; and its most meaningful component - the assumption that individuals are concerned only with their own mental experiences - is of doubtful validity. Pareto's move was to substitute revealed preference for pleasure as the basic concept in economic theory. Preference may be understood as the mental state associated with an actual or potential act of choice. (Potential choices are relevant because one can have a preference over options without actually choosing between them: such preferences describe one's dispositions towards choice.) Since a person's preferences are revealed in his choices, preference is a much more operational concept than pleasure. As a result of this move, Pareto claims, economic theory 'acquires the rigour of rational mechanics; it deduces its results from experience, without bringing in any metaphysical entity' (1906/1972, p. 113). Welfarism is the result of making a similar move in normative economics. The problems that Pareto's move creates for normative economics have only recently been fully appreciated (Thomas Scanlon, 1991; John Broome, 1991; James Griffin, 1991; Daniel Hausman and Michael McPherson, 1996, pp. 71-83). The root of the difficulty is this. Welfarism makes judgments about the social good. These judgments must be made
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from some viewpoint. It is common to imagine that this is the viewpoint of an ethical observer, who has equal concern for the well-being of all individuals. Welfarism supposes that the ethical observer endorses each person's preferences as a measure of that person's well-being. But why should she? To begin to answer this question, we need to attribute to the ethical observer some substantive theory of individual well-being. But then what grounds do we have for supposing that each individual's revealed preferences measure well-being according to that theory? The whole point of Pareto's move is to avoid the need to go behind preferences; but without enquiring into the reasons for a person's preferences, how can the ethical observer endorse those preferences? John Rawls makes a similar point, but in relation to his conception of the veil of ignorance, and in relation to individuals' 'rational plans of life' rather than their preferences. To see how Rawls's argument might apply to welfarism, suppose that each individual's preferences reflect that individual's considered judgments about his own well-being. Then preferences can be taken to coincide with rational plans of life. A decision theorist might easily suppose that behind Rawls's veil of ignorance, each 'contracting party' would aim to maximize his expected utility, interpreted as the average utility of all individuals in the society beyond the veil. That would amount to making a welfarist calculation of the social good. But Rawls argues that the idea of such an expectation is incoherent: ... what we cannot do is to evaluate another person's total circumstances, his objective situation plus his character and system of ends, without any reference to the details of our own conception of the good. If we are to judge these things from our own standpoint at all, we must know what our plan of life is. (1971, p. 174) Translating this into the language of welfarism, Rawls is denying the coherence of the idea of an ethical observer who evaluates each person's well-being in terms of that person's preferences. If the ethical observer is to make judgments about people's well-being, she must do so in terms of her own theory of well-being. Notice that this problem, at least, does not arise in classical utilitarianism. Classical utilitarianism rests on a substantive theory of individual well-being - the theory that well-being consists of pleasurable experiences. It then aggregates well-being, understood in that way. Preferences are relevant for utilitarianism only to the extent that people prefer those options that in fact maximize their pleasure. As this is not a paper about welfarism, I shall not say more to substantiate the claims I have just made. Instead, I shall consider two
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strategies that remain open to normative economics if welfarism is rejected. One strategy is to retain from welfarism both its concern with the social good and the principle that the social good is made up of the wellbeing of individuals, but then to develop a substantive theory of individual well-being. The other strategy is to focus on fairness or justice rather than on the social good, and not to aggregate well-being at all. On this latter view, justice is to be understood as a property, not of social outcomes, but of the rules that govern individuals' interactions. Individuals are left free to choose their own actions, within the constraints set by those rules. Each individual's actions are consistent with his revealed preferences, but no one else has to endorse those actions as contributing to the individual's well-being. Each of these strategies admits the possibility that opportunities matter. In the case of the first strategy, we might develop a theory in which an individual's well-being depends on the opportunity set he faces (that is, the set of options from which he is free to choose), and not solely on what he actually chooses. In the case of the second strategy, a procedural theory of justice has to specify an initial distribution of rights between individuals. One attractive idea is that this initial distribution should give equal opportunities to everyone. In Sections 2 and 31 discuss some of these possibilities in more detail. These discussions are not intended to develop a unified account of the value of opportunity. On the contrary: the various arguments I shall consider rest on different, and sometimes incompatible, philosophical foundations. In the later sections of the paper, I consider the implications of these different arguments for the measurement of opportunity.
2. OPPORTUNITY AS A COMPONENT OF WELL-BEING
Is freedom of choice, independently of the outcomes that are chosen, an element of individual well-being? Much of the recent discussion of this idea in economics can be traced back to Amartya Sen's (1970) famous paper on the 'impossibility of a Paretian liberal'. In that paper, Sen sets out the 'liberal' principle that there are certain personal matters on which a society should allow each individual absolute freedom, and argues that that principle can conflict with welfarism. This principle can be interpreted in different ways. In his 1970 paper, Sen interprets it in terms of the concepts of freedom and liberty. (Later discussions, including those in Sen's own work, have often used a different language - the language of rights.) One reading of Sen's liberal principle is that freedom of choice is an ingredient of a person's wellbeing or overall good, and that the extent of each person's freedom of choice should be taken into account in any assessment of the social good.
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The idea that freedom of choice is intrinsically good relies on an understanding of freedom as effective freedom (Sen, 1992, p. 41), in contrast both to the negative understanding of freedom as absence of coercion and the positive understanding of it as self-mastery (Berlin, 1969, pp. 118-72). To avoid confusion with these other interpretations of freedom, however, I shall generally use the more neutral term 'opportunity' in place of 'effective freedom'. Friedrich Hayek (1960, pp. 12-13) gives a good example of the difference between opportunity and negative freedom when he asks us to consider the case of a mountain climber who has fallen into a crevasse and is unable to move. The climber's opportunity set is extremely restricted; in the effective sense, his freedom of action is minimal. In the negative sense, however, he remains a free man: he is not being coerced by anyone. It is clear that judgments about negative freedom cannot be represented by any metric of opportunity sets. There can be no question that the climber's opportunity set is small; in order to say that he is nevertheless free, we have to consider why it is so small. This paper is concerned only with the measurement of effective freedom, taking opportunity sets as given. Why might opportunity be thought to have intrinsic value? One answer is to appeal to what Kenneth Arrow (1995, p. 11) calls 'freedom as autonomy' (I shall say opportunity as autonomy). A person's actions are autonomous to the extent that they are chosen by him. But one cannot choose one action unless there are other actions which one might have chosen instead. The richer the set of opportunities from which a person has chosen his way of life, the more that way of life is his. For example, consider two school-leavers: Arthur, who lives in a prosperous city, and Barbara, who lives in a decaying industrial region. Arthur has a wide range of job offers, including some which would provide training for later skilled work; preferring immediate income and leisure, he chooses to be a waiter in a fast-food restaurant. Barbara chooses the same job as the only alternative to unemployment. Arthur's being a waiter is surely the result of a more autonomous choice than is Barbara's being a waiter. Even if the two school-leavers have the same preferences, there is an important difference between their positions: Arthur can look on his occupation as his own choice in a way that Barbara cannot. We might follow Robert Nozick (1974, pp. 48-51) in saying that a person who shapes his life according to his own plan is giving meaning to that life; the more a life is self-chosen, the more meaningful it is. Much of John Stuart Mill's (1859/1972) famous defence of liberty can be read as an appeal to the value of autonomy in the sense that I have sketched out. However, there is a further important theme in Mill's defence of liberty: the idea that through acts of choosing, an individual cultivates the faculties of observation, reason, judgment, discrimination and self-control. If a person's choices are made for him:
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It is possible that he might be guided in some good path, and kept out of harm's way, without any of these good things [i.e., observation, reason, etc.]. But what will be his comparative worth as a human being? It really is of importance, not only what men do, but what manner of men they are that do it. Among the works of man, which human life isrightlyemployed in perfecting and beautifying, the first in importance surely is man himself. (1859, p. 117) The idea here seems to be that the faculties that are developed in acts of choosing have intrinsic value. For short, I shall call this idea opportunity as exercise: choosing is good for the mental faculties in something like the way that physical exercise is good for the body. Both of these accounts of the value of opportunity provide reasons for assigning value to an individual's opportunity set, independently of what is chosen from it. The autonomy approach leads to the idea that an opportunity set has value to the extent that it offers the individual a rich array of options; holding constant the option that is actually chosen, it is better that this option has been chosen from a richer rather than from a poorer array. The exercise approach leads to the idea that opportunity sets have value to the extent that they present the individual with decision problems that exercise morally significant faculties. It should be said that autonomy and exercise are not self-evidently good things. My knowledge that my life is the product of my own choices - that I have turned down many attractive options to get where I am - can be a source of painful regret. Mental exercise, like physical exercise, has costs as well as benefits; excessively demanding tasks can damage the faculties we wish to develop (think of stress-related illnesses). This raises the question of whether we are trying to measure opportunity or to value it. My concern is with measurement; but in order to decide what we want to measure, we need to think about matters of value. The concepts of 'opportunity as autonomy' and 'opportunity as exercise' are interesting because in each case, there are reasons for thinking that opportunity, so understood, is good. But, I claim, we can analyse these concepts of opportunity - we can understand them and we might hope to measure them - irrespective of whether we believe them to be good. Opportunity as autonomy increases as an individual's opportunity set becomes richer, and opportunity as exercise increases as his decision task becomes more demanding. Whether such increases are always a good thing is a different question.
3. OPPORTUNITY AS A DEMAND OF JUSTICE
Welfarism is founded on the idea that what matters is the overall good of society. Consider a typical welfarist proposition: that social state y is better overall than social state x. Suppose that x is the status quo and that
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y is the state that would result if a certain amount of income was taken from one individual, say Joe, and given to another, say Jane. On balance, Jane's gain of welfare is judged to outweigh Joe's loss. But who is supposed to be moved by this information? The most obvious answer, and the one that has traditionally been given by welfarists, is: 'the government'. Notice, however, that in order to conclude that the government ought to transfer income from Joe to Jane, we have to think of it as if it were a benevolent despot - benevolent, because it is seeking to maximize social welfare, and despotic, because it is free to choose which social state should come about. A welfarist can conclude that y is better than x without saying that, if the status quo is x, Jane has a rightful claim on some part of Joe's income. All things considered, it is good to move from x to y, and so a benevolent government would bring about this movement; there is no need to add that Jane has a right to demand that Joe transfers income to her, or that Joe is under an obligation to comply with that demand. In this sense, welfarism does not need a concept of justice. One of the most significant changes in western political culture over the last few decades has been the growing use of the language of rights and justice in place of that of welfare and public interest. When considering enforced transfers of income from one person to another, we no longer find it sufficient to ask whether those transfers would make for a better society; instead, we ask whether justice requires them. To put the same point another way, we look for arguments that can be addressed by those who will receive the transfers to those who will be called on to pay, rather than for arguments that can be addressed to a benevolent government which takes and gives. On what grounds can one person make a claim of justice on resources held by someone else? In particular, can Jane ground a claim against Joe on the grounds she has certain preferences? It seems out of place to demand that, as a matter of justice, other people satisfy one's own preferences. One source of the incongruity is related to the problem in welfarism that I discussed in Section 1. The fact that Jane has, say, a strong preference for chocolate doesn't give us a compelling reason to infer that the consumption of chocolate adds to Jane's well-being. Further, a person's preferences seem too closely related to her choices to ground claims by her against other people. To say that Jane has a strong preference for chocolate is to say that, in an appropriate choice situation, she would be willing to give up a lot in return for it. But in that situation, her giving up a lot would be an act of choice on her part: she wouldn't have to choose in that way. While it is not quite true to say that she has chosen her preference for chocolate, that preference merely reports a hypothetical choice which she would make as a free agent. Why should Jane's free choices impose obligations on Joe?
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Most modern egalitarians see equality as a requirement of justice, and not as a means of maximizing social welfare; but they recognize the incongruity of claiming that justice requires equality of preferencesatisfaction. They seek equality in other domains. Rawls, who has been particularly influential in promoting the language of justice, takes primary goods to be the domain in which equality is to be sought. Primary goods are 'things that every rational man is presumed to want'; they are things that 'normally have a use whatever a person's rational plan of life'. In relation to economic problems, the most relevant of Rawls's primary goods are income and wealth (1971, p. 62). One merit of this approach is that it does not require that different individuals' conceptions of the good are made commensurable. Recall that Rawls rejects the idea of such commensurability (see Section 1). Nor does it invoke any particular theory of well-being. By working in a domain of goods which everyone wants, Rawls hopes to find a standpoint which is neutral with respect to individuals' different conceptions of the good. According to Rawls, a further merit of the primary goods approach is the way that it deals with expensive tastes. He asks us to imagine 'two persons, one satisfied with a diet of milk, bread and beans, while the other is distraught without expensive wines and exotic dishes'. If we seek to equalize preference-satisfaction, we will need to give the second person more income than the first. In contrast, since Rawls's theory of justice is concerned with equality of income, it does not accommodate expensive tastes. Is this an objection to his theory? No, Rawls argues, because it is reasonable 'to hold such persons responsible for their preferences' (1982, pp. 168-9). Expensive tastes do not provide a ground for claims of justice. Sen (e.g., 1992, p. 55) has emphasized the mirror-image of the expensive tastes problem - the problem of entrenched deprivation. When people have suffered long-standing deprivation - particularly when this is part of a pattern of class-based, caste-based or gender-based inequality which has persisted over generations - their desires and aspirations tend to be modest: they learn not to wish for what is unobtainable. But does this fact weaken their claims, on grounds of justice, for the same opportunities as others enjoy? Sen argues that it does not. Several later writers have followed Rawls's line on expensive tastes. In different ways, Ronald Dworkin (1981a, 1981b) and Philippe Van Parijs (1995) have argued for equality of resources as a more appropriate criterion of justice than equality of welfare. Sen (1992) proposes that the space in which equality should be sought is that of capabilities. A person's 'capability' is the set of opportunities that are open to her. For Sen, the elements of this set are combinations of functionings. Roughly speaking,
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functionings are intermediate between resources and welfare. For example, electricity is a resource, but T>eing warm' is a functioning. If an old person requires more heat than a young person to be warm, Sen wants to allow the old person to have a greater claim on resources. G. A. Cohen (1989) argues for equality of access to advantage, a concept which seems similar to capability. Within this school of egalitarian writers, there is some disagreement as to why expensive tastes do not give rise to claims of justice. On one view, the crucial issue is the extent to which, over a lifetime, a person's tastes are under his own control. No one is entitled to claim compensation for disadvantages that are the foreseeable consequences of his own decisions; thus in the calculus of justice, tastes that have been cultivated do not count (Richard Arneson, 1989; Cohen, 1989). On another view, preference-satisfaction is simply not the relevant domain for a theory of justice. But the proposals of Rawls, Dworkin, Van Parijs, Sen and Cohen all share the common feature that justice is seen as requiring equality in some domain of opportunity sets. Which opportunities, from those that are open to her, the individual then chooses to take up is her responsibility, and is outside the scope of justice. This leaves us with a problem: how are we to measure opportunity sets? That this is a problem for Sen's theory of capabilities is well known. Functionings are multi-dimensional, and there is no obvious metric for comparing sets of functionings - except in the special case where one opportunity set is a subset of another. But in the case of resource-based theories, such as those of Rawls, Dworkin and Van Parijs, it is tempting to think that the problem of measuring opportunity sets can be sidestepped: all we have to do is to equalize the value of individuals' endowments of resources, valued at competitive market prices. Provided that all resources are tradable in competitive markets, and provided that their total quantities are fixed, this solution gives each person exactly the same opportunities as he would have had if every resource had been divided equally between all individuals. Given that we are starting from the premise that equality is to be sought in the domain of resources, such a solution is hard to fault. The difficulty is that total quantities of resources are not fixed. For example, consider Rawls's theory of justice, which seeks equality in primary goods. Comparisons between alternative social structures are made by using the lexical maximin criterion: the aim is to make the position of the worst-off group of people as favourable as possible, positions being assessed in terms of primary goods. Suppose we wish to compare two alternative economic regimes for a given society, concentrating on one particular primary good: income. Within each regime (let us suppose), there is an array of market prices, faced by all individuals. Thus, when we make comparisons across individuals within a regime,
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market value can be used as a metric of income. If two people have different incomes, the person with the higher income can buy any bundle of goods that the other can buy, and more besides. So there is an unambiguous sense in which the greater is a person's income, the larger is his opportunity set; and so we can identify the worst-off group of people within any one regime. But when we try to make comparisons across regimes, this metric fails us, because prices will be different in different regimes. The resulting problems are discussed by Allan Gibbard (1979) and Arneson (1990). Of course, economics has an array of techniques for coping with the index number problem: there are practical, if imperfect, ways of measuring changes in income when prices are not constant. However, as Brian Barry (1995) points out, the usual rationale for these measures is welfarist. Economists have looked for measures of an individual's real income which move in the same direction as utility when prices change, given the assumption that the individual makes choices so as to maximize utility. It may turn out that such measures are also suitable for non-welfarist theories of justice; but we cannot simply assume that they are. The problem, then, is to find a measure of opportunity that is appropriate for use in theories of justice. As a shorthand, I shall use the term primary-good opportunity for this conception of opportunity. The essential idea is that a set of options gives more primary-good opportunity, the greater the extent to which that set tends to assist a representative individual to achieve his own ends, whatever those ends might be. Notice that we do not have to claim that primary-good opportunity corresponds with individual well-being in order to recognize the former as a coherent concept and to try to measure it. Thus, the question of how opportunity should be measured is distinct from the question of how valuable it is.
4. MEASURING OPPORTUNITY WITHOUT USING PREFERENCES
Can opportunity be treated as a physical quantity, to be measured without referring to preferences or values? Ian Carter (1995a, 1995b) argues that it can: we should think of the size of a person's opportunity set (Carter calls this 'overall freedom') as 'a unidimensional function of the sheer "quantity of action" available to her' (1995a, p. 21). Notice that Carter's idea of 'sheer quantity' goes much further than the separation of measurement and value for which I have been arguing. On my account of measurement, information about preferences might be used in measuring the amount of opportunity offered by a set of options; there is still a separation between measurement and value because there is no presumption that more opportunity is better than less. In this section, I
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consider some measures of opportunity that do not use preference information at all. One measure of sheer quantity of opportunity is the cardinality criterion. This criterion, which applies only to finite opportunity sets, ranks sets according to the number of options they contain. Prasanta Pattanaik and Yongsheng Xu (1990) show how this criterion can be derived from a set of simple axioms, but they do not endorse it as a good measure of opportunity. On the contrary, they now interpret their result as an impossibility theorem which shows that a sheer quantity approach will not work (Pattanaik and Xu, 1995). Here I must introduce some notation, which I shall use throughout this paper. Let the finite set X represent the universal set of conceivable options; options will be denoted by w, x, y, z. Every non-empty subset of X is interpreted as a possible opportunity set; such sets will be denoted by A, B, C, D. Let y be the binary relation 'gives at least as much opportunity as', denned on the set of opportunity sets. The relations y, i.e., 'gives more opportunity than', and ~, i.e., 'gives exactly as much opportunity as', are defined from >; in the usual way. Throughout the paper, I shall assume that y is transitive; in general, I shall not assume this relation to be complete. Now consider the following restrictions which might be imposed on
y-.
PI. Strict Monotonicity. For all opportunity sets A, B: if B is a strict subset of A, then A y B. P2. Independence. For all opportunity sets A, B, and for all options x such that x A, B: A >: B < = > A U {x| y B U {x}. P3. No Choice. For all options x, y: (x) ~ {y}. The conjunction of these three axioms is equivalent to the cardinality criterion: this is essentially the result proved by Pattanaik and Xu. To see the intuition behind the proof, consider any distinct options w, x, y, z. By P3, all one-member sets are ranked equally, so {x} ~ {y}. By P2, the equal ranking of those sets is preserved if w is added to both: thus {w, x( ~ {w, y). By a similar argument, {w, y} ~ {y, z}. Then by transitivity, we have {w, x} ~ {y, z}. Thus, all two-member sets must be ranked equally. Further, since {x, y) >- {x} by PI, two-member sets must be ranked above one-member sets. Extending this argument, it can be shown that all three-member sets are ranked equally, but above two-member sets; and soon. The cardinality criterion takes.no account of the descriptions of the options in an opportunity set: it merely counts options. This has unpalatable implications. Consider the following two opportunity sets.
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In the case of opportunity set A, a passenger on a plane is offered a choice between three complimentary drinks: a can of Heineken beer, a can of mineral water, or a small bottle of wine. In the case of opportunity set B, she is offered a choice between four drinks; these are four different cans of Heineken beer, distinguishable from one another only by their having different batch numbers printed on them. According to the cardinality criterion, B is larger than A: we might say that the sheer quantity of action is greater in B. But in terms of any of the interpretations of opportunity that I have considered, it would be perverse to claim that B offers more opportunity than A. If we think of opportunity as autonomy, A seems to offer a richer array of options than B. If we think of opportunity as exercise, A seems to present a more challenging decision problem. And if we think of primary-good autonomy, A seems to have a greater tendency to assist a representative individual in the pursuit of his ends. Whichever of these interpretations of opportunity we favour, the cardinality criterion has the same crucial limitation: it does not take account of the diversity of options in an opportunity set. We
recognize A as offering more opportunity than B because A's options,
although fewer in number than B's, are more diverse. This limitation of the cardinality criterion is a product of the Independence axiom. The abstract appeal of that axiom seems to depend on an intuition that opportunities are additive - that the amount of opportunity offered by the union of two disjoint sets is the sum of the amounts of opportunity offered by those sets separately. But if opportunity is related to diversity, it cannot be additive. Consider another example. Each of a number of room heaters is fitted with a thermostatic control, which has a finite number of settings. For each heater, the set of those temperature settings (in degrees Celsius) can be interpreted as an opportunity set. Consider the opportunity sets A = {15}, B = {19} and the option x = 15.01. Independence implies that if A and B give equal amounts of opportunity, then {15,15.01} gives just as much opportunity as {15.01, 19}. But it seems clear that the 15.01 option adds more to the diversity of B than it does to that of A: we should not expect the ranking of those two sets to be unaffected when this option is added to each of them. Although the cardinality criterion itself has found few supporters, the Independence axiom and related principles are often used in characterizing measures of opportunity. That axiom was first used (in a marginally different form) by Patrick Suppes (1987) as part of a characterization of a measure of opportunity. Suppes's axioms imply the existence of a function v(.) which assigns a positive number to every conceivable option; for any option x we may interpret v(x) as its 'opportunity value'. Then, according to Suppes's measure, the amount of opportunity offered by a set is simply the sum of the opportunity values
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of its component options. (Notice that the cardinality criterion is the special case of Suppes's measure in which all options have the same opportunity value.) Nicolas Gravel, Jean-Francois Laslier and Alain Trannoy (1998) arrive at Suppes's measure by a different route, using an axiom ('Independence of Unanimous Gains from Redistribution') which turns out to be a close relative of Independence. If we are to find a measure of opportunity which takes account of diversity, it is clear that we need to consider the particular characteristics of options; and we need to consider options in relation to one another (rather than separately, as Independence forces us to do). One possibility might be to look for a measure of opportunity which is sensitive to the physical characteristics of options, but which does not make use of any information about preferences. This seems to be what Carter (1992, p. 46) has in mind when he suggests that 'the greater the difference between the spatio-temporal coordinates of a particular event, the greater the "quantity of action" performed by an agent when he brings it about'. Unfortunately, he does not develop this suggestion, merely expressing a hope that there might be approximate intersubjective agreement on a ratio scale for actions. I remain sceptical. A more concrete proposal of a similar kind is made by Marlies Klemisch-Ahlert (1993). This proposal starts from the very general idea that options can be represented by points in an n-dimensional space of real numbers; the dimensions may be interpreted as quantities of different commodities, primary goods, or functionings, depending on the conception of opportunity being used. Klemisch-Ahlert argues that certain 'shape-preserving' transformations of opportunity sets can be regarded as preserving the quantity of opportunity being offered. The simplest of these transformations is a 'shift': every option in a set is transformed by adding to it (or subtracting from it) the same vector. As an example of the unattractive implications of this principle, consider the following case. Options are to be interpreted as possible prizes in a competition held in London; they are different bundles of airline tickets. An opportunity set is to be interpreted as a choice among alternative prizes. Prize w is a one-way ticket to Paris; x is a return ticket to Amsterdam; y is a return ticket to Paris; z is a return ticket to Amsterdam plus a one-way ticket from Paris. According to KlemischAhlert's principle, (w, x} and |y, z} offer equal amounts of opportunity, because the latter set is simply the former set, 'shifted' by adding a oneway ticket from Paris to both options. But once we recognize that one half of a return ticket is little use without the other half, it seems natural to say that {w, x}, which effectively offers only a trip to Amsterdam, gives less opportunity than {y, z}, which offers the choice between Amsterdam and Paris. Again, inadequate account is being taken of the nature of the options.
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The difficulty for a 'sheer quantity' approach is to find a way of representing concepts such as diversity and complementarity without using any notion of preference or value. So far, no one has come near to solving this problem.
5. MEASURES BASED O N ACTUAL PREFERENCES
Several theorists have argued that a measure of opportunity ought to be defined in relation to a given individual, and should take some account of that individual's preferences over options. In particular, Pattanaik and Xu's principle of No Choice has been challenged. Consider two distinct opportunity sets, each of which is a singleton, say {x} and (y). Suppose that x is having a certain dental operation without pain and that y is having the same operation, but with severe pain. And consider a person who (as one would expect) prefers x to y. Do {x| and {y} offer the same amount of opportunity, as the principle of No Choice implies? Pattanaik and Xu (1990, 1995) argue that the two sets should be ranked equally, on the grounds that what is being measured is freedom of choice and that a singleton set offers no choice at all. All things considered, it may be better to have {x} than {y|; but both sets rank equally in terms of freedom of choice. Against this position, Sen (1991) argues that in this kind of case, {x} should be ranked above |y) because 'being forced to [do] what you would have [done] anyway is less restrictive of freedom than being forced to [do] what you wouldn't have [done] anyway'. Each of these arguments seems to have some force, but they contradict one another. The explanation of this contradiction, I suggest, is that the two arguments appeal to different conceptions of opportunity. If we think of opportunity as exercise, it is hard to deny the principle of No Choice: if there is no choice to be made at all, then there is nothing to exercise the decision-making faculties. The desirability of the options in an opportunity set and the difficulty of the decision problem it presents are two completely different things. However, if we think of opportunity as autonomy or of primarygood opportunity, then the desirability of options does seem to matter. I have argued that opportunity as autonomy increases as an individual's opportunity set becomes richer, and that primary-good opportunity is greater, the greater the degree to which the opportunity set tends to assist a representative individual to achieve his own ends. At least in a case in which (as in the example) almost anyone would prefer x to y, it seems clear that {x} is a richer set than {y}, and does more to assist a representative individual to achieve his ends. Sen (1991) argues that 'any plausible axiomatic structure in the comparison of the extent of freedom would have to take some note of the
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person's preferences' (p. 22). Thus, he proposes that the ranking of opportunity sets should depend on the preferences of the relevant individual. It might seem that the obvious way to connect these two relations is to make the ranking of any two opportunity sets the same as the preference ranking of their most-preferred options. This is the indirect utility ranking. (The indirect utility of a set is the utility of its mostpreferred element.) This is a welfarist measure of the ability of opportunity sets to satisfy the individual's preferences. Sen, however, is not a welfarist; he wants to allow options to contribute to the extent of freedom even if they would not be chosen. Thus, he tries to find a measure of opportunity which takes account both of preference-satisfaction and of the number of options. (Some other versions of this approach are presented by Walter Bossert, Pattanaik and Xu (1994)). Here I need to expand the notation. From now on, I shall use P, R and I to denote the relations of strict preference, weak preference and indifference on the set of options. Throughout, I shall assume that preferences are complete (that is, for all x, y in X: xRy or yRx) and transitive. In this section, I shall consider methods for ranking opportunity sets (that is, methods for deriving the relation >;) which use as data the actual preference ordering R of the relevant person. In place of the No Choice principle, Sen proposes the following principle: P4. Extension. For all options x, y: (x) h {y| < = > x R y. This makes the relation >; an 'extension' of the preference relation R. In this way, Sen requires that his measure of freedom takes some account of preference-satisfaction. The idea that non-chosen options can contribute to the extent of freedom is contained in Sen's principle of weak preference dominance, which is equivalent to the conjunction of the following two principles (Nehring and Puppe, 1996): P5. Weak Monotonicity. For all opportunity sets A, B: if B is a strict subset of A, then A h B. P6. Preference-based Independence. For all opportunity sets A, and for all options x, y A: if x R y, then A U (x( t. A U |y(. Weak Monotonicity says that the addition of options to an opportunity set cannot reduce the extent of freedom. Preference-based Independence seems to depend on two intuitions: that opportunity is additive, and that the 'opportunity value' of an option depends on its position in the preference ordering. Thus, the more preferred an option is, the more it contributes to the extent of freedom.
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The principle of Preference-based Independence has the same flaw as the simpler Independence principle P2: it prevents us from taking account of diversity. Consider the example of room heaters, under the assumption that the relevant individual is indifferent between the two options 15 and 19. Then, by Preference-based Independence, we have {15,15.01} ~ {15.01,19}. If there is an argument for ranking these two sets equally, as Sen asks us to do, it would seem to be something like the following. Each set has the same number of options, and thus offers the same 'sheer quantity' of choice. Further, since the options in the two sets are either identical (15.01 appears in both sets) or equally preferred (the individual is indifferent between 15 and 19), these sets are equivalent to one another in terms of the individual's preferences. Thus (it could be said) the two sets give equal amounts of opportunity. Clearly, what is wrong with this argument is that it fails to compare the extent of diversity in the two sets. The lesson to be learned, I suggest, is that we cannot measure diversity merely by using information about how options are ranked in the individual's preference ordering.
Klaus Nehring and Clemens Puppe (1996) point out a further
problem for Sen's approach. Suppose that the set of conceivable options is not finite, and that options can be located in some continuous space of physical characteristics. Then it seems natural to require that small changes in the physical descriptions of opportunity sets are not associated with discontinuous shifts in the ranking of those sets. But if we add this kind of continuity requirement to Sen's principles, we end up with the indirect utility criterion: the ranking of opportunity sets can take no account of options that would not be chosen, or of the number of options available. To see how this result comes about, consider again the example of room heaters. Suppose the individual weakly prefers 16 to 18. Now consider the opportunity sets B = (16,16 + e} and C = {16 + e, 18} where e is any small non-negative number. If e is greater than zero (and less than 2), Preference-based Independence implies B y C. But if e is exactly equal to zero, we have B = {16} and C = {16, 18} and so, by Weak Monotonicity, C y B. If there is not to be a discontinuity in y at e = 0, we must have B ~ C at that point. Thus, given Sen's conditions and a continuity requirement, we can show that a two-option set (i.e., {16,18}) is ranked equally with the singleton set (i.e., {16}) which contains the more preferred of those two options. Nehring and Puppe's result is a generalization of this conclusion.
6. THE SIGNIFICANCE OF POTENTIAL PREFERENCES
It is a mistake, I suggest, to try to base a measure of opportunity on an individual's actual preferences. To make sense of the concept of
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opportunity, we need to consider potential preferences - the range of preferences that the individual might have had in the relevant circumstances. This general approach to the measurement of opportunity has been advocated by Peter Jones and me Jones and Sugden, 1982), James Foster (1993), Pattanaik and Xu (1995), Kenneth Arrow (1995), and (in his most recent work) Puppe (1998). Going back to the complimentary drinks example, I take it that a choice between beer, mineral water and wine (opportunity set A) offers more opportunity than a choice between four barely distinguishable cans of beer (opportunity set B) - even for a person who actually chooses beer. Why is this? If the answer is that A offers more diversity, what does that mean? I suggest that A offers more diversity because a passenger in the circumstances of the example might have had a moderately strong preference for any of the three different drinks over the others, while it is hard to imagine her being other than indifferent between the four cans of beer. The position for which I am arguing is to be distinguished from the argument thatflexibility- that is, the current prospect of a wide range of opportunities in the future - has instrumental value to a utilitymaximizing individual who is uncertain of her future preferences (Koopmans, 1964; Kreps, 1979). Proponents of measures of opportunity based on actual preference have rejected the flexibility approach as inappropriate for cases in which preferences are known (Sen, 1991; Sen, 1992, p. 51; Puppe, 1995, p. 141). But my argument is not instrumental in this sense. My claim is that counter/actual preferences are relevant for the measurement of opportunity. Why are counterfactual preferences relevant? The answer to this question depends on what we are trying to achieve by measuring opportunity. One reason for looking for such a measure is that opportunity is seen as contributing to an individual's overall good, either because autonomy is held to have intrinsic value or because the act of choosing tends to cultivate valuable human faculties. On either view, we have to conceive of choice as an autonomous act. That is, we must work within a framework which leaves open what, from the set of options open to her, an individual actually chooses. If preferences are interpreted as dispositions to make specific choices, we cannot also treat them as given data: they must be understood as the product of a process of deliberation in which the agent decides what to choose. Thus, if we wish to measure 'opportunity as autonomy' or 'opportunity as exercise', we must consider the whole range of potential preferences which a person might have held, and not merely the ones on which she finally acts. Alternatively, we might be trying to achieve a satisfactory theory of justice. Recall that one of the main reasons for defining justice in terms of
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opportunity rather than welfare is to ensure that an individual's claims of justice are not dependent on her preferences. The whole point of using opportunity in place of welfare would be defeated if each individual's opportunities were measured in terms of her own preferences. Thus, if preference is to be at all relevant to justice, we need to find some conception of preference that applies across individuals and that is independent of each individual's actual preferences. Potential preference is one such conception. Compare Rawls's concept of primary goods. Primary goods are things that normally have a use whatever a person's rational plan of life; in the language of preferences, we might say that they are things that normally have value whatever a person's preferences. In other words, the more primary goods a person has, the better able he is to satisfy his preferences, whatever those preferences may happen to be. Rawls's veil of ignorance provides one way of making sense of potential preferences. The veil of ignorance prevents the contracting parties from using knowledge about the actual preferences they have as individuals: all
they are allowed to use is knowledge about the psychology and
sociology of preferences in general. Notice that Rawls is not assuming that people really are uncertain about their preferences. His claim is that, when thinking about justice, they should reason as if they did not know their preferences. We might think of the contracting parties' general psychological and sociological knowledge as delimiting a set of potential preferences. Using only this knowledge, Rawls thinks, each contracting party can recognize that primary goods are valuable to her. It is a natural extension of this idea to argue that a measure of primary-good opportunity should be based on potential preferences. If we take any of these approaches, we must be able to identify potential preferences. Although the idea of measuring opportunity in terms of potential preferences has been discussed by a number of writers, little has been said about how such preferences should be interpreted. There seems to be no way of avoiding appeal to contestable ideas of 'normal', 'reasonable' or 'natural' preferences. For example, I take size 42 shoes. Is my range of opportunity increased if a given style of shoe is available in size 38 as well as size 42? I think not. Given the size of my foot, a preference for size 38 shoes seems too perverse to be taken seriously as a potential preference. But I can remember a time when, among men, a preference for wearing an earring would have seemed just as perverse. Or take the case of the complimentary drinks. I have claimed that the passenger's set of potential preferences does not include strong preferences between different batch numbers on beer cans. But we know that wine connoisseurs set great store by differences between wines that other people would regard as hardly less trivial.
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The idea that we can measure opportunity by taking account of potential preferences rests uneasily between two opposing positions. One position is the claim that a person's preferences are fully determined by psychological and social influences, and that no counterfactual preferences can properly be regarded as 'potential'. If we accept this position, a metric based on potential preference collapses to indirect utility. The opposite position is that all conceivable preferences are within the range of possibility for an autonomous agent, and that all should count as 'potential'. If we accept this position, the idea of potential preference becomes empty, and we are back to the problem of trying to measure opportunity as some kind of pure quantity. There is no hiding the seriousness of these difficulties. I can see two alternative ways of getting round them. One is to appeal to an objective but pluralistic account of the good. This seems to be Sen's strategy. He says that the philosophical basis of his approach is Aristotelian, and that in a capability-based assessment of justice, individual claims are to be assessed Tjy the freedoms [persons] actually enjoy to choose lives that they have reason to value' (1992, pp. 39, 81). The idea seems to be that an opportunity set is valuable to the extent that it contains options that might, with good reason, be chosen; for a given person, there may be more than one reasonable choice. Translating into the language of this paper, we might say that for a given individual there can be a range of different rankings of options, each of which corresponds with a different but equally valid conception of her good. The set of potential preferences might then be identified with this set of valid rankings in terms of goodness. For example, it might be said that relaxation and achievement are both goods for human beings, but that these two goods can reasonably be weighted in many different ways. A person whose opportunity set includes a beach holiday and a rock-climbing holiday can then be said to have a potential preference for each holiday over the other - irrespective of her actual preferences. But if wearing shoes which are too small for one's feet does not contribute to any dimension of human good, then the corresponding counterfactual preferences do not count as 'potential'. Those who are sceptical about the existence of objective goodness even of this pluralist kind - may be more inclined to take the second route round these difficulties. This is to use a sociological interpretation of potential preference. Consider some reference class of individuals, defined by characteristics other than their current preferences - for example, the class of middle-aged British men. Each individual in this class has his own actual preferences. We might define the set of potential preferences for each member of a reference class as comprising the actual preferences of all members. The idea here is that if someone who is sufficiently like me in terms of non-preference characteristics has a
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particular preference ordering, then that preference ordering is to be regarded as one that I might have had. This second approach is perhaps most defensible if we are looking for a measure of opportunity that can be used in a theory of justice, and if we think of such a theory in contractarian terms. Rawls (1971, p. 95) describes his own strategy of focusing on primary goods as a 'simplifying device', and as representing an agreement on 'the most feasible way to establish a publicly recognized objective measure of people's situations'. Thus, Rawls does not claim that his index of primary goods is the true measure of a person's opportunity to achieve well-being. Rather, he claims that each member of society will be able to agree that this measure should be used within a public conception of justice. Rawls seems to be arguing that the primary-goods metric will command attention as a potential point of agreement for individuals who recognize the need for a public standard of justice, but who lack a common conception of the good. In the same spirit, we might ask what interpretation of 'potential preference' could be agreed on by individuals who recognized the need for a public measure of primary-good opportunity. An interpretation which is to function in this way must be straightforward; it must be operational; and it must be neutral as between different conceptions of the good. A sociological approach, in which a person's potential preferences are defined by reference to the actual preferences of those who are like him in non-preference respects, might meet those requirements. I hope I have persuaded the reader that, if we are to arrive at a satisfactory measure of opportunity, we need some concept of potential preference. I recognize that I have provided no more than two rough sketches of how such preferences might be interpreted. Much more work needs to be done here. Nevertheless, these sketches may be enough to allow us to make some progress in thinking about the relationship between potential preferences and opportunity.
7. RANGE OF OPPORTUNITY VERSUS SCOPE FOR SIGNIFICANT CHOOSING
To take account of potential preferences, a further element of notation is needed. Let R; be a typical relation of potential weak preference, with P; and Ii denoting the corresponding relations of strict preference and indifference. Each relation Rj is taken to be complete and transitive on X. Recall that I have assumed X to be finite; thus, the set of logically possible preference relations is finite too. The set of all potential preferences is Q: = {Ri, ..., Rn}. Q does not necessarily contain every logically possible ordering of X; it includes only those orderings that are identified as 'potential' by whatever criterion we are using. For a given
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Q, the problem is to rank opportunity sets in terms of the transitive relation y ('gives at least as much opportunity as'). I shall now look at some restrictions that might be imposed on that relation. Jones and I have considered the following two principles (Jones and Sugden, 1982): P7. Addition of Eligible Options. For all opportunity sets S, and for all options x S: if there exists some R; G Q such that x Pj y for all y e S, then S u | x ) ) - S. P8. Addition of Ineligible Options. For all opportunity sets S, and for all options x S: if there does not exist any R, e Q such that x Pj y for all y S, then S U |x) ~ S. An option is eligible in relation to a set S if, according to at least one potential preference relation, that option is strictly preferred to every element of S. P7 requires that whenever an eligible option is added to an opportunity set, the expanded set offers more opportunity than does the original set. Notice that, whichever of the potential preference relations is actual, the addition of an option (whether eligible or not) cannot make the chooser worse off. Further, if the additional option is eligible, there is at least one potential preference relation such that the expansion of the opportunity set allows the chooser to become better off. Thus it seems natural to say that the addition of an eligible option expands the range of opportunity. P8 requires that whenever an ineligible option is added to an opportunity set, the expanded set offers exactly as much opportunity as does the original set. The idea here is that, whichever of the set of potential preference relations is actual, the addition of an ineligible option does not allow the individual to become any better off than she could be in its absence. In this sense, the addition of an ineligible option adds nothing to the range of opportunity offered by a set. Notice the following implication of P8. Consider any options x, y such that xljy is true for all potential preferences R;. (Think of the cans of beer that are identical except for their batch numbers.) Then if an opportunity set contains one of these two options, the amount of opportunity it offers is unaffected if the other option is added to or subtracted from the set. Thus, for example, for any third option z we have {x, z} ~ {x, y, z} ~ {y, z}. As far as opportunity is concerned, then, it is just as if x and y were not distinct options at all. Indeed, in the spirit of Broome's (1991, pp, 104-7) discussion of 'rational requirements of indifference', we might stipulate that options should not be individuated beyond the point at which there exists a potential strict preference. (In the case of the beer cans, we might define a single option, 'a can of beer', which refers to any one of x and y.)
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ROBERT SUCDEN
Jones and I show that the conjunction of these two principles is inconsistent with the principle of No Choice (P3, defined in Section 4). To see how this inconsistency arises, consider the case of two options x, y, such that all potential preferences rank x above y (think of the dental operations discussed in Section 5). In this case, x is eligible in relation to {y} while y is ineligible in relation to {x}. Thus the principle of Addition of Eligible Options implies {x, y} >- |y), while the principle of Addition of Ineligible Options implies {x, y( ~ {x}. Transitivity then implies {x} >- [y], contrary to the principle of No Choice. This simple impossibility result highlights an inconsistency between two different ways of thinking about the value of opportunity, corresponding with the two sides of the debate over the principle of No Choice, discussed in Section 5. If we think of opportunity as autonomy, or of primary-good opportunity, we will compare sets by asking which offers the wider range of opportunity. Thus, we should reject the principle of No Choice, while accepting the other two principles. In the case in which all potential preferences rank x above y, we should conclude that |x) offers a wider range of opportunity than (y). In contrast, if one thinks of opportunity as exercise, one will try to measure the scope for significant choosing that is generated by an opportunity set. Then the principle of No Choice should be accepted: a singleton opportunity set provides no scope at all for any kind of choosing. Arguably, the principle of Addition of Ineligible Options is also acceptable. An ineligible option, we might say, is one that the chooser need not deliberate about, since whatever his preferences, there is never a reason to choose it (and it alone). Thus, the addition of an ineligible option does not make the decision problem any more or less challenging. However, the principle of Addition of Eligible Options should certainly be rejected. For example, if all potential preferences rank x above y, then the choice problem {x, y} is just as trivial as the problem (x}: whatever the chooser's preferences, there is only one option in {x, y} that could possibly be worth choosing. This point can be made more starkly by considering a case in which the addition of an eligible option reduces the scope for significant choice. Suppose there are three options v, w, x, such that all potential preferences rank x above both v and w, but some potential preferences rank v above w while others rank w above v. For example, suppose that x is having a dental operation without either pain or later side-effects, v is having the same operation with pain but no side-effects, and w is having the operation with no pain but with an anaesthetic that has unpleasant sideeffects. The development of new anaesthetics expands the opportunity set from {v, w} to {v, w, x). It seems clear that the larger set offers a wider range of opportunity: it caters more effectively to the range of potential preferences. But does it offer more scope for significant choosing? I
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suggest that it offers less. The smaller set requires the chooser to make a significant decision about his life, while the decision problem presented by the larger set is trivial. No doubt the former decision is one we would all prefer not to have to make, but why should we expect the development of valuable faculties to be pleasurable? This analysis shows once again that we cannot sensibly discuss the formal properties of a metric of opportunity without first specifying the interpretation of opportunity we are using. In the final part of this paper, I will restrict my attention to opportunity as autonomy and to primarygood opportunity - that is, to 'range of opportunity' interpretations. This is not to say that measures of opportunity as exercise are not interesting - they are. But, as yet, I do not have any concrete proposals to offer about such measures.
8. THE UNANIMITY PRINCIPLE AND ARROW'S MEASURE OF OPPORTUNITY
I have argued that a set of options offers a wide range of opportunity to the extent that it caters to the range of potential preferences that a person might have had. Thus, a measure of primary-good opportunity, or of opportunity as autonomy, should satisfy the principles of Addition of Eligible Options and Addition of Ineligible Options. Taken together, these principles imply that the ranking of opportunity sets has a certain simple property. For each opportunity set A, let g,(A) be some option in A that is at least as preferred as every other option in A in terms of the potential preference relation R,. Then the property is: P9. Unanimity. For all opportunity sets A, B: if g;(A) Rj gi(B) is true for all potential preference orderings Rir then A y B; if in addition, gj(A) Pj gj(B) for some potential preference ordering Rj, then A y B. In other words: if all potential preference orderings yield the implication that the best option in A is at least as good as the best option in B, then A gives at least as much opportunity as B; if, in addition, at least one potential preference ordering yields the implication that the best option in A is strictly better than the best option in B, then A gives more opportunity than B. Given the background assumption that y is transitive, Unanimity is equivalent to the conjunction of P7 (Addition of Eligible Options) and P8 (Addition of Ineligible Options). It is immediately obvious that Unanimity implies P7 and P8. To see that P7 and P8 together imply Unanimity, first consider any distinct opportunity sets A, B such that gi(A) I; g;(B) for all potential preference orderings R;. It follows from repeated applications of P8 that A U B ~ A and A U B ~ B. Transitivity then implies
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A ~ B. Now consider any opportunity sets A, B such that g;(A) R; gi(B) for all i, with a strict preference for A in the case of at least one i. It follows from repeated applications of P7 and P8 that A U B >- B, and from repeated applications of P8 that A U B ~ A. Transitivity then implies A >- B. Unanimity is a common feature of several proposed measures of opportunity. The principles P7 and P8, which are equivalent to Unanimity, are proposed by Jones and myself as natural properties of any measure of range of opportunity (Jones and Sugden, 1982). Foster (1993) proposes a partial ordering of opportunity sets which uses Unanimity as the only criterion: whenever potential preferences generate conflicting rankings of opportunity sets, those sets are treated as noncomparable in terms of the range of opportunity (or effective freedom) that they offer. Sen (1992, pp. 46-9 and 82-4) proposes an approach that is somewhat similar to Foster's when he suggests that capability sets might be partially ordered by using the intersection of the rankings of those sets that are implied by different 'comprehensive doctrines' or conceptions of the good. More ambitiously, Arrow (1995) proposes a method, incorporating Unanimity, for ranking all opportunity sets. Arrow's proposal is worth looking at closely. It is based on the concept of flexibility. Consider an individual who has to choose between alternative opportunity sets while uncertain about her own future preferences. After this uncertainty is resolved, she will be free to choose one option from whichever opportunity set she previously selected. How will she rank opportunity sets before the uncertainty is resolved? Notice that this is not a straightforward problem of choice under uncertainty. In conventional expected utility theory, a person's preferences are fixed, and utility is defined from those preferences. Thus, utility comparisons are to be understood as preferences. In the present problem, in contrast, there is uncertainty about the preferences themselves, and on the face of it, we have no way of making utility comparisons across alternative preferences. In some of the literature on flexibility, this difficulty is overcome by redescribing the uncertainty about preferences as if it were uncertainty about states of nature. For example, consider someone who has to choose today between alternative menus for a meal that she will eat tomorrow. She is not sure whether tomorrow she will prefer steak or salad. Now suppose that the underlying reason for this uncertainty is that on cold days she prefers to eat steak but on hot days she prefers salad, and she is uncertain about tomorrow's weather. Given this assumption, her attitudes today can be described by a single system of preferences over acts (that is, combinations of state-contingent consequences), the relevant states of nature being 'hot weather' and 'cold weather'. If these preferences satisfy the appropriate axioms (and if the probabilities of the
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two states of nature are known), they can be represented by two statecontingent utility functions, one for each state of the weather, such that acts with greater expected utility are preferred. In this way, the problem of choosing between menus can be reduced to a straightforward problem of choice under uncertainty, which can be analysed using expected utility theory. Mathematically, this expected utility problem can be represented in the following way. For each possible preference ordering R; over options, we can define a function u;(.) which assigns a utility index to every option x. Strictly speaking, each such Uj(x) is an index of state-contingent utility, evaluated ex ante, and contingent on the state of nature which corresponds with Rj. The origin of each of these state-contingent utility functions is arbitrary; the scale is arbitrary too, but is common to all the functions. (That is, by knowing the person's preferences over acts, we can compare utility differences across states, but we cannot compare utility levels across states.) Let the probability of the state of nature which corresponds with Rj be TI-J. For every opportunity set A, let ^i(A) represent the indirect utility of that set when the utility function is U;(.). Then the expected indirect utility of A, evaluated before it is known which state of nature will occur, is V(A) where:
V(A) = 2>,-*,(A).
(1)
V(A) is a measure of opportunity as flexibility, which clearly satisfies Unanimity. Arrow presents a conventional expected utility analysis of flexibility, along the lines I have just sketched out. He then says simply: 'I propose to use the concept of flexibility with respect to a probability distribution over preferences as the definition of freedom' (p. 11). In other words, he proposes (1) as a measure of opportunity as autonomy (recall that Arrow interprets freedom in terms of autonomy). However, the transition from flexibility to autonomy is not as straightforward as Arrow seems to suggest. Suppose we interpret the relations Rit .., Rn as potential preferences, in the sense discussed in Section 6. Then it is not clear how we should interpret the probability distribution 7rl7.., 7rn over those potential preferences. Nor is it clear how we should interpret the indirect utility indices in (1). For example, suppose I invariably prefer tea to Coke. We might still want to say that the set {tea, Coke} offers more opportunity to me than the set {tea}, because, counterfactually, I might have had a preference for Coke over tea. But there seems to be no obvious ex ante viewpoint from which each of these potential preference rankings can be identified with a different state of nature, and from which I can be said to have a single set of preferences over state-contingent consequences.
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Or, returning to the example of steak and salad, suppose the person concerned is uncertain, not about the state of the weather, but about whether, when the time comes to eat the meal, she will be a committed vegetarian. Now we may wonder if it makes sense to think of her as having a single system of preferences ranging over two different moral positions. The difficulty here is an intrapersonal analogue of the problem of making sense of interpersonal comparisons in welfarism, or behind a veil of ignorance: we cannot find a neutral position from which to make comparisons across different preference orderings (see Section 1). So have we come full circle? The recognition of this problem in welfarism has been one of the main reasons for trying to develop a measure of primary-good opportunity; in looking for a suitable measure, we have been led to take account of potential preferences; but whert we try to aggregate potential preferences, we confront the same difficulties as welfarism does when it tries to aggregate actual preferences. One way of escaping this problem is to eschew inter-preference comparisons altogether, as Foster does: we might say that opportunity sets are non-comparable except where they can be ranked by the principle of Unanimity. If we are seeking to measure primary-good opportunity, this approach is compatible with a strict interpretation of Rawls's definition of primary goods as goods that normally have a use whatever a person's rational plan of life. If we take the set of potential preference orderings as our analogue of Rawls's set of possible plans of life, and if we want to be able to say that any increase in primary-good opportunity is valuable whichever of those preferences a person has, we are led to the Unanimity principle - and to nothing more man that. If our concern is with primary-good opportunity, we may be able to make progress in a different way - by following Rawls's contractarian strategy. Recall that Rawls defends his index of primary goods as a metric which, although imperfect, can be agreed on by people who recognize the need for a workable public standard of justice. Similarly, we might look for a workable measure of range of opportunity which is sufficiently salient to command attention as a potential point of agreement. The next Section tests the feasibility of this strategy.
9. A MONEY-METRIC MEASURE OF PRIMARY-GOOD OPPORTUNITY
Despite the difficulties we face when we try to interpret its terms, Arrow's formula seems to have the right sort of structure for a measure of primary-good opportunity. It ranks all opportunity sets, using information about potential preferences. It satisfies the Unanimity Principle. It takes account of all potential preferences, while allowing potential preferences to be weighted according to some (as yet uninterpreted) index of 'probability'; thus, whether or not a particular preference
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ordering should count as 'normal' or 'reasonable' can be a matter of degree, and not just a crude dichotomy. In measuring the amount of opportunity enjoyed by a particular person, it gives no special weight to that person's actual preferences. Thus, it ensures that a person cannot use her own preferences to ground claims of justice. Arrow's formula takes account of diversity in a natural way. Recall the case of the room heaters (Section 4). Consider the opportunity sets A = {15}, B = {19}, C = {15,15.01}, D = {15.01,19}, options being described in degrees Celsius. We want to be able to rank A and B equally, without thereby being committed to ranking C and D equally too; the thought is that D offers more diversity than C. One way of explaining why D offers more diversity is to say that, while a person might well have a fairly strong preference for 15 over 19, or for 19 over 15, anyone would be almost indifferent about a difference of 0.01 of a degree. As a simple numerical example, suppose we have three potential preference orderings, represented by the following utility functions: ^(15) = 100, Uj(15.01) = 101, ua(19) = 200 (a liking for high temperatures); u2(15) = 150, u2(15.01) = 151, u2(19)= 150 (a liking for moderate temperatures); u3(15) = 200, u3(15.01) = 199, u3(19) = 100 (a liking for low temperatures). Notice that these orderings disagree about the ranking of the various temperatures, while agreeing in being almost indifferent between 15 and 15.01. If all three potential preference orderings are weighted equally, Arrow's formula gives V(A) = 150, V(B) = 150, V(C) = 150.7, V(D) = 183.3. Thus, D's diversity - that is, its ability to cater to the range of potential preferences - is duly registered. A similar argument can show that Arrow's formula takes account of complementarity (recall the example of the airline tickets). Of course, to say that Arrow's formula has the right structure is not enough: we need to be able to interpret its terms. In particular, we need an interpretation for the probability distribution -K\,.., ?rn over potential preferences, and we need an interpretation for the common scale in the utility representations u j , . . , u n . Given that - at least in this section of the paper - I am following a contractarian strategy, the aim is to find interpretations that will make Arrow's formula into a workable index of opportunity, capable of securing general agreement as a public standard. I have already defended a sociological account of potential preference in contractarian terms (see Section 6). On this account, the set of potential preferences for any individual is made up of the actual preferences of all the members of a 'reference class' of people. Given this approach, there is a natural interpretation of Arrow's concept of a probability distribution over potential preferences: each probability TH can be understood as the relative frequency of the corresponding preference relation Rj in the reference class. How can we find a common scale for the utility functions which
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ROBERT SUCDEN
represent the different potential preferences? A contractarian measure of opportunity should not be based on any particular theory of well-being, or on any particular conception of the good. Thus, there is no possibility of taking the perspective of an ethical observer making comparisons between the lives of people with different preferences: any such perspective presupposes a particular conception of the good. If we are to make comparisons, then, the currency of comparison must be objective and external. Recall that Rawls uses the currency of primary goods for just this reason. But we cannot simply follow Rawls here: our problem is
to compare preferences.
If we agree with Pareto that preferences are nothing more than the mental states which correlate with acts of choice, there can be no absolute scale of strength of preference. A person prefers x to y if she is willing to take x in exchange for y, but not vice versa: there is nothing more to be said. To ask how strong this preference is, all we can ask is what else the person would be willing to give up, in addition to y, in order to get x. Suppose the person is willing to give up both z and y to get x. How do we know whether giving up z is a big sacrifice (which would imply that her preference between x and y was strong) or only a small one? All we can do is to look for more equivalences. Perhaps she is indifferent between giving up z and giving up w; if giving up w is a big sacrifice, so is giving up z. Clearly, we are going round in circles. Given the Paretian approach, we cannot talk sensibly about strength of preference except by using some external scale as a system of reference. We have to adopt a convention that certain standard options or opportunity sets provide the measure of strength of preference. More precisely, a standard of preference can be defined as a set M of comparators. Each comparator is a potential object of preference - an option or an opportunity set - for every individual. The convention is that strengths of preference are to be described by reference to preferences over elements of M. Thus, if a person prefers x to y, we find some element of M (say mi) which she regards as indifferent to x, we find another element (say m2) which she regards as indifferent to y, and then we describe her strength of preference between x and y as being equivalent to that of her preference between mi and m2. A standard of preference gives us a common scale for describing the strengths of preference of different individuals. Notice that the currency of comparison is objective and external to the individuals: the units of measurement are the physical units appropriate for the objects in M. When we use a standard of preference, we are not claiming to compare individuals' mental experiences, or to compare their levels of well-being. We are simply describing their separate preferences in terms of a common, conventional system of objective references.
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A contractarian standard of preference should be neutral with respect to different conceptions of the good. The best we can do to achieve neutrality is to take as the set of comparators, different quantities of something that everyone can be presumed to want - that is, different quantities of some Rawlsian primary good. In the economic context, the obvious primary good would seem to be income. (Or wealth: since wealth is simply the capitalization of a future flow of income, we can work in either currency, but there is no need to use both.) I have already argued that income is an imperfect index of economic opportunity (Section 3). Nevertheless, it may be the best standard we have. Income is a measure of a person's purchasing power, given the prices prevailing in the market: a person whose income is has the power to buy any bundle of goods which costs no more than < > j at those prices. Let S((|>, p) be the opportunity set available to a person whose income is $ and who faces the prices p. Given those prices, there is a family of opportunity sets S(<j>, p), each corresponding with a different level of income <$>. We can presume that everyone wants to have more income rather than less, with prices held constant. Thus, such a family of S(<|>, p) sets can be used as a standard of preference. This method of arriving at a standard of preference is known in welfare economics as the money metric (George McKenzie, 1983). For every preference relation R;, for every indifference curve Ii, the money metric assigns a money value by finding the value of 4 > such that the most-preferred bundle in the set S(<|>, p) is just on the indifference curve Ij. Given a reference vector of prices p, the money metric provides us with a common scale for representing different preferences, without purporting to make interpreference comparisons of well-being. Of course, any money metric has to be based on a reference vector of prices, and the selection of one vector rather than another must be arbitrary - or, at least, a matter of convention. But that is an inescapable consequence of adopting the Paretian interpretation of preference. Given that interpretation, a standard of preference can be no more than a convention. If potential preferences are understood as the actual preferences of a reference class of individuals, if the probability 7r, of each potential preference ordering is interpreted as its relative frequency in that reference class, and if utility functions are defined by a money metric, then Arrow's formula (1) becomes an operational measure of range of opportunity. Essentially, the index V(A) is the average value of the indirect utility which the different members of the reference class would derive from the opportunity set A. It is important to notice that we are averaging over amounts of income, not amounts of well-being. To say of two opportunity sets A, B that V(A) is greater than V(B) is to say something like the following: on average, individuals who belong to the reference class are willing to give
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up more to get A than they are willing to give up to get B ('more' being interpreted in terms of some conventional set of comparators). Thus, this measure of opportunity is not vulnerable to the objections that can be made against welfarism. It is, I suggest, in the spirit of Rawls's analysis of primary goods.
10. CONCLUSION
I am conscious that I have not made as much progress as I would have liked to have done. Nevertheless, I hope I have persuaded the reader that opportunity is an important concept for political philosophy and for welfare economics; that we need to be able to measure opportunity; and that a measure of opportunity - whether of opportunity as autonomy, opportunity as exercise, or primary-good opportunity - should be based on some concept of potential preference. If I am right about the importance of potential preferences, the problem of measuring opportunity has many similarities with the familiar preference-aggregation
problems of welfare economics and social choice theory. I began with the
hope that, by focusing on opportunity rather than well-being, we might be able to escape those problems; but that hope now seems vain. Perhaps the most we can expect to find are imperfect but workable indices of opportunity, analogous with the money metrics of practical welfare economics.
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Choice in a Social Setting'. In Freedom in Economics: New Perspectives in Normative Analysis. Jean-Francois Laslier, Marc Fleurbaey, Nicolas Gravel and Alain Trannoy (eds.), Routledge Griffin, James. 1991. 'Against the Taste Model'. In Interpersonal Comparisons of Weil-Being, pp. 45-69. Jon Elster and John E. Roemer (eds.). Cambridge University Press Hausman, Daniel M. and Michael S. McPherson. 1996. Economic Analysis and Moral Philosophy. Cambridge University Press Hayek, Friedrich A. 1960. The Constitution of Liberty. Routledge and Kegan Paul Jones, Peter and Robert Sugden. 1982. 'Evaluating choice'. International Review of Law and Economics, 2:47-65 Klemisch-Ahlert, Marlies. 1993. 'A comparison of different rankings of opportunity sets'. Social Choice and Welfare, 10:189-207 Kreps, David M. 1979. 'A representation theorem for "preference for flexibility'". Econometrica, 47:565-77 Koopmans, T.C. 1964. 'On the Flexibility of Future Preferences'. In Human Judgments and Optimality. M. W. Shelley and J. L. Bryans (eds.). Wiley McKenzie, George W. 1983. Measuring Economic Welfare: New Methods. Cambridge University Press Mill, John Stuart. 1859/ 1972. On Liberty. Dent Nehring, Klaus and Clemens Puppe. 1996. 'Continuous extensions of an order on a set to the power set'. Journal of Economic Theory, 68:456-79 Nozick, Robert. 1974. Anarchy, State, and Utopia. Basic Books Pareto, Vilfredo. 1906/1972. Manual of Political Economy. Trans. A. S. Schweir. Macmillan Pattanaik, Prasanta and Yongsheng Xu. 1990. 'On ranking opportunity sets in terms of freedom of choice'. Recherches Economiques de Louvain, 56:383-90 Pattanaik, Prasanta and Yongsheng Xu. 1995. 'On preference and freedom'. Mimeo, University of California at Riverside and University of Durham Puppe, Clemens. 1995. 'Freedom of choice and rational decision'. Social Choice and Welfare, 12:137-53 Puppe, Clemens. 1998. 'Individual freedom and social choice'. In Freedom in Economics: New Perspectives in Normative Analysis. Jean-Francois Laslier, Marc Fleurbaey, Nicolas Gravel and Alain Trannoy (eds.), Routledge Rawls, John. 1971. A Theory of Justice. Harvard University Press Rawls, John. 1982. 'Social Unity and Primary Goods'. In Utilitarianism and Beyond, pp. 159-86. Amartya Sen and Bernard Williams (eds.). Cambridge University Press Scanlon, Thomas M. 1991. "The Moral Basis of Interpersonal Comparisons'. In Interpersonal Comparisons of Well-Being, pp. 17-44. Jon Elster and John E. Roemer (eds.). Cambridge University Press Sen, Amartya. 1970. "The impossibility of a Paretian liberal'. Journal of Political Economy, 78:152-57 Sen, Amartya. 1991. 'Welfare, preference and freedom'. Journal of Econometrics, 50:15-29 Sen, Amartya. 1992. Inequality Reexamined. Harvard University Press Suppes, Patrick. 1987. 'Maximizing Freedom of Decision: An Axiomatic Analysis'. In Arrow and the Foundations of the Theory of Economic Policy. G. R. Feiwel (ed.). Macmillan Van Parijs, Philippe. 1995. Real Freedom for All: What (if Anything) is Wrong with Capitalism? Clarendon Press
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Economics and Philosophy, 14 (1998), 307-337 Copyright Cambridge University Press

THE METRIC OF OPPORTUNITY

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