Arrow proved the inconsistency of a set of reasonable looking conditions on a social decision rule. These conditions are stated and their rationale explained. It is argued that the blame for the inconsistency must lie with Arrow's Collective Rationality condition. Arrow's abstract problem is generalized and interpreted in terms of individual as well as collective decision-making. His conditions are revised so that (1) cardinal -even interpersonal -utility comparisons are allowed and (2) the Collective Rationality condition -which formulates the traditional conception of rational choice as maximizing choice -is weakened to its bare bones. The revised set of conditions is still inconsistent. Once again the culprit is the Collective Rationality condition, now drastically weakened: even the bare bones of Arrow's conception of rational choice as maximizing choice is untenable. An alternative conception is proposed.
I. ARROW'S PARADOX AND BEYOND
In his classic study of social decision-making, Kenneth Arrow proved that certain reasonable looking conditions cannot be satisfied by any rule for guiding social decisions -for evaluating social policy options. 1 To demand that a social decision rule D meet these conditions amounts to imposing three requirements on D: MINIMUM DEMOCRACY REQUIREMENT. Collective decisions-socialdecisions prescribed by D -should reflect people's preferences at least to a certain limited extent.
For instance, if everyone prefers x to y, x should be collectively preferred to y in this sense: D enjoins society to choose x when x and y exhaust the available options.
For convenience I follow Arrow in speaking of preferences. But 'preference' may be interpreted as you please. You might take 'Jones prefers x to y' to mean Jones would pick x rather than y, given a choice between the two. You might take it to mean x is preferable to y according to Jones's tastes, values, goals, desires or interests. Or you might take it to mean Jones would derive more happiness, satisfaction, benefit, 'utility' or whatnot from x than from y.