Can Social Planning Enhance Individual Flourishing?

In this article my focus is on the human development (HD) approach to social planning. Much has been previously written about the failures of central planning in providing a satisfactory framework for economic development. Most readers will already know about the failures of central planning in the Soviet Union and many low-income countries. The deficiencies of the HD approach have received less attention, presumably because it has the appearance of being a benign form of social planning designed to expand individual opportunities.

The concept of “human development” is closely associated with the annual Human Development Report of the United Nations Development Program (UNDP). The concept was originally anchored in the work on human capabilities of Amartya Sen, a famous philosopher/economist, whose aim was to counter the neglect of the human element in economic development policies adopted by governments. Sen suggested that HD should be defined as “a process of enlarging people’s choices in a way that enables them to lead longer, healthier and fuller lives.”

I am using the term “human development” (HD) to encompass forms of social planning that aim to improve the well-being of individuals by influencing the choices they make, as well as those which enlarge their opportunities.

In this article I am using the term “human development” to encompass forms of social planning that aim to improve the well-being of individuals by influencing the choices they make, as well as those which enlarge their opportunities. The influencing of choices seems consistent with Sen’s view that people should “have reason to value” the outcomes that they seek. He uses those words in explaining the meaning of the title of his book, Development as Freedom:

“In pursuing the view of development as freedom, we have to examine—in addition to the freedoms involved in political, social and economic processes—the extent to which people have the opportunity to achieve outcomes that they value and have reason to value.” (p 291)

Sen argues strongly in favour of human rights, but he leaves the door open for social planners to claim that individuals do not have reason to value some of the things that they aspire to have.

I have refrained from using the concept of development as freedom in Freedom, Progress, and Human Flourishing because I don’t think conflating ideas about freedom, progress, and human flourishing in an encompassing concept of freedom offers any insight into the relationships between those concepts.

HD is an activity that social planners are engaged in, whereas human flourishing is an activity that individual people are engaged in.

The more fundamental point I make is that HD and human flourishing are different concepts. HD is an activity that social planners are engaged in, whereas human flourishing is an activity that individual people are engaged in. If we want to explore the relationships between freedom, progress, and human flourishing, we need a conceptual framework based around an understanding of the nature of human flourishing that individuals are engaged in, and the basic goods that are integral to human flourishing.

At this point, some readers may be wondering what difference it actually makes to view human flourishing from an individual’s perspective rather than from a social planner perspective. There are important differences associated with the way progress is viewed and measured, and in views adopted about individual decision-making. Before discussing those differences, however, I need to outline my approach to the question of what it means to be a flourishing human.

What are the basic goods of a flourishing human?

As I see it, the question of what it means to be flourishing is a matter for individuals to reflect upon, discuss with others, and ultimately to decide for themselves. I draw on the ancient wisdom of Aristotle and some modern writers in seeking to persuade readers that there are five basic goods that a flourishing human could be expected to have:

1. Wise and well-informed self-direction
2. Health and longevity
3. Positive relationships with others
4. Living in harmony with nature
5. Psychological well-being

You will need to read Freedom, Progress, and Human Flourishing to understand why I argue for those items to be considered as basic goods. For present purposes, there are just a couple of points to make.

First, basic goods are linked together as an integrated whole when an individual is flourishing. You can test that by listening to the responses of your friends when you ask them how they are faring these days. In my experience, when encouraged to offer more than perfunctory responses, people tend to talk about a combination of different things related in some way to those basic goods.

Self-direction is of fundamental importance.

Second, self-direction is of fundamental importance. It is implicit in the idea that it is ultimately for individuals to decide for themselves what it means to be flourishing. Once we recognize the importance of self-direction to individual flourishing, that poses the question of what rules of the game—or political and legal order—would allow greatest opportunities for individual self-direction. My views have been strongly influenced by the way Douglas Rasmussen and Douglas Den Uyl answer that question in their book, Norms of Liberty. Liberty provides the context in which individuals can flourish in different ways—in accordance with their own values—provided they do not interfere with the natural rights of others.

What counts as progress?

I define progress as growth of opportunities for human flourishing and discuss those opportunities by reference to the basic goods. This definition is broadly consistent with the view of progress as ongoing betterment of the conditions of humanity, which developed in France and Scotland in the 17^th and 18^th centuries.

As well as providing individuals with the greatest possible scope to exercise self-direction, liberty provides them with strong incentives to learn how to make wise and well-informed choices. Individual responsibility is a corollary of liberty. The choices that individuals make to pursue their aspirations often involve voluntary cooperation with others to obtain benefits of specialization and exchange in free markets. Importantly, those choices can also involve innovation. The economic growth resulting from such processes has been associated with widespread expansion of opportunities for human flourishing.

Economic growth qualifies as progress because people often aspire to have more of the goods that economic growth provides. The book explains that economic growth has also helped people to have better physical health and psychological well-being. As their income-earning potential rises, people also have opportunities to enjoy more leisure with family and friends, and to give higher priority non-materialist aspirations, including a desire to live in greater harmony with nature.

Over the last 200 years, ongoing innovation has been supported by the positive attitude that increasing numbers of people have had toward technological innovation and productivity growth. In an expanding number of countries, people have been willing to accept the possibility that innovation may disrupt their lives because they have recognized the potential benefits to themselves and their descendants of the expansion of opportunities that it offers.

How do human developers view progress?

As you might expect, the indicators I refer to in discussing differences in opportunities to obtain basic goods in various countries overlap considerably with indicators covered in the UNDP’s Human Development Reports. However, my approach differs from that of the UNDP in one crucial respect. It recognizes that self-direction is central to human flourishing and, for that reason, acknowledges explicitly the importance of liberty and human rights in enabling individuals to achieve their aspirations. By contrast, despite claims that it respects the idea “of enlarging people’s choices,” the UNDP’s human development index (HDI) does not incorporate any indicator of liberty or human rights—it only takes account of life expectancy, education, and gross national income per capita. The UNDP also uses nine other broad indicators, but those do not include indicators of freedom, liberty, or human rights.

UNDP’s human development index (HDI) does not incorporate any indicator of liberty or human rights.

So far, the UNDP’s approach to HD has focused on issues associated with measurement, leaving economic policy to mainstream economists.  In their book, Advancing Human Development, Frances Stewart, Gustav Ranis and Emma Samman, whose association with the UNDP began in the 1980s, advocate a more ambitious policy agenda. These authors suggest that the HD approach should now be broadened to explore in depth “the implications and requirements of the HD objective for the way the economy is structured and managed.” They foreshadow that the kind of economic system that would provide decent work for all and fair income distribution would be likely to involve “a switch from a capitalist system to a ‘sharing’ economy (i.e. one where resources are owned and controlled by workers, consumers, or the community, and benefits from production shared equitably among them).” (p 231)

I hope the authors do not envisage further replication of the failed experiments in socialism that have taken place in various parts of the world over the last century. Whatever they have in mind, it seems unlikely that their rejection of capitalism is compatible with recognition of the importance of self-direction to individual flourishing, and of the role of liberty in enabling individual self-direction.

Shaping individual choices

In a report entitled, Mind, Society, and Behavior, (World Development Report 2015) the World Bank asks the question, “Why should governments shape individual choices?” That is a good question, but the answer provided by the authors of that report seems to me to be unwise.

The authors argue that governments have a role in shaping individual choices because people are prone to make choices that do not promote their own well-being. They cite the findings of behavioral economics and psychological research in support of the view that people often make poor choices.

I see three problems with that line of argument. First, my reading of relevant research suggests that it is unduly pessimistic to conclude that large numbers of people are so prone to make serious mistakes in pursuing their individual aspirations that they need wise and well-informed governments to shape their choices for them.

Second, I am more optimistic about the capacity of adult individuals to accept responsibility for managing their own lives than I am about the likely outcomes of alternatives requiring intervention by wise and well-meaning governments. In the real world, wise and well-meaning governments are difficult to find. And even if we were lucky enough to have wise and well-meaning governments to guide us, they would not know as much as we do about our individual values and aspirations.

Third, social planners underrate the importance of self-direction to the flourishing of individuals. We develop our ability for self-direction through experience, in making choices and accepting responsibility for those choices. As Aristotle observed, flourishing humans seek to attain their potential to be good humans—who exercise practical wisdom and other virtues—and take pleasure in doing so. The importance of self-direction is obvious to each of us when we look back at the decisions we have made in the past. We feel a sense of achievement as we recall good choices that opened up opportunities or enabled disasters to be avoided. The more aspects of our lives we allow governments to manage for us, the more we deprive ourselves of the satisfaction which comes from meeting the challenges of self-direction.

Of course, when we look back, most of us also see some choices we regret. Self-direction does pose challenges. In Freedom, Progress, and Human Flourishing the focus of the discussion of the findings of research on common cognitive errors and determinants of happiness is on how individuals can use those findings to cope with the challenges of self-direction.

For example, it is useful to be aware of the potential for our intuitions to lead us astray in making decisions that require thoughtful deliberation. Our ancestors would not have survived to maturity if they were unable to recognize when they needed to slow down and think carefully. At crucial moments they were presumably able to remember cautionary tales about the mistakes that others had made by relying on their intuitions when they should have thought more carefully. There is no good reason why we can’t do likewise.

Conclusions

HD has the appearance of being a benign form of social planning that has potential to expand individual opportunities. It may even be claimed that some governments have pursued policies under a HD banner that have fostered the economic freedom required for mutually beneficial exchange, innovation, and productivity growth. Where such policies have been pursued, they may have helped people to meet their individual aspirations for basic goods including health and longevity, and psychological well-being.

Social planning is now extending into the realm of shaping individuals’ choices in ways that are likely to deprive individuals of the satisfaction which comes from meeting the challenges of self-direction.

However, the HD approach is not as benign as it appears. As adopted by the UNDP, the HD approach to measurement of progress downplays the importance of self-direction to human flourishing by excluding indicators of freedom, liberty, and human rights. Moreover, in advocating a switch from a capitalist system to a ‘sharing’ economy, some HD practitioners now seem to be advocating policies opposed to the economic freedom that is the basis for growth of individual opportunities.

Furthermore, social planning is now extending into the realm of shaping individuals’ choices in ways that are likely to deprive individuals of the satisfaction which comes from meeting the challenges of self-direction.

An important message of Freedom, Progress, and Human Flourishing is that the people who live in the Western liberal democracies and an increasing number of other countries are fortunate to have opportunities for self-directed flourishing that their ancestors could only have dreamed about. It is unfortunate to see people now passing over those opportunities by allowing social planners to govern their lives.

Related Posts:

1. Freedom in a Global Context: What Japanese Individuality and American Groupism Tell Us
2. Ayn Rand’s Aristotelian Philosophy of Human Flourishing
3. Ayn Rand, Aristotle, and the Ethics of Flourishing

   

About the Author: Winton Bates

Winton Bates is an Australian economist. He first became professionally involved in broad issues concerning human flourishing in the early 1990s. Before then, his career focused on public policy relating to economic development, international trade, productivity growth and technological progress. Whilst retaining his professional interest in such matters, he has become increasingly interested in economic history, happiness economics, behavioral economics, self-help psychology, politics, and Aristotelian philosophy. Winton is the author of "Freedom, Progress, and Human Flourishing," published by Hamilton Books in 2021. He blogs at "Freedom and Flourishing.".