AlexMennen comments on A fungibility theorem - Less Wrong
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Additional to the purely mathematical problem stated above (but I preferred to make two different comments since they are on a totally different basis), I've a few problems with using such kind of reasoning for real life issues :
A Pareto optimal is a very weak condition. If you've a set of 10 values, and you've three possible outcomes : Outcome A is 100 for value 1, and 0 for all others. Outcome B is 99.99 for value 1, and 50 for all others. Outcome C is 99.98 for value 1, and 45 for all others. Outcome A and B are both equally Pareto optimal. But unless one value really trumps all the others, we would still prefer outcome C than outcome A, even if C isn't a Pareto optimal. But having a decision algorithm that is guaranteed to chose a Pareto optimal doesn't say if it'll take A or B. And I prefer a decision algorithm that will select the non-Pareto-optimal C than one which will select the Pareto-optimal A, in the absence of one which is guaranteed to take B (which being Pareto-optimal doesn't). (That's also an issue I've with classical economics, btw.)
Since we don't know all our values, nor how to precisely measure them (how do you evaluate the "welfare of mammals" ?), nor does the theorem give any method for selecting the coefficients, it is not very useful to take decisions on your daily life to know that such an utility function can exist. It is important when working on FAI, definitely. It may have some importance in reasoning about meta-ethics or policy making. But it's very had to apply to real life decisions.
Insisting on Pareto optimality with respect to your values does not rule out all unreasonable policies, but it does rule out a large class of unreasonable policies, without ruling out any reasonable policies. It is true that the theorem doesn't tell you what your coefficients should be, but figuring out that you need to have coefficients is a worthwhile step on its own.