Questioning Layard

In my notebook I see my notes for the question that I asked Layard at the Brookings talk last week, and which I meant to blog. Here's more or less what I said/asked.

Well, context first. . . Layard had promoted abandoning the theory of revealed preference as the basis of economic inquiry and policy analysis and recommended substituting his brand of normative hedonism/eudaimonism.

I said:

You said we should give up on the idea of theory of revealed preferences. I want to defend it, and hear your response.

Perhaps the fact that people behave in ways that don't maximize their happiness is evidence that people don't always demand happiness. This raises two points, one scientific and one political.

The scientific point: Social science based on taking a side in hotly contested arguments about the metaphysics of value doesn't count as science.

The political point: In a pluralistic society where people have fundamental disagreements about the nature of value, taking a side and basing policy on one philsophical conception of value is inappropriate.

Layard's answer? He seemed to me to avoid the question. He reiterated a point he had made earlier to the effect that we can't tell what makes people happy by observing their revealed preferences, or that individual behavior when scaled up to the macro-level can have results that fail to maximize happiness, or some such thing. (If someone who was there can remember just what he said, please do correct me, or elaborate.) Whatever it was, he didn't even approach the scientific and political points, which I think deserve to be taken seriously.

How would you respond?