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Social engineering is the design and implementation of systems and incentives in a human group, institution, or community to accomplish explicit objectives in its allocations of well-being. Examples of such systems and incentives include socially responsible investing and subsidies, taxes and other confiscations of private property, regulations, and socialism.

Social engineering is intended to bring about a moral and fair society. It focuses attention on an intended just distribution throughout society of basic human rights (e.g., housing, health care, food, etc.) and negative freedoms (e.g., freedom from want). One example of social engineering is the affirmative action programs in the United States. These are government orders and regulations intended to bring about ethnic and racial diversity in the important U.S. institutions of commerce, education, and housing. Other examples include minimum-wage laws intended to reduce the ranks of the working poor and private social entrepreneurship ventures intended to fundamentally change the distribution of well-being in poor social segments.

Social engineering effectiveness depends, in large part, on the integrity of decision makers to act for the benefit of society and without regard for their personal self-interest. Important ethical principles include integrity, honesty, social responsibility, compassion, empathy, the avoidance of conflict of interest, and justice.

There are trade-offs between moral ideals and realworld consequences that call for consideration of positive and negative rights (e.g., freedom for autonomous individuals to make choices vs. freedom from poverty). A consequential, or teleological, approach to social engineering suggests cost-benefit analysis and feasibility issues not likely to be included in deontological, or purely philosophical, approaches. Ethical issues concern the need to balance between commutative and distributive forms of justice. For example, distributive justice principles support a socially engineered society in which people who score well on standard tests receive the same social allocation of welfare as people who score poorly; commutative justice supports engineering society to give all test takers fair access to social institutions where their natural endowments can take them as far as their talent enables.

To ensure smooth functioning of social engineering, government must enforce regulations, raise funds to finance social projects, seize private property that can be put to better social uses (the practice of eminent domain), and monitor the activities of society along dimensions of interest to social engineers. Important ethical issues here are balancing positive and negative rights (e.g., freedom to act vs. freedom from harm), self-interest versus utilitarian benefit, and individual autonomy versus social welfare.

One important issue in the practice of social engineering is that the definition of well-being is subjective, that is, based on individual perception. This calls attention to issues of fairness in the process of engineering society. Self-interested individuals want to effectively participate in the group, institution, or community to increase their personally defined welfare, subject to the rights of others. The rights of others, however, may call for personal sacrifice for the gain of others. The ethics of persuasion are important in this process of social engineering.

Adam Smith wrote (Wealth of Nations, 1776) that free self-interested exchange most efficiently uses society's resources to bring about social welfare. A laissezfaire approach to social engineering, grounded in ethical principles of economic efficiency, designs and implements systems and incentives to ensure the smooth functioning of free markets. Important ethical principles in this approach include cost-benefit analysis, honesty, trust, contract, autonomy, liberty, compliance with government requirements, and private property.

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