IEAS Working Paper No. 22-A002, June 2022
Suppose that people in a capitalist society order policies mainly by comparing their wealth changes induced by various policies. We show that property prices play the role of aligning individual preferences, which naturally modifies the axiom of universal domain of the social decision function. Under reasonable assumptions, we prove that this alignment effect eliminates the possibility of Condorcet Cycles and warrants the transitivity of the majority voting mechanism. Taking away private property, as in the doctrinal Communist society, will reinstitute Condorcet Cycles, returning the inescapable conclusion of a dictatorial social decision rule, as implied by Arrow's impossibility theorem. Our result provides partial support to the practices of the property-ownership test of voting eligibility implemented in many democratic countries.