On Joseph Cropsey’s “What Is Welfare Economics?”

CEAR WP 2021-04, 2021

Wade Hands (2013) critically consolidated a new and growing approach to revealed preference interpretations and methods, which he called "Contemporary Revealed Preference Theory" (CRPT). He recognised that CRPT is folded into a more comprehensive philosophy of economics due to Don Ross, which Ross dubs "Neo-Samuelsonian Philosophy of Economics" (NSEP). Hands calls this "the elephant in the room" where his criticisms of CRPT as an account of normative economics are concerned. I address Hands's criticisms of CRPT using the full resources of NSPE. This leads to substantial reconsideration of normative economics, with respect to both assessments of general rationality in economic agents, and emphasis on welfare improvement in applied policy work. Main conclusions are that (1) economists are not properly in the business of assessing general rationality, a topic best left to a philosophical tradition descended from Aristotle; (2) the borrowing of theoretical structures from the foundations of microeconomics in the project of philosophical decision theory encourages the idea that there should be a rigorous bridge between economists' interest in technical choice consistency and philosophers' interest in general rationality, but NSPE implies that this approach to bridge-building is misguided; (3) economics is a policy science, but the policy domains to which it aims to be relevant are public and corporate, not personal; (4) NSPE provides clearer insight than alternative philosophies of economics as to why economists concentrate on welfare, rather than wellbeing, as their primary normative target.

Journal of Economic Perspectives, 2016

Expected utility theory dominated the economic analysis of individual decision-making under risk from the early 1950s to the 1990. Among the early supporters of the expected utility hypothesis in the von Neumann–Morgenstern version were Milton Friedman and Leonard Jimmie Savage, both based at the University of Chicago, and Jacob Marschak, a leading member of the Cowles Commission for Research in Economics. Paul Samuelson of MIT was initially a severe critic of expected utility theory. Between mid-April and early May 1950, Samuelson composed three papers in which he attacked von Neumann and Morgenstern's axiomatic system. By 1952, however, Samuelson had somewhat unexpectedly become a resolute supporter of the expected utility hypothesis. Why did Samuelson change his mind? Based on the correspondence between Samuelson, Savage, Marschak, and Friedman, this article reconstructs the joint intellectual journey that led Samuelson to accept expected utility theory and Savage to revise h...

2013

Remaking Economics: Eminent Post-War Economists, 2019

am grateful to Wade Hands and Philippe Mongin for several discussions on Samuelson's theory of choice; these discussions were the main motivation for writing this paper. Some portions of this chapter draw in part on work previously published elsewhere, namely Moscati 2013 and Moscati 2018. Any errors are mine.

This article reviews the question of whether or not the study of values has or ought to have an important role in the study of economics. The positivist view of Robbins is criticised. Economists cannot ignore the formation of values in their assessment of welfare especially when welfare is affected by the growth and development of the economy. This is illustrated for instance by Weckstein's theory of welfare criteria and changing tastes which indicates that the variables which economists have conventionally regarded as being the determinants of an individual's welfare are not the relevant ones. Similarly the theory advanced by Scitovsky in The Joyless Economy, though different from those of Weckstein and of Marcuse, suggest that economists may not be selecting appropriate measures of welfare. Hollis and Nell, Gintis, Peacock and Rowley have also criticised the limited focus of welfare economics (Paretian welfare economics) from other points of view. The point is made that there are unresolved problems of relevance to economics concerning values·and preferences which can in principle be studied along positivist lines. There is a strong case for economists giving more consideration to these problems.

2015

Jon Elster has made important contributions to several fields, including rational choice theory, political science, and philosophy. The breadth and depth of his writings are striking in a time of high specialisation; he is read and discussed by political scientists, economists, and philosophers. His work is difficult to summarise in a slogan, but virtually all of it has to do with problems of rational choice explanation in social science, much of it as a methodological dimension, and it is generally informed by a broad and deep acquaintance with relevant literatures in economics, political science, history, philosophy, and psychology. In what follows I will discuss Elster's contribu-tions to a series of problem areas: the foundations of the theory of rationality, social welfare theory, philosophy of social science, and analytical Marxism. It is impossible to touch on every point of interest, or even a representative sampling; instead I will single out several important areas of...

Journal of Business Ethics, 2024

The issue of interpersonal comparisons of utility is about the possibility (or not) of comparing the utility or welfare or the mental states in general, of different individuals. Embedded in the conceptual framework of utilitarianism, interpersonal comparisons were admissible in economics as part of the theoretical justification of welfare policies until the first decades of the twentieth century. Under the strong influence of the scientific philosophy of positivism as reflected in the works of early neoclassical economists and as epitomized by Lionel Robbins, utility comparisons were subsequently rejected as a value judgement. Robbins' methodological stance is still prevalent among mainstream economists. Despite the explicit rejection of comparability by the majority of economists, interpersonal comparisons are necessary for many key policy issues, such as progressive taxation, social welfare policies, GDP-based welfare comparisons, cost-benefit analysis, and public goods provision. In this paper, the case of interpersonal utility comparisons is discussed as an illustrative example of the usefulness of the study of the role of value judgements, and generally of the interrelationship between ethics and economics. It is argued that the current tension between theory and policy practice might be resolved through the efforts of prominent economists and philosophers to challenge positivism, and especially its problematic treatment of value judgements and of ethical assumptions in general. The discussion also provides more strength to the view that policy makers and their economic advisers cannot avoid ethical questions in their analysis of the workings of the economic system.

SSRN Electronic Journal, 2017

The death of welfare economics has been declared several times. One of the reasons cited for these plural obituaries is that Kenneth Arrow's impossibility theorem, as set out in his path-breaking Social Choice and Individual Values in 1951, has shown that the social welfare function-one of the main concepts of the new welfare economics as defined by Abram Bergson (Burk) in 1938 and clarified by Paul Samuelson in the Foundations of Economic Analysis (1947, ch. VIII)-does not exist under reasonable conditions. Indeed, from the very start, Arrow kept asserting that his famous impossibility result has direct and devastating consequences for the Bergson-Samuelson Social Welfare Function (1948, 1950, 1951a, 1963), though he seemed to soften his position in the early eighties. On his side, especially from the seventies on, Samuelson remained active on this issue and continued to defend the concept he had devised with Bergson, tooth and nail, against Arrow'

Dialogue, 1983

SSRN Electronic Journal, 2000