Collaboration with Bergson
Samuelson has argued that credit for developing what has come to be known as the Bergson-Samuelson social welfare function rests squarely with Abram Bergson, then Abram Burk (he changed his name as a matter of principle because he did not consider it sounded sufficiently Jewish, the opposite of the normal practice).
“Mine,” he wrote, “was the spectator’s seat for Bergson’s creative travail. I was the stone against which he honed his sharp axe - the semiabsorbing, semireflective surface against which he bounced off his ideas” (Samuelson, 1981, p. 223). In conversation with Kotaro Suzumura (2005, p. 334), Samuelson went slightly further in claiming that he was the “helpful midwife” who helped pull the baby out, denying emphatically that he was a co-author of the crucial paper.Bergson and Samuelson came to the idea of a social welfare function whilst attending courses as graduate students at Harvard in 1935-7 (see Backhouse, 2017). Theyboth wrote articles on consumer theory and on the measurement of utility (Burk (Bergson), 1936; Samuelson, 1937; Samuelson, 1938c). In these papers, they noted, Bergson implicitly and Samuelson explicitly, that there was a gap between that field and welfare economics. Thus Bergson wrote that utilities, as calculated by Ragnar Frisch, whose work he was criticizing, could “in no sense be considered measurements of real money utility” (Burk(Bergson), 1936, p. 42, n. 1). Ifit did not measure real money utility then, a fortiori, utilities could not have welfare implications. Samuelson went further, writing at the end of his first paper: “[A]ny connection between utility as discussed here and any welfare concept is disavowed. The idea that the results of such a statistical investigation could have any influence upon ethical judgments of policy is one which deserves the impatience of modern economists” (Samuelson, 1937, p.
161). He made exactly the same point in his next publication: “[N]othing said here in the field of consumer’s behaviour affects in any way or touches upon at any point the problem of welfare economics, except in the sense of revealing the confusion in the traditional theory of these distinct subjects” (Samuelson, 1938c, p. 71).Implied in Samuelson’s brief remarks is a criticism of virtually all existing literature on welfare economics for confusing two completely different concepts. “Utility,” as used in the theory of the consumer, was
a device for analyzing how consumers behaved - for modelling the choices they made when confronted with prices and incomes - but it had been widely assumed that it could also be used to form welfare judgments. Modern writers avoided committing themselves to utilitarianism, with its suggestions of hedonism (that people were mechanical seekers of pleasure and avoiders of pain) but the connection between welfare and the consumer had not been abandoned. A. C. Pigou, whose Economics of Welfare (1920, 1932) had by then been through four editions and whose work dominated discussions of welfare in the English-speaking world in the 1920s, argued in terms of “satisfactions” rather than utilities, and he pointed to many limitations of the utilitarian criterion, but he still grounded his analysis of welfare on his theory of the consumer. Pareto (1909) also refused to argue in terms of utility, preferring the term “ophelimite,” but though he was willing to distance himself further from an aggregative notion of welfare, he still saw a close connection between the two. So too did most of the literature on welfare economics with which Samuelson and Bergson were engaging.
In contrast, though the idea was not developed, Samuelson described welfare economics as “ethical judgments of policy.” He had not forgotten what he had learned from Knight. Given the timing, it seems plausible to conjecture that in writing these brief remarks, both tacked on at the very end of the paper, he was responding to reactions to Bergson's article, published shortly before.2
Their starting point for more substantial work on the problem of welfare was Pareto (see Arthmar and McLure, Chapter 6, this volume).
At some point in 1937, during the second year of Samuelson's coursework, Bergson kept asking Samuelson, “What can Pareto mean by this 1898 use of the French singular when he speaks of ‘the social optimum'?” (Samuelson, 1981, p. 224). Their conclusion was that Pareto's writings were ambiguous and that he meant different things. Samuelson explained this to Suzumura (Suzumura, 2005, p. 334) in the following way.I had to read Pareto in the Italian original, and my command of Italian was very poor. Nevertheless, I had a feeling when I read the 1913 article - I say this with diffidence - that he may momentarily have had the notion of an imposed-from- outside social welfare function.... But I thought I detected in it also a positivistic real political function of certain elites in any society. Each one of these elites has different power, like the powers of father and mother, oldest son, younger sons in
This remains a conjecture, for the precise timing of these articles, and the lags between submission and publication, are not known.
a family. If you try to get a demand function for the family, you must combine these different influences. Generally speaking, when you do that, you don't get an integrable function. To me, that was what Pareto was talking about in the 1913 article.
Samuelson makes two points here. The first is that he thought Pareto glimpsed the idea of “a positivistic real political function of certain elites in society,” an idea he no doubt expressed diffidently as he could have been reading Arrow's social welfare function into his memory of Pareto. The second is the idea that he and Bergson developed: the notion of “an imposed-from-outside” function that represented a particular set of ethical values. Welfare was a normative judgment conceptually completely different from propositions about behavior. However, in Bergson's paper on the subject (Bergson, 1938) such points were not made explicitly.
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