Questioning Non-welfarism
Economists have often assumed that, if it is to achieve its scientific objectives, welfare economics should either be free of any value judgements, attributing such a view to Lionel Robbins (1932), or it should be based only on generally accepted value judgements.
Considering only utility information so that the only judgements involved are those that come from individuals whose welfare is being analysed was, therefore, a way to defend the consumer’s sovereignty, generally considered more acceptable in a free society than paternalism. However, even the economists most closely associated with the welfarist approach, when considering operational issues and practical matters, came to support a non-welfarist framework. Conversely, when some welfare economists who support a non-welfarist framework have engaged with practice, they have faced issues of measurement and paternalism, being forced to provide solutions.Kotaro Suzumura (Chapter 7) examines the work of John Hicks whose ‘Manifesto’ (1959) used the term ‘Economic Welfarism' as a label for the view that he did not hold. He asks how far Hicks was prepared to go from welfarism, concluding that he was prepared to abandon consequentialism: not only may a wide set of consequentialist information besides utility be relevant, but some non-consequentialist information could also be invoked, examples including opportunity sets, procedure and rights. It is significant that this departure from welfarism came in a book titled Essays in World Economics, for this makes clear that the context was dealing with practical problems. Suzumura responds to Hicks’s challenge to welfarism by drawing on the past fifty years of normative economics to explore the possibilities for integrating non-welfarist and non-consequentialist information into the analysis of welfare.
Because it was Sen who stimulated modern discussions of welfarism and non-welfarism, the case that he challenged welfarism does not need to be made. One well-known aspect of Sen’s contribution to justice issues is the capability approach, presented as an alternative to both ‘utility fetishism’ and ‘resource fetishism’ (Sen 1985a, 1985b).
However, describing Sen’s capability approach as the alternative to standard welfare economics would fail to capture the major turning point represented by the capability approach, and would involve a misunderstanding of Sen’s much more drastic criticism of welfarism.Constanze Binder (Chapter 12) presents the wide diversity of capability approaches after Sen and Martha Nussbaum introduced the notion. All capability approaches seek to justify normative theories of justice and to provide operational tools for the evaluation of decision-making which overcome the issues raised by welfarism. Some attach intrinsic importance to freedom, some tackle the issues of preference adaptation and some avoid the neglect of diversity which can arise in the context of paternalism. However, Binder argues that none of them succeeds in providing a satisfactory response to all three challenges. In other words, some problems occurring with welfarism may reappear with non-welfarism. Binder explains why this is so, and argues that a way out of this problem requires more attention to democratic values, such as human agency.
Given that Sen is generally considered one of the pre-eminent contemporary welfare theorists and social choice theorists, it is not obvious that his movement beyond welfarism came in the context of addressing practical problems. That this was the case is argued by Muriel Gilardone (Chapter 13), who links Sen’s development of the capability approach to his extensive work on theories of justice and to his applied work on poverty, inequality and entitlements. His theoretical welfare economics is part of a novel approach in which, with a particular consideration of avoiding paternalism, agency and public reasoning are the core elements.
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