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Economics as applied Ethics value judgementsin welfare economics Beckerman

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Описание

Contents

List of Figures ix

Acknowledgements x

Introduction 1

1 Fact or Value? A Simple Example: Sustainable Development

and the Discount Rate 7

1.1 Fact or value? An illustration 7

1.2 Enter the ‘values’ 9

1.3 Uncertainty and the role of intuition 12

1.4 Conclusions 14

2 Positive Propositions and Value Judgements 15

2.1 Welfare economics and public policy 15

2.2 Positive and normative economics 16

2.3 Value judgements 17

2.4 Value judgements in personal choice 20

3 Fact and Value in Welfare Economics 23

3.1 The construction of normative economics 23

3.2 Value judgements in public policy 24

3.3 Example I: the equality—efficiency conflict 26

3.4 Example II: the conflict between price stability and

full employment 30

3.5 Example III: ‘Fair Trade’ 32

3.6 Conclusions 33

4 From Individuals’ Choices to their ‘Welfare’ 35

4.1 From individuals’ choices to their welfare 35

4.2 The ‘utility function’ in economics 35

4.3 Preferences and theories of ‘the good’ 37

4.4 Rational and irrational choices 38

4.5 Examples of irrational behaviour 40

4.6 Rational but mistaken 43

4.7 Altruism and ‘commitment’ 44

4.8 Commitment and standard models of consumer behaviour 46

4.9 The road to paternalism 47

4.10 Conclusions 49

5 Pareto Optimality and the Social Welfare Function 51

5.1 Policy criteria: some initial questions 51

5.2 The concept of Pareto optimality 52

5.3 Pareto optimality and the distribution of incomes 55

5.4 The concept of a social welfare function 57

5.5 Interpersonal comparisons of utility and

common sense 61

5.6 ‘Welfarism’ or ‘how sovereign are people’s

preference rankings ? ’ 63

5.7 Conclusions 64

6 From Individuals’ Welfare to Social Welfare 66

6.1 What society? 66

6.2 Social choice theory 68

6.3 The welfare economics approach 71

6.4 An example: the ‘Summers memorandum’ 74

6.5 Conclusions 75

7 Utilitarianism in Welfare Economics 79

7.1 Introduction 79

7.2 Utilitarianism in economics 81

7.3 What is ‘utility’? 84

7.4 Main varieties of utilitarianism 85

7.5 Preview of main criticisms of utilitarianism 87

8 Some Major Criticisms of Utilitarianism 88

8.1 Consequentialism, ‘process’ and ‘rights’ 88

8.2 ‘Special obligations’ 89

8.3 Conflicts between utilitarianism and special

obligations 91

8.4 Plural values and incommensurability 92

8.5 Incommensurability in economics 95

8.6 Utilitarianism and distributive justice 98

9 GDP and Friends 100

9.1 Limitations on the national income concept 100

9.2 Economists and the GDP—welfare link 101

9.3 Weak points in the GDP concept 102

9.4 ‘Measurable economic welfare’ 104

9.5 Other measures of ‘well-being’ 105

9.6 Human development and ‘capabilities’ 108

9.7 Is GDP a useful concept? Ill

9.8 Conclusion 112

10 Happiness 114

10.1 Incomes and‘happiness’ 114

10.2 Why income is not well correlated with

self-reported happiness 116

10.3 The definition of happiness 118

10.4 Happiness and economic policy 119

11 Why Equality? 122

11.1 The problem 122

11.2 Distributive justice in economics 123

11.3 The Rawlsian theory of justice 125

11.4 The libertarian critique of egalitarianism 131

11.5 The ‘levelling down’ criticism of egalitarianism 132

11.6 ‘Priori tarianism’ 134

11.7 Egalitarianism and ‘positional goods’ 136

11.8 Is there a ‘trade-off’ between equality and efficiency 138

12 What Equality? 140

12.1 Different concepts of equality: conflicting or complementary ? 140

12.2 Equality of welfare 141

12.3 Equality of opportunity 142

12.4 Equality of resources 144

12.5 Equality of ‘capabilities’ 146

12.6 Political conceptions of equality 148

12.7 Which economic variable? 150

13 The Boundary of Society: The Boundary in Space 154

13.1 The unit of allegiance: individuals or states? 154

13.2 The ‘political’ conception of justice and contractarianism 158

13.3 Cosmopolitanism 160

13.4 Other theories of international distributive justice 166

13.5 Conclusions 168

Annex to Chapter 13: How to share out equitably

the burden of combating climate change 173

14 The Boundary of Society: The Boundary in Time 178

14.1 Justice between generations: a new problem 178

14.2 Authority and a contractarian theory of justice 178

14.3 Justice and rights 180

14.4 Rawls and ‘just’ savings 184

14.5 Fairness and the role of initial endowments 186

14.6 Locke’s ‘proviso’ 188

14.7 The ‘non-identity problem’ and conflicting intuitions 189

14.8 Conclusion 191

15 Discounting the Future 194

15.1 The role of the discount rate in the economy 194

15.2 Why people have ‘time preference’ 195

15.3 Why not use the market rate of interest? 197

15.4 Cost—benefit analysis and Pareto optimality in the

long run 199

15.5 The social rate of discount 201

15.6 The ethics of delta: impersonal utilitarianism

and the rate of pure time preference 201

15.7 The ethics of ‘eta’: intergenerational egalitarianism 204

15.8 Whose discount rate? 206

15.9 Conclusions 206

16 Valuing Life 208

16.1 Can life be valued? The ‘heroic’ approach 208

16.2 Objections to the ‘heroic’ approach 209

16.3 The scope of the problem 212

16.4 Valuing life and the limits of cost-benefit analysis 213

16.5 The net output method 214

16.6 Measuring preferences for safety 216

16.7 The Broome critique of the ‘WTP’ approach 221

16.8 A way out of the dilemma? 223

17 Overview: Value Judgements in Welfare Economics 226

17.1 Value judgements in economic policy 226

17.2 Individual choices and their welfare 227

17.3 From individual welfare to society’s welfare 228

17.4 Distribution: the distribution of initial endowments 229

17.5 Distribution: the distribution of incomes and the

concept of ‘equality’ 230

17.6 The boundaries of the society whose welfare we

are seeking to promote? 232

17.7 The discount rate 234

17.8 Consequentialism 235

17.9 Economic ‘efficiency’ versus liberty 236

17.10 The limitations on cost-benefit analysis 236

17.11 Conclusions 238

Notes 240

Bibliography _ 253

Index of Names 263

Index of Subjects 266

List of Figures

1.1 Sustainable development: balancing fact and

value 9

3.1 Structure of economic policy choice 24

3.2 The equality—efficiency trade-off: fact or value? 29

3.3 A choice of paths to the ultimate policy goal 31

5.1 How to reconcile efficiency with social welfare 60

5.2 Economic efficiency versus strong egalitarianism 61

6.1 Summary of obstacles on the road from individuals’

preferences to society’s welfare 78

11.1 A Rawlsian social welfare function 129

12.1 Welfare: what you have and what you would like to have? 147