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Edited by John B. Davis and Wilfred Dolfsma
Chapter 9: Capabilities and Well-being
Irene van Staveren Introduction The capability approach (CA) was initiated and guided by Amartya Sen, since the 1980s, as an alternative to neoclassical welfare economics. The approach emerged gradually out of his rich critique of mainstream economics, in particular his dissatisfaction with conventional notions of rationality (e.g. in ‘Rational fools’, 1977), eﬃciency (e.g. in ‘The impossibility of a Paretian liberal’, 1970), utility (e.g. in On Ethics and Economics, 1987), and well-being (e.g. in Development as Freedom, 1999). Arising out of this critique, the CA can be characterized as an alternative approach to the analysis of poverty and well-being, one that has tried to ﬁnd a middle ground between purely subjective theories of well-being on the one hand, such as the preference-based neoclassical paradigm, and, on the other hand, purely objective theories focusing on goods or, a bit less objective, needs. In the CA, it is people’s capabilities to function that is the central focus of well-being analysis, in other words, what people are able to be or do, rather than what they have in terms of income or commodities. This chapter will show that, methodologically, the CA diﬀers from neoclassical economics in some important ways. Most basically, the CA replaces utility with capabilities as the relevant informational space for analysis, and it substitutes a conception of rationality as utility maximization with the notion that people choose ‘what they have reason to value’ in order to lead a ﬂourishing life. Hence the whole utilitarian basis of neoclassical analysis is...
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