Chapter 4: Enter the Economists
4.1 CONSEQUENTIALIST SOCIAL WELFARE THEORY The ‘economic’ approach to government ﬁnds expression in the normative application of utilitarian social welfare theory. This, in turn, is a reﬂection of the ‘relentlessly utilitarian’ nature of economic theory’s core ontology (Hahn 1982, p. 187). Utilitarianism in the hands of economists differs, however, from the philosophical tradition. In particular, whereas ‘ideal’ utilitarians generally seek a priori the ‘good’ which should be promoted, economists identify welfare or the ‘public good’ with utility (Warke 2000, p. 374). Moreover, whereas Bentham’s hedonic utilitarianism contemplated constitutional reforms intended to ensure that ‘utilitarian processes would prevail in the public arena’ (Warke 2000, p. 379), social welfare theory is institutionless. Finally, whereas utilitarianism is, perforce, a part of the corpus of moral philosophy, social welfare theory is intendedly value-free. All this notwithstanding, it remains true that utilitarianism as contemplated by most philosophers, and social welfare theory as deployed by economists are, ﬁrst and foremost, theories of pubic action (§ 3.1). 4.2 EFFICIENCY AND EQUITY Central to the social welfare theoretic enterprise is the distinction between ‘efﬁciency’ in the sense of Pareto optimality, and ‘equity’. While the former contemplates the efﬁciency or welfare frontier, the latter involves appeal to the social welfare function. While a critical appraisal of both constructs is deferred until Chapter 6, we have already encountered the social welfare function (Chapter 3). For the moment, our interest centers on the efﬁciency frontier. As is well known, the instantaneously prevailing efﬁciency frontier is determinate, given...
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