The Modern Series of Foreign Economics——Welfare Economics

Author: Economic Daily Press
Publisher:
Publish Date: 2005-05-01
Features: A New Welfare Economics of "Value Neutrality"? In the early 1930s, the field of welfare economics widely accepted Sir Robbins' view that, as a branch of economics and a science, welfare economics should not involve value judgments. Welfare economics should not be normative but rather empirical, or "value-neutral." Thus, the new welfare economics that emerged in this context, centered around the Pareto standard, sought to avoid the value judgments embedded in traditional Western economics. "The so-called 'new welfare economics' (1939–1950) particularly focused on deriving policy judgments from purely factual premises, which seemed to contradict the widely held philosophical view that 'it is impossible to derive 'ought' propositions from a series of 'is' propositions'" (Sen, 1970, p. 56). So, is new welfare economics truly value-neutral? Did it violate Hume's law? Sen argues that it did not. The pursuit of new welfare economics was not a denial of the aforementioned view but rather equated the absence of value judgments with the absence of interpersonal conflict. New welfare economics actually held that if everyone agreed on a value judgment, such as the Pareto standard, it would no longer be a value judgment but rather completely objective and empirical. "For this very reason, the Pareto principle has always been considered free from value judgments" (Sen, 1970, p. 57). Therefore, Sen's conclusion is: new welfare economics is not value-neutral; it still involves value judgments. Similarly, another prominent Western economic historian, Braougg, shared the same view: "All factual statements that are considered true and are based on experience rely on the consensus in society that we 'should' accept those statements that express 'is'" (Blaug, 1980; Chinese translation, 1992, p. 136). In other words, any empirical analysis is based on a certain normative analysis. Since new welfare economics is based on the normative Pareto standard, Braougg "firmly placed Pareto's welfare economics in the realm of normative economics" (Blaug, 1980; Chinese translation, 1992, p. 154). In fact, from the Pareto standard itself, it is undeniably colored with value judgments. The Pareto standard holds that if a change increases the welfare of at least one person without decreasing the welfare of anyone else, then that change is an improvement and socially desirable. Why? This is because the Pareto standard that the level of social welfare depends entirely on the individual welfare of its members. As for how to judge whether the welfare of at least one person has increased without decreasing anyone else's welfare, this is essentially the principle of individualism. Regarding individualism, we will discuss it in Chapter 5. Therefore, the Pareto standard itself is not a standard that is detached from value judgments. If people hope to apply this standard to judge the state of society, it will inevitably be futile. They will find that, in addition to the Pareto standard, they must also incorporate other value judgments.