This paper shows that implicit assumptions about the numeraire good in the Kaldor-Hicks efficiency-equity analysis involve a "same-yardstick" fallacy (a fallacy pointed out by Paul Samuelson in another context). These results have negative implications for cost-benefit analysis, the wealth-maximization approach to law and economics, and other parts of applied welfare economics--as well as for the whole vision of economics based on the "production and distribution of social wealth.".

Moriarty argues that the Market Failures Approach to business ethics is inapplicable to “real world” problems, because it treats “market failure” as a failure to achieve Pareto efficiency. Depending upon how it is applied, Pareto efficiency is either trivially easy to satisfy or else so demanding that no real-world market could ever satisfy it. In this Commentary, I argue that Moriarty overstates these difficulties. The regulatory structure governing markets is best understood as an attempt to maximize the number of Pareto-improving (...) exchanges that occur. There is no reason to think business self-regulation cannot be guided by the same normative-conceptual framework. (shrink)

The standard allocative efficiency criteria used by economists (Pareto efficiency and Kaldor-Hicks efficiency) are fundamentally unable to rank a slave-labor system against a free-labor system. Given either set of initial property rights assignments the market can reach (or fail to reach) allocative efficiency (that is, allocate resources to their highest-valued uses), but welfare economics provides no meta-framework for ranking initial assignments. This finding underscores the limits to the usefulness of efficiency criteria: they cannot settle all questions, and unfortunately (...) are least decisive just where the stakes are greatest (namely, where wealth effects of alternative assignments are greatest). Explicitly ethical criteria are needed to make the ranking. Key Words: Pareto efficiency • Kaldor-Hicks efficiency • property rights • welfare economics. (shrink)

According to Joseph Heath, privatizations should be judged on a case-by-case basis with appeal to the Pareto criterion. This approach, or so I argue, amounts to a depoliticization of privatization. While Heath’s approach is effective and at times illuminating, I show that a consistent application of his methodology is self-defeating in that it eventually requires a politicization of privatization. With appeal to transaction cost theory, I show there are social costs associated with affirming the competitive pressures of the market. Subsequently, (...) I argue that while private actors may, according to Heath, pursue efficiency with appeal to an adversarial morality, state-owned enterprises (SOEs) are much more constrained in how they may achieve such gains. Due to the pressures of liberal neutrality, SOEs may chase efficiency only without setting actors back. Conversely, the private sector’s potential for success is predicated on its ability to compete for Kaldor-Hicks efficiency, which specifically allows for win-lose interactions. While SOEs are often no more able than the private sector to achieve Pareto optima, this discrepancy makes it so that SOEs produce gains that are ex-ante lower but more equal, whereas the private sector produces gains that are ex-ante higher but more unequal. Thus, the social cost of affirming the competitive pressures of the market is ex-ante inequality. If this premise is accepted, there is no way to avoid the conclusion that a consistent case-by-case approach requires a structural, political view on how privatizations affect the state’s ex-post Pareto-enhancing abilities. (shrink)

Scholars have long debated the appropriate balance between efficiency and redistribution. But recently, a wave of critics has argued not only that efficiency is less important, but that efficiency analysis itself is fundamentally flawed. Some say that efficiency is incoherent because there is no neutral baseline from which to judge inefficiency. Others say that efficiency is biased toward those best able to pay (generally, the rich). This essay contends that efficiency is not meaningfully incoherent or biased. The most widely discussed (...) forms of efficiency do not require any particular baseline, and even those that do require a baseline can still serve as useful approximations of more theoretically sound but computationally demanding measures. Moreover, arguments of bias do not account for the source of funds in public projects, produce unintuitive results, and draw an arbitrary cutoff between bias and non-bias that elides important distributional details. Ultimately, the tradeoff between efficiency and redistribution remains the most useful frame for policy debate. (shrink)

How should we make interpersonal comparisons of well-being levels and differences? One branch of welfare economics eschews such comparisons, which are seen as impossible or unknowable; normative evaluation is based upon criteria such as Pareto or Kaldor-Hicks efficiency that require no interpersonal comparability. A different branch of welfare economics, for example optimal tax theory, uses “social welfare functions” to compare social states and governmental policies. Interpersonally comparable utility numbers provide the input for SWFs. But this scholarly tradition has (...) never adequately explained the basis for these numbers. John Harsanyi, in his work on so-called “extended preferences,” advanced a fruitful idea. While an ordinary preference is a ranking of outcomes, an “extended preference” is a ranking of individual histories. To say that individual k has an extended preference for history over means something like the following: k prefers to have the attributes of individual i in outcome x, as opposed to having the attributes of individual j in outcome y. Harsanyi’s proposal was to endow individuals with “extended preferences”; to represent such preferences using “extended” utility functions; and to employ such functions, in turn, as the basis for interpersonal comparisons of well-being levels and differences. Harsanyi’s analysis, however, had various gaps and flaws. In this Article, I both diagnose these difficulties, and show how they can be remedied - yielding a viable account of interpersonal comparisons, one sufficient for the needs of the SWF approach. (shrink)

-/- This unique book develops an operational approach to preference and rationality as the author employs operators over binary relations to capture the concept of rationality. -/- A preference is a basis of individual behavior and social judgment and is mathematically regarded as a binary relation on the set of alternatives. Traditionally, an individual/social preference is assumed to satisfy completeness and transitivity. However, each of the two conditions is often considered to be too demanding; and then, weaker rationality conditions are (...) introduced by researchers. This book argues that the preference rationality conditions can be captured mathematically by “operators,” which are mappings from the set of operators to itself. This operational approach nests traditional concepts in individual/social decision theory and clarifies the underlying formal structure of preference rationality. -/- The author also applies his approach to welfare economics. The core problem of ‘new welfare economics,’ developed by Kaldor, Hicks, and Samuelson, is the rationality of social preference. In this book the author translates the social criteria proposed by those three economists into operational forms, which provide new insights into welfare economics extending beyond ‘new welfare economics.’ . (shrink)

This chapter contains sections titled: What I s Regulation? How Should We Morally Evaluate Regulation? Welfarism; the Pareto Principle; Kaldor‐Hicks Efficiency versus Social Welfare Functions The Two Fundamental Theorems of Welfare Economics and the Market Failure Framework Externalities Public Goods and Monopoly Power The Coase Theorem Information and Paternalism as Rationales for Regulation Regulatory Forms and Regulatory Choice Criteria References.

Faculty of Law and Department of Philosophy, University of Toronto 1. INTRODUCTION The economic analysis of law has gone through a remarkable change in the past decade and a half. The founding articles of the discipline – such classic pieces as Ronald Coase’s “The problem of social cost” (1960), Richard Posner’s “A theory of negligence” (1972) and Guido Calabresi and Douglas Malamed’s “Property rules, liability rules, and inalienability: One view of the cathedral” (1972) – offered economic analyses of familiar aspects (...) of the common law, seeking to explain, in particular, fundamental features of the law of tort in terms of such economic ideas as transaction costs (Coase), Kaldor-Hicks efficiency (Posner), or minimizing the sum of the accident costs and avoidance costs (Calabresi and Malamed). In each case, they argued that the law of torts should be understood as a set of liability rules selected for their incentive effects, rather than as a set of substantive rights and remedies for their violation. These authors claimed to be able to explain most of the features of tort law and, where features were found that did not fit with their preferred explanations, recommended modification. Although they disagreed on important questions,1 each of the pieces seems to work a manageable structure into what strikes first-year law students as an otherwise random morass of common-law judgments. Generations of legal academics were introduced to these works, and drawn into their way of looking at things. As a student studying first-year torts with Calabresi at Yale, I had the sense that I was in the presence of greatness. (shrink)

Cost-benefit analysis —understood as a technique for evaluating governmental policies in light of individual well-being—rests upon a preference view of welfare. A policy’s effect on a given individual is measured, on a money scale, with reference to her preferences as between money and other goods, captured in her “utility” function. This chapter describes the methodology of CBA, and discusses the various conditions on individual preferences that are required for the existence of an individual utility function, for the use of money (...) as a scale for measuring policy effects, and for a nexus between an individual’s preference-satisfaction and her well-being. The chapter then turns to the topic of interpersonal welfare comparisons. Although CBA is often defended with reference to the criterion of Kaldor-Hicks efficiency, which eschews such comparisons, a more plausible defense embraces them and sees CBA as an approximation to a social welfare function. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Reviewed by:Kantian Ethics and Economics: Autonomy, Dignity, and CharacterIvan A. BoldyrevMark D. White. Kantian Ethics and Economics: Autonomy, Dignity, and Character. Stanford, CA: Stanford University Press, 2011. Pp. xi + 270. Cloth, $55.00.This remarkable book provides a new ethical perspective for economics based on Kantian ethics of autonomy and dignity. There are two main messages in it that I find particularly important. First, Mark White derives from Kant the (...) idea of irreducible moral principles that govern the behavior of economic agents independently of welfarist and, more generally, consequentialist concerns. These principles of duty and the “incomparable worth” (21) of human dignity, as well as justice or rights, may not be economically traded off against some other motivations; hence, they simply evade economic reasoning altogether.Second, White endorses a version of libertarian Kantianism that treats people as individuals in essence (“autonomous”) and social in orientation (respecting the rights and the choices of the others). In discussing individualism, White attacks the conventional wisdom of economics and claims that preferences alone do not account for the identity of individuals [End Page 298] in space and time, although their unique characters do. Persons should be given free choice (absent in deterministic rational-choice models) and hence responsibility for their choices that incorporates the social factors in decision-making. However, White never mentions the almost insurmountable difficulties associated with fleshing out the truly individual features of a given person. Although he allows for a person’s identity and character changing over time, he does not recognize that character itself is in many respects a social construction.White criticizes paternalistic economic policies that suggest manipulating choice environments in order to follow the “true” preferences of the individuals. Instead, real consent, as satisfying both relevant preferences and principles (e.g. rights and human dignity), is, in his view, the sole criterion for justifying particular policy measures—not Pareto-efficiency or Kaldor-Hicks compensation. Economists’ obsession with efficiency leading to the misconceived notions such as “efficient level of crime” or “manageable level of terrorism” is also severely criticized.For White, the most popular formalistic version of the categorical imperative is less important than the other two—prohibiting treating other people simply as means and instituting the “Kingdom of Ends.” Formalism is reserved merely for the negative evaluation of actions and providing strict perfect duties that give clear guidance concerning what should not be done. White’s “Kantian-economic” model of decision-making incorporates perfect duties as constraints, and imperfect (positive) duties as preferences. He also stresses that for Kant, duties derived from the imperative depend on empirical knowledge, the context of decision-making, and judgment as a unique personal interpretation of the moral law. He further emphasizes the intersubjective role of Kantian morality: moral law should be universalizable to all rational persons (the “Kingdom of Ends” formula of the imperative), whereas rationality means not just following the patterns of behavior developed in the preference-oriented choice model, but rather acting on one’s beliefs and desires or choosing not to follow them, thus exhibiting genuine autonomy.The new and important contribution to the discussion is an explicit treatment of will as an inner faculty that, together with judgment, constitutes a person’s character or “self,” and helps to overcome the mere inclination to follow duty. Will is the missing link between decision and action and should be “well-trained” for bringing about true morality.The book is clearly written, and the author has upheld the interdisciplinary appeal of the topic, demonstrating an outstanding knowledge of the vast literature on ethics (both Kantian and not) and economics. White’s emphasis on the irreducibility of moral principles is absolutely relevant for current economic and political debates. However, some reservations are in order.There is an ambiguity concerning the status of his analysis. If in its positive aspect White’s recommendations for economists is to accept the Kantian vision of morality, then almost no arguments are given for this, and his modifications of the standard choice model are introduced in an ad hoc manner, just to reconcile it with the Kantian framework. Are an individual’s decisions to act on principles and to overcome mere inclinations really... (shrink)

We offer a concise introduction to the methodology of order-ethics and highlight how it connects aspects of economic theory and, in particular, game theory with traditional ethical considerations. The discussion is conducted along the lines of five basic propositions, which are used to characterize the methodological approach of order ethics.

The purpose of the paper is a discussion of the meaning and relevance of the Pareto principle in economics. To begin with, the principle is briefly retraced in Pareto’s own writings. Its contemporary meaning was, however, developed in the context of the “New Welfare Economics”. While Pareto technically employed the principle in order to describe an equilibrium situation, Kaldor and Hicks developed it somewhat differently as a yardstick for economic policy formulation. Sometimes, the principle is also discussed as (...) a decision rule, and in this context some critics - though not the present author - believe it to have a conservative bias. Finally, recent discussions center around the incompatibility of the Pareto principle and “liberal” values. This conflict might be of limited relevance, only, due to a misconstrued formalism. (shrink)

From Yorkshire schoolboy to philosopher and theologian of International renown, John Hick tells his life story in this warm and absorbing autobiography. Painting a vivid picture of Twentieth-century soceity, from 1950s America to racial tensions in England and in apartheid-era South Africa, he recounts the events that have shaped his life, including his early conversion to evangelical Christianity, his role as a conscientious objector in the Second World War, and his gradual often controversial- move towards a religious pluralism embracing all (...) the world faiths. This thoughtful reflection on the changing face of religion and insight into one man's spiritual and intellectual journey will appeal to any concerned with the great human questions, from belief in the Transcendent, to the role of faith, and the nature of death and beyond. (shrink)

John Hick is one of the most widely read and discussed living writers in modern theology and the philosophy of religion. This book offers students a one volume textbook on his thought. Extracts from his writings cover all the various themes for which Hick has become known: Faith and Knowledge, Philosophy of Religion, Evil and the God of Love, Death and Eternal Life, The Myth of God Incarnate, and Problems of Religious Pluralism. The extracts are preceded by an introductory essay (...) by Paul Badham on John Hick's philosophical theology, and on the integrity of his life and thought. (shrink)

Humean accounts of laws of nature fail to distinguish between dynamic laws and static initial conditions. But this distinction plays a central role in scientific theorizing and explanation. I motivate the claim that this distinction should matter for the Humean, and show that current views lack the resources to explain it. I then develop a regularity theory that captures this distinction. My view takes empirical accessibility to be one of the primary features of laws, and I identify features laws must (...) have to be empirically accessible. I then argue that laws with these features tend to be dynamic. _1_ The Best System _1.1_ Orthodox Humeanism _2_ The Best Is Not Good Enough _2.1_ Laws and boundary conditions _2.2_ Laws and scientific practice _2.3_ An illustrative example _3_ Laws and Epistemic Roles _3.1_ The epistemic criterion _3.2_ The epistemic role account _3.3_ Scientific virtues _3.4_ Applying the epistemic role account _4_ Conclusion. (shrink)

A fascinating collection of essays by leading scholars in the field engage with the idea of religious pluralism mooted by John Hick to offer incisive insights on religious pluralism and related themes and to address practical aspects such as interreligious spirituality and worship in a multi-faith context.

Perceptions are often merely regarded as the basic elements of knowledge. They have, however, a complex structure of their own and are far from being elementary. My paper will analyze two basic patterns of perception and some of the resulting medical implications. Most basically, all object perception is characterized by a mixture of knowledge and ignorance (Husserl). Perception essentially perceives with inner and outer horizons, brought about by the kinesthetic activity of the perceiving subject (Sartre). This first layer of perceptual (...) reality, the world of open perceptions, is the inescapable background for every rationality, every value, every existence (Merleau-Ponty). On an epistemological level a characteristic change of perceptual patterns in medicine was introduced by pathological anatomy (Foucault). The reference of medical perception to the dead body created the new possibility of absolute perception, allowing for more precise medical interventions, but at the same time coming into conflict with the open structures of ordinary, non-scientific perception patterns in everyday life. On the basis of these distinctions, an analysis of the different perceptual patterns in medicine becomes possible. Such an analysis would be the task of a sub-field in medical philosophy that could be called medical aesthetics having as its goal an art of perception understood as a technique of adequately applying different perceptual patterns in medical practice. (shrink)

Around the world, unhealthy diets are a leading cause of disease. Shifting population diets in a healthier direction will require downstream policy interventions. This means changing the composition of the processed food supply, particularly reducing salt, sugar and fat. Mandatory nutrient limits imposed by government are one way of achieving this. However, they have been criticized as a particularly intrusive regulatory option, interfering with both free markets and free choices. At the same time, voluntary industry reformulation has become an intervention (...) favoured by national governments, the World Health Organization and the food industry. This article uses a comparison of the two interventions—which share a common public health goal, albeit achieved through different regulatory means—as a basis to evaluate the ethical charges against mandatory nutrient limits. It makes three main findings: that both affect free dietary choice in very similar ways; that dominant public health ethics frameworks are not well equipped to compare mandatory and voluntary forms of regulation; and that food governance is inherently multisectoral, involving markets, governments and the public. Taking these findings into account, the article calls for a more nuanced ethical evaluation of food reformulation policies. (shrink)

These lectures contain a masterful summing-up of Nicholas Kaldor's critique of the foundations of mainstream economic theory. They provide a clear account of his theoretical structures on regional differences, primary producers and manufacturers, and on differing market structures and the likely course of prices and quantities in different markets over time. The first four lectures are concerned with theory, history and explanation; the fifth consists of a detailed set of integrated policy proposals. The book is rounded off with a (...) brilliant biographical essay by Tony Thirlwall. (shrink)

Humeans are often accused of positing laws which fail to explain or are involved in explanatory circularity. Here, I will argue that these arguments are confused, but not because of anything to do with Humeanism: rather, they rest on false assumptions about causal explanation. I’ll show how these arguments can be neatly sidestepped if one takes on two plausible commitments which are motivated independently of Humeanism: first, that laws don’t directly feature in scientific explanation and second, the view that explanation (...) is contrastive. After outlining and motivating these views, I show how they bear on explanation-based arguments against Humeanism. (shrink)

Orthodoxy has it that only metaphysically elite properties can be invoked in scientifically elite laws. We argue that this claim does not fit scientific practice. An examination of candidate scientifically elite laws like Newton’s F = ma reveals properties invoked that are irreversibly defined and thus metaphysically non-elite by the lights of the surrounding theory: Newtonian acceleration is irreversibly defined as the second derivative of position, and Newtonian resultant force is irreversibly defined as the sum of the component forces. We (...) think that scientists are happy to invoke metaphysically non-elite properties in scientifically elite laws for reasons of convenience, such as to simplify the equations and to make them more modular. On this basis, we draw a deflationary moral about laws themselves, as being merely convenient summaries. 1 Introduction2 Orthodoxy2.1 Orthodoxy stated2.2 Orthodoxy explained2.3 A worrisome commitment: Term objectivism3 The Loose View3.1 The argument from practice3.2 Finding the scientifically elite equations3.3 Diagnosing the metaphysically non-elite properties3.4 Situating our challenge4 Newtonian Mechanics4.1 Newtonian acceleration4.2 Newtonian resultant force4.3 A metaphysical discovery?5 Objections5.1 Metaphysically elite after all?5.2 Scientifically non-elite after all?5.3 But our world is not Newtonian!6 Consequences6.1 Consequences for the motivations for link6.2 Consequences for metaphysically elite properties6.3 Consequences for lawhood. (shrink)

The Lancet–O’Neill Institute/Georgetown University Commission on Global Health and Law published its report on the Legal Determinants of Health in 2019. The term ‘legal determinants of health’ draws attention to the power of law to influence upstream social and economic influences on population health. In this article, we introduce the Commission, including its background and rationale, set out its methodology, summarize its key findings and recommendations and reflect on its impact since publication. We also look to the future, making suggestions (...) as to how the global health community can make the best use of the Commission’s momentum in relation to using law and legal tools to advance population health. (shrink)

This article examines inequality from a framework of justice that attends to the socially situated nature of market activity, including exchange. I argue that accounts of unsituated exchange—accounts of market exchange that abstract from social situations, such as philosopher Robert Nozick’s influential libertarian account of justice—overlook various factors that contribute to growing economic inequality in contemporary society. Analyses of market exchange must incorporate the role of “third parties” who play a role in shaping and/or who are affected by economic transactions. (...) The involvement of these additional parties, including the government and future generations, is not interference but, instead, an integral part of the economic and moral accounting of exchange. An approach to justice and inequality which embeds exchange within multiple dimensions of economy and society is needed; the latter part of this article traces such a socially situated approach. (shrink)

This year we have been celebrating our centenary, and, when so much has been said, and justly said, of the contributions to various branches of science and learning that have emanated from University College, it seems fitting that the part which the College has played in the advancement of philosophical research should not be left out of account. For in spite of the manifold difficulties that stood in the way of instituting a school of philosophical study in London, what has (...) been achieved here, both in the way of original investigation and of effective teaching, constitutes a record of which we may well be proud. (shrink)

In this critical review essay, we examine Rüdiger Safranski’s “philosophical biography” approach to interpreting Nietzsche. We analyze Safranski’s various attempts tobring the biographical facts of Nietzsche’s life to bear on the philosophical narration in order to shed light on the development of Nietzsche’s philosophical thinking. We argue that there are a number of limitations to Safranski’s “philosophical biography” approach to reading Nietzsche, such as Safranski’s tendency to focus almost exclusively on the earlier stages in the development of Nietzsche’s philosophical thinking. (...) However, we also try to show that the one redeeming virtue of Safranski’s book is that it focuses on the intriguing, but often overlooked, concept of “self-configuration” or “selffashioning”, and it treats this concept as a unifying thread that runs throughout the maze of Nietzsche’s various multifarious writings. We argue, in conclusion, that Safranski successfully connects Nietzsche’s “highly personal philosophy” to the multifaceted “maneuvers of self-configuration” and to the overall Nietzschean project of “fashioning one’s own identity” in an otherwise meaningless world. (shrink)