The failure of New Welfare Economics to insulate itself from ethics: on the need for standards permitting interpersonal comparison Conference Paper uri icon


  • This paper examines the paradigm shift of the 1930s onwards, premised on avoiding recourse to interpersonal comparisons of utility (ICUs). I consider, first, the reasons why the New Welfare Economics of the 1930s, following the philosophical doctrine of logical positivism, came to reject ICUs for compromising scientific objectivity. Second, I outline the strategies deployed to avoid ICUs (including a behaviourist account of human disposition, ordinalism, potential Pareto improvement, and the delegation to politics of distributive decisions about initial endowments). I then argue that such strategies fail to insulate economics from the “subjectivity” of ethical judgment, noting that economics appears unable to avoid the ethical judgments that permit interpersonal comparison. In closing, I suggest that economics must squarely face the difficult question of how to deal with the inevitability of “subjective” standards for interpersonal comparison.

publication date

  • December 2014