The News of the Death of Welfare Economics is Greatly Exaggerated

M. Fleurbaey, P. MONGIN

Social Choice and Welfare

2005, vol. 25, pp.381-418

Departments: Economics & Decision Sciences, GREGHEC (CNRS)

The paper reexamines the controversy about Bergson-Samuelson social welfare functions(BSFs) that took place between welfare economists and social choice theorists as a consequenceof Arrow's (1951) impossibility theorem. The 1970's witnessed a new version of the theorem thatwas meant to establish that BSFs 'make interpersonal comparisons of utility or are dictatorial'.Against this, Samuelson reasserted the existence of well-behaved 'ordinalist' BSFs and generallydenied the relevance of Arrovian impossibilities to welfare economics. The paper formalizesand reassesses each camp's arguments. While being also critical of Samuelson's, it eventuallyendorses his conclusion that welfare economics was left untouched by the controversy. It drawssome connections of BSFs with contemporary normative economics