Cropsey - What is Welfare Economics

8/12/2019 Cropsey - What is Welfare Economics

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What is Welfare Economics?Author(s): Joseph CropseyReviewed work(s):Source: Ethics, Vol. 65, No. 2 (Jan., 1955), pp. 116-125Published by: The University of Chicago PressStable URL: http://www.jstor.org/stable/2378702 .Accessed: 31/08/2012 12:05

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WHAT IS WELFARE ECONOMICS?

JOSEPH CROPSEY

ONTEMPORARY welfare economicshas drawn so heavily upon math-ematics, psychology, and moral

and political science that it can scarcelybe understood without reference to theextra-economic premises and proceduresto which it has bound itself. The purposeof this paper is to inquire into the mean-ing of the levy that economics has madeupon the other disciplines, to try to statethe characteristics of present-day welfareeconomics as the common terminus ofthree convergent lines of development-a mathematical, a psychological, and amoral-political.

What is the nature of the contributionmade by mathematics to welfare eco-nomics? Most generally, mathematicsprovides welfare economics with an ap-proach to the problem of heterogeneousassortments. That approach both im-plies and presupposes a theory of the na-tures of things and a theory of specula-tion concerning the natures of things.Let us consider briefly the wider meaningof the penetration of welfare economicsby mathematics.

Professor Samuelson has shown the in-dispensability to welfare economics ofcertain value assumptions, of which Itake two to be pre-eminently important:First, that individuals' preferences areto 'count'. And second, that more ofany one output, other commodities or

services being constant, is desirable;similarly, less input for the same outputsis desirable. ' Together, these imply

(a) that the state of welfare of a popula-tion is the composite level of gratificationof all the idiosyncratic preferences of allthe individuals in the group; and(b) that that level of gratification is af-fected by the relation between inputs andoutputs. So far, the problem of welfareeconomics is one in the manipulation ofheterogeneous assortments: how to makemeaningful statements about a hetero-geneity of men with their preferencesconfronting a heterogeneous output; andabout that same congeries of outputs injuxtaposition to another congeries calledinputs. What is necessary is a deviceadapted to the summary treatment ofgalaxies of micro-entities. Such a device

is mathematical analysis, which can em-brace as many individuals, and as manycharacteristics of as many individuals, asthere are symbols; and the number ofsymbols is as large as the number ofnumbers.

To each individual, and to each rele-vant characteristic of each individual, asymbol is assigned. Equations must thenbe written in a number which dependsupon the number of individuals in theassortment, for each individual, on beingassigned a symbol, becomes a variable ofthe problem. Then a solution of the fun-damental equation may be found, theprinciple of which will be this: no fewervariables in the solution than there areindividuals in the original heterogeneity.Evidently, the act of mathematical ag-

gregation is not also an act of classifica-tion, for the separate identity of each ofthe heterogeneous individuals is and

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WHAT IS WELFARE ECONOMICS? 117

must be preserved intact down into theconclusion of reasoning.

Thus the fundamental objects of dis-cussion of (mathematical) welfare eco-

nomics are not formed into classes butbecome the subjects of conclusions onlyas discrete individuals. It is thereforeonly in a manner of speaking that mathe-matics solves the problem of heterogenei-ty. Mathematical aggregation, in so far asit is also disintegrative of establishedclasses, transcends methodology and en-ters directly into the substance of welfareeconomics in a problematic way.

What it implies is nothing less than a-reconstruction of the two prime cate-gories, man and goods. The reconstruc-tion would individualize the species ofman (i.e., reduce the species to, and re-place it by, its individuals) and general-ize the species of goods (i.e., dissolve thespecies of goods and replace them direct-ly by their genus).

What are the grounds for this recon-struction and what precisely does itmean? It means, most generally, the re-jection of the traditional taxonomybased upon the idea of the naturalness-hence irreducibility-of the species.

Man is not a workable concept; onlymen ) are intelligible. The facts of hu-

manity must be drawn out by the sum-mation of idiosyncrasies, not by ab-straction from idiosyncrasies. Classifica-tion is replaced by aggregation, and thespecies are replaced by heterogeneities.As for commodities, the specific differ-ences among them too are obscured bytheir reduction to the plane of undifferen-tiated utility: not as shoes and apples butas sources of general utility are theymade the subjects of theory.

What the mathematical reconstruc-tion of the prime categories implies is notonly a principle of taxonomy but neces-sarily, therefore, also a principle of defini-

tion, for each thing must be defined byreference to the class to which it belongs.The replacement of species by hetero-geneities, i.e., of classes by individuals,renders the individual radically sui gene-ris. He must be defined in terms of whatdifferentiates him from others, not whatlikens him to others. This necessity fallsupon welfare economics not in the area ofmen and goods, which the discipline doesnot attempt to define, but in the area ofthe definition of welfare itself, into whichin one way or another the discipline does

enter. We must consider two aspects ofthe definition of welfare, one mathemati-cal and the other cast in the form, Wel-fare is a state of consciousness. The lat-ter will be discussed below; let us speakonly of the former at this point.

The mathematical characterization ofwelfare takes the form of a functional ex-pression: the welfare of a group is somefunction of an indefinite number of vari-

ables (written W = W [a, b, c, . . ]), thesymbols representing all the factors that(1) may be expressed as quantities and(2) have an effect on the economic wel-fare of the group. Saying that welfare is afunction of a, b, c, and so on, is a way ofsaying, at least in part, what welfare is.This way of saying what welfare is, is it-self composed of parts: (1) welfare is a

function;and

(2) welfare is a function ofa, b, c, and so on. To say that welfare is afunction implies that welfare must beknown by reference to what affects itsamount, quantity, or size. But if welfareis a quality of a man, or of a population,or if it cannot for any other reason bereduced to quantities, the functional ap-proach to the characterization of welfarewould be at least misleading. Yet it is

seized upon because it is an attractivealternative to the substantive definitionof welfare with specific predicates. Tosay that welfare is a function of (is some-


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118 ETHICS

how related to the magnitudes of) a, b,and c is to say, of course, that a, b, and cmust be replaced by nonsymbolic termsin any actual situation. By which non-

symbolic terms? This is the question thatthe mathematical characterizer of wel-fare is absolved from answering. He needonly affirm the law of change in theamount of welfare regardless of whatmay be thought by this or that observerto bear upon it.

The virtue of such an approach to wel-fare is that it accords so well with the re-placement of the human species by thehuman individual. The essential charac-teristic of individuals is their individuali-ty. They differ infinitely as evaluators ofwelfare-as experiencers of it and henceas theorizers concerning it. Let everyonemean by a, b, and c whatever he sees fitto mean-de gustibus non disputacndum.What is good for men is decided by theirpreferences, not by their specific natures

-the inevitable by-product of the sub-version of the species.

So far we have considered substantiveimplications of the incursion of mathe-matics into welfare economics. Does notmathematics have a right to be judgedsolely as an organon or method of purereasoning? To a certain extent, the fore-going discussion implies that the mathe-matical method, like every method, hasa supra-methodical meaning; every logicpresupposes a metaphysic. This is emi-nently true of mathematics as a methodof inquiry in welfare economics. To theextent to which mathematics makes itpossible to discuss welfare economics nomatter what welfare is, and thus necessari-ly by reference to the law of change in theamount of welfare rather than to its for-

mal character, the employment of mathe-matics has this meaning: the truth aboutwelfare is not embodied in substantivestatements about welfare, which are con-

clusions deduced from true substantivepremises; the premises must always re-main symbolic. Moreover, mathe-matical truth is indistinguishable from

internal consistency in the process of rea-soning: truth is the structure of thesyllogism, not the verity of the proposi-tion. What, then, becomes of the truthabout economic welfare? The mathe-matical method implies that truth re-sides in principle in the process of reason-ing about the process of change. In so faras the application of mathematical analy-sis to welfare economics either relies uponor itself creates the presumption that(1) knowledge of the flux of a thing ispossible in the absence of knowledge ofthe nature of the thing; and (2) thattruth resides in the process of reasoningrather than in the premises and conclu-sions as affirmations-to that extent thevalidity of the mathematical approach towelfare economics is problematical in

value.II

Professor Pigou has affirmed,2 andwelfare economists generally have notdenied, that the elements of welfare arestates of consciousness. This assertionraises two problems which are best de-scribed as psychological: First, in which ofthe states of consciousness is welfare in-cluded? Second, in what sense is it truethat welfare consists of states of con-sciousness? Let us examine these in turn.

A. The distribution of man's psychiclife between the conscious and the non-conscious continues to pose grave prob-lems. In the presence of these, it is notlikely that any categorization of thestates of consciousness itself would gain

unanimous approval. For the presentpurpose I shall use the safely extensiveconstruction of consciousness that com-prehends all of feeling and cognition, em-


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ploying the term to include emotion orpassion, imagination, memory, opinion,and knowledge. (Let us omit sense-per-ceptions by stipulating that welfare, as an

abstraction, cannot be a mere sensa-tion, e.g., a sight, a sound, or a smell.)Of which of these is welfare composed?

Is feeling, emotion, or passion a stateof the consciousness to which welfaremight in principle belong? If so, a man'swelfare would consist of his feeling ofwell-being. The problem then would beto identify the feeling or emotion of well-being. Actually there is none such. Thereare feelings of pity, anger, fear, and hun-ger, and of pleasure or gratification aris-ing from many sources, but scarcely sucha thing as the emotion of welfare. In oth-er words, if welfare is to be reduced to a

feeling, it must be reduced to the un-differentiated feeling of pleasure fromwhatever source-and obviously thereare many sources. This is unabashed

hedonism. It is not probable that econo-mists wish to be understood as meaningthat a man is well off has welfare,whenever he experiences pleasure and invirtue of that experience.

We need not here rehearse the rebut-tals of raw hedonism that have accumu-lated in a score of centuries. For our pres-ent purposes it suffices to point out thatif welfare is an emotive state of con-sciousness, and if the consciousness canbe in only one state or condition at atime, then the thinking man as thinking(i.e., as nonfeeling) cannot be possessedof welfare. There is no reason to takesuch a view of things seriously.

Is it possible that welfare partakes ofimagination or of memory, i.e., of con-sciousness of what does not now, and pos-

sibly will never, correspond with reality?Is a man happy when he recalls his pasthappiness or dreams his dream of a situa-tion in which he supposes he might be

happy? The recollection of welfare s notwelfare; neither is the recollection of awelfare-giving situation welfare. Surelythe phantasm of welfare or of a welfare-giving situation is not itself welfare. If itwere, we should have to look differentlyon the sale of narcotic drugs.

Then what of the opinionative state ofconsciousness? f welfare were to belongto opinion, men might believe themselveshappy without actually being so, for any-thing subject to opinion is subject towrong opinion. This is intrinsic to thenature of opinion and leads to the follow-ing contradiction: a man might opinehimself happy, yet do so wrongly. Thenhe would be happy because he so opinedhimself, yet he would not be happy be-cause he wrongly so opined himself. Thecontradiction flows from the premisesthat welfare is the opinionative state ofconsciousness, and that opinion differsfrom knowledge (i.e., opinion may be

right or wrong). The latter is scarcelyquestionable; t is the former which mustbe rejected as leading to an absurdity.

We have excluded as the possible ele-ments of welfare all but one of the statesof consciousness with which we began.Does welfare coincide with the remainingone, noetic awareness, knowledge, orthought simply? To say so would implythat a man's happiness consists in know-ing himself to be happy-which cannotbe true without qualification: He cannotknow himself to be happy unless there isa happiness or welfare waiting to beknown prior to his apprehension of it.The object of knowledge must at least insome sense antedate the knowledge it-self. Yet surely it is true that the manwho knows he has welfare truly has it,

and his knowing t is indispensable o hisfully having it. Does this mean that hiswelfare consists of a cognitive state ofconsciousness? Rather than that, it


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120 ETHICS

means that his welfare is completed byan act of cognition, but that the object ofcognition, as indispensable to the act, isindispensable to his welfare.

B. Thus we are led to consider the sec-ond question proposed above, namely, inwhat sense is it true that welfare consistsof states of consciousness. We may nowsay that consciousness necessarily im-plies an object of consciousness, a thingof which the conscious being is conscious.In our context that object must itself beeither welfare or nonwelfare. If welfare

consists of a consciousness of nonwelfare,welfare is reduced either to pleasure, areduction which is untenable, or to thedenial of welfare, as we saw when we con-sidered opinion, memory, and imagina-tion above. (Sense-perception as a formof consciousness would come under thisprecept too.) If welfare consists of a con-sciousness of welfare, then the very say-ing of the words proves that there is an

objective aspect of welfare which is asmuch an element of man's well-being asis his consciousness of it. In brief, welfareis as much a state of being as it is a stateof consciousness.

Only by ignoring this have welfareeconomists been able to discuss welfare

whatever it is, i.e., without referenceto its objective conditions. Since welfareis actualized, realized, or completed by anact of knowing, or an apprehension ofreality, an intelligible reality must standas the material potentiality of welfare. Itis hard to understand how a science ofwelfare can abstain from recognizing theexistence of welfare itself, but so, itseems, modern welfare economics doeswhen directly or by inference it proceedsas if welfare were all in the mind.

Whatever is all in the mind is no-where but in the mind-it is not part ofthe world of evident things. Each mustbe for himself the final judge and arbiter

of whatever is radically inevident. Ofsuch arbitration and judgment there canbe no dispute; the individual is unassail-able in his sovereignty. Sui generis, he

cannot be classified. He can only beaggregated.

TTT

Present-day welfare economics has acrucial political characteristic whichemerges pointedly in the fact that manyof the discipline's most important con-clusions of present-day welfare economicscan be stated exhaustively without refer-ence to the institutional framework orregime that would serve to contain them.Those conclusions take the form of

purely economic welfare conditionswhich, as purely economic, are supra-political, transcending polity and henceindependent of polity in being equallybinding upon all polities. Something sim-ilar to this seems to be present in the

ideas of Professor A. P. Lerner when hewrites that liberalism and socialism canbe reconciled in welfare economics. ITbe-lieve that Professor Lerner's thesis mightbe taken to mean that there are technicalconditions of economic welfare which arerelated to political things as ends are re-lated to means, surely not in any sense asmeans are related to ends. The technicalconditions of welfare being once defined,liberalism, collectivism, or any efficientcombination of the two may be employedto realize those conditions. Liberalismand collectivism may be expected to dif-fer in eligibility for such employmentonly on grounds of efficiency, i.e., adapt-ability to the economic objective. Con-versely, the economic objectives of a lib-eral and a collectivized society are indis-

criminately the equalization of marginalsocial benefit and marginal social cost.4Only the mechanics of procuring theequality differ under the two orders.5 Mr.


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1. M. D. Little affirms this in saying,We may now sum up our discussion of

the political implications of pure staticwelfare theory. We do not believe it canbe reasonably and honestly used in de-fence of, or against, any particular politi-cal system. 6 Professor Samuelson's wayof putting this is by saying, the auxilia-ry constraints imposed upon the vari-ables are not themselves the proper sub-ject matter of welfare economics butmust be taken as given, 7 meaning by

the auxiliary constraints imposed upon

the variables such things as the politicalframework of society as it limits men'sbehavior in all senses.

This conception of the radical identityin aim of liberal and collectivized societyis characteristic of those whose evalua-tion of collectivism and liberalism con-sists in inquiring how nearly they attainthe same (economic) objective. For ex-ample, Barone finds that output, andhence presumably welfare, is maximizedwhen costs are minimized and priceequals cost. In his famous article on theMinistry of Production, he can be con-strued as concluding that collectivism isdefective because collectivist plannerscannot know certain technical variablesexcept through empirical means-i.e.,by, for all practical purposes, reproduc-

ing the essentially unplanable market.8Whatever else it means, Barone's con-clusion means that the economic processis intransigent to differences of orchanges in political institutions-everyeconomy has the same formal end asevery other-largely because the eco-nomic process is bound to technologicalconditions and to irreducible individualtastes. Economy, in other words, is

supra-political or perhaps infra-politicalin that its requirements and conditionsare entirely unresponsive to differences oftime, place, and polity.9 Putting this

somewhat differently, Barone's conclu-sion may be taken to mean that one candiscuss the best economy without refer-ence to the best polity.10 All polities haveas their economic end the maximumgratification of desires with the minimumexpenditure of effort. To understand theconditions under which satisfaction ismaximized and effort minimized, it isnecessary to solve an essentially mathe-matical problem-the comparison of therates of change of two congeries.

The maximization objective is extra-

political. It is, in other words, universal-equally ruling under freedom and tyran-ny, kingship, aristocracy, or democracy,barbarism and civilization. It is not sub-ject to discretion any more than the prin-ciple of gravitation is subject to discre-tion. Its force proceeds from the irresist-ible power of the human phenomenafrom which it is derived: the primitivedesires of mankind for pleasure and their

aversion to pain and effort. It is irresist-ible because it is extra-rational or de-pendent upon the ubiquitous desires; andit is extra-political because it is universalin virtue of its being extra-rational. Thefull separation of polity and economy re-quired the full separation of economyand reason, or the union of economy andpassion in the radical sense.

The influenceof

this outlook upon wel-fare economics stands forth when we com-pare the present-day science with theform of it that existed, for example, inthe writings of Adam Smith. No one willneed to be convinced that Smith at-tached importance to the growth ofwealth and to its widespread distribu-tion. Yet in full appreciation of the con-tributions to output that could be made

by the elaboration of the division of la-bor, Smith drew attention to the unde-sirable effects of industrialization uponthe habits and mentality of the popu-


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lace.11 Equally cognizant of economic as-pects of inequality in the distribution ofwealth, neither he nor others of his agewould have considered a discussion of

this matter to be useful if it ignored therelation between inequality of wealth andwhat they called subordination in thepolitical sense. Many similar examplescould be given. In general, those earlywriters whom we think of as the politicaleconomists realized that the social ap-paratus designed to procure fulfilment of''purely economic welfare conditions

cannot fail at the same timeto

producethe most profound noneconomic conse-quences; and that those consequencescannot be omitted from the account ex-cept artificially and at the peril of arriv-ing at conclusions which are useless orworse than useless. Hence an importantdifference arises between contemporarywelfare economics and its predecessor sci-ence: When authors like Adam Smith ad-

vocated policies and institutions thatpromoted production and accumulation,they did so because the wealth-giving in-stitutions had salutary noneconomic con-sequences of the highest importance.'2Perhaps the last ones who took seriouslythe relation of economics to the wholewere those proto-economists who ante-dated economics.

We might summarize this much of theargument by saying that, its explicitacknowledgments in the direction of non-economic welfare notwithstanding, con-temporary welfare economics, lackingthe breadth of view that the science tra-ditionally possessed, blinds itself to thelargest bearing, which is the political ormoral bearing, of institutions designed toimplement the seemingly innocuous and

incontrovertible maximization principle.In one way or another contemporarywelfare economics has substituted theeconomy for the polity, or put the econo-

my before the polity for the reason thatrequires the end always to be put beforethe means. The substitution of the eco-nomic for the politic, i.e., of the part for

the whole, is a movement with deep andremote origins, into which it is here im-possible to enter. We can, however, con-sider a brief and simple illustration of theeffect that this movement has had uponthe present constitution of welfare eco-nomics.

Present-day welfare economists regu-larly discuss the problem of the distribu-tion

ofthe national income. Not uncom-

monly, they refer to it as a moral andpolitical problem-as somehow bound upwith the problem of justice. Yet I believethat there does not exist in modern wel-fare economics a description of optimaldistribution conditions based upon a rea-soned conception of justice. The issue haseluded discussion in a variety of ways, ofwhich perhaps the most interesting is the

way reflected in the writing of somemathematical economists. Professor Sam-uelson's position among mathematicaleconomists is such that one who seeksan example is not unjustified in turningto his works. I therefore recur to hisFoundations of Economic Analysis. There,he infers the following interpersonal op-timal conditions ; first, the marginalsocial utility (disutility) of the same good(service) must be equal for each individu-al; second, each factor of productionmust be divided among different possibleuses so that its indirect, derived marginalsocial utility must be the same in everyuse and equal to its marginal social dis-utility. '3 One might comment on thispassage either at great length or verybriefly. Very briefly, without a precise

understanding of marginal social utilityand disutility, i.e., of how much of whatis good for whom, or justice, the state-ment is quite void of meaning. By itself,


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it tells us no more than that where thereis too much, something should be sub-tracted, and where there is too little,something should be added. That super-

fluity and insufficiency are destructive ofwelfare, of satisfaction, and of justice isnot matter of dispute; it never was. Wedo not require higher mathematics totell us that privation should be succoredout of redundancy. What we require is tobe told the nature of superfluity and ofinsufficiency, and to be instructed so thatwe may know when abundance and pri-vation are salutary and deserved, wheninsalubrious and unjust and needful ofrectification. The answers to these ques-tions cannot be produced cybernetically,i.e., by inserting data into a formula or aformula-solving mechanism. The formulaand the mechanism are nothing but em-bodiments of our notions, devices whichcan save time but can never save thoughtconcerning the principles of things. Pro-

fessor Samuelson's formulation inferen-tially defines the optimum as an equali-ty, albeit equality of marginal socialutilities for every individual. Whatmeaning can this have? Does it meansimply that if some are hungry whileothers are not, one possibility is to feedthe hungry from the food of the pros-perous? Or must we not inquire whetherthe hungry are so because they are de-praved or indolent or unfortunate or ex-ploited or gluttonous; and the rich be-cause they are parsimonious, lucky,blessed, or unscrupulous? Moreover, isall poverty poverty, or is some of itausterity? Where does satisfaction be-come satiation? Wealth is the conditionof satisfaction, but it also conveys powerand responsibility. Who is fit to have

how much of each? And how should weconstrue equality of marginal social utili-ties of goods for all persons? Is it to betaken before or after their education in

the good things of life? And of whatvalue is the principle before we know thedistinction between the good and the badthings of life? We shall never know the

answers to these questions from mathe-matical welfare economics as mathe-matical. These questions are alleged to beproblems for someone else. Perhapsthey are. If so, the case for mathematical,indeed for all nonaxiological welfare eco-nomics, becomes, I believe, weaker, notstronger. For until these questions areanswered, mathematical welfare econom-ics is pumping in a vacuum. After theyare solved, the important work is over.But mathematics can have no hand intheir solution. Then what is the functionof mathematics in welfare economics?

Professor Samuelson's principle is thatwelfare economics may make moral as-sumptions but does not deduce appropri-ate beliefs, i.e., moral conclusions. Thatis to say, the conclusions of (mathemati-

cal) welfare economics are as adaptableto unjust as to just decisions for the com-munity: they are neutral with respect tojustice. To which we must subjoin ourconviction that mathematical welfareeconomics has by this very token broughtforth a sterile progeny.

CONCLUSION

Our aim has been to say what welfareeconomics is, and to do so especially byreference to the convergent mathemati-cal, psychological, and moral-politicalcharacteristics of the contemporary sci-ence. It now remains to summarize themanner and the meaning of that con-vergence. This may be done most concise-ly in terms of the answers to the question,What is welfare? implicit in or presup-

posed by the mathematical, psychologi-cal, and moral-political elements of con-temporary welfare economics. Mathe-matically, welfare is conceived as an ag-


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gregate of the preferences of an unclassi-fied human heterogeneity vis-A-vis an un-classified heterogeneity of goods andservices. The mathematical characteriza-

tion of welfare rests upon a far-reachingassumption as to the role and meaning ofspecies or natural differences amongclasses of things. In effect it denies thosenatural specific differences, replacingthem by genera each of which is a spec-trum of irreducible individuals. But gen-era not composed of species ought to becalled aggregations, or perhaps assort-ments. The mathematical view of welfareflows from a rearrangement of naturalthings which is as much a de-ordering asa re-ordering.

Psychologically, welfare is conceivedto be exclusively a state of consciousnessand not at all an object of consciousness.Therefore it cannot be reduced to evi-dence, and hence it cannot be the subjectof argument, reason, or conviction. As a

complete subjectivism, each man'swelfare is what he takes it to be. He can-not be mistaken. Yet we saw that thevery idea of consciousness implies that hemay well be mistaken, for the conscious-ness of rational men is not of nonexistentthings; and of existent things there mustbe evidence.

Morally, welfare or the good is againconceived as, for every man, unique. The

political consequence of this idea is thatthe maximum satisfaction of preferencestakes precedence over the maximum sat-isfaction of the requirements of justice asthe norm of the common good. The prac-tically decisive differences between poli-ties are subordinated to their commoneconomic property: they must all serveto gratify in the highest degree the ar-

bitrary preferences ofirreducible in-

dividuals.The point upon which the psychologi-

cal, moral, and mathematical qualities ofwelfare economics converge is the axiom

of the irreducibility of the individual andhence the sovereignty of his passions.The short title of this idea is Individual-ism. It is conceived of as the bulwark of

Human Dignity: what dignifies man'sestate is the importance of each man as aunique phenomenon. I believe that themere statement of this idea suggests itsdubiousness. The dignity of human be-ings proceeds from their common relationto nonhuman things at least as much asfrom their relations to each other. Theirdignity is the attribute of their commonnature, of what they possess jointly, notseverally, and it inheres in what elevatesthem above nonhumanity rather than inwhat merely distinguishes them fromeach other. If this is so, the entire struc-ture of modern welfare economics restsupon a sandy foundation. It would needreconstruction upon a plan the profound-est characteristic of which would be theaffirmation of a human nature that tran-

scends the feelings of individuals as such.That the transcendence of feelings is nota manifest impossibility or, worse, anoutrage against conscience is proved bythe importance which by universal con-sent is still attached to the concept ofduty-something that transcends, ig-nores, and commonly overrides the feel-ings of individuals as such.

The extent of the truth in all the fore-going measures the extent to which,paradoxically, welfare economics has notyet begun to be: it measures the distanceof the contemporary from the real. Ofone thing we may be certain: the exist-ence of welfare economics is no moreproved by the presence of welfare econo-mists than was the existence of medicalscience proved, in the second century, bythe presence of physicians. It is not un-imaginable that our science lies as muchbefore us as theirs lay before them.

CITY COLLEGE OF NEW YORK


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NOTES

1. Foundations of Economic Analysis (Cam-bridge: Harvard University Press, 1947), p. 223.

2. The Economicsof Welfare (4th ed.; London:

Macmillan, 1932), p. 10.3. The Economics of Control (New York: Mac-

millan, 1944), p. 4.4. Ibid., p. 77.5. But social cost and social benefit may be

expected to have very different meanings in aliberal and a collectivist society, so that the reduc-tion of the welfare conditions to equality of marginalsocial benefit and marginal social cost becomes prac-tically of little help. The question which is crucialfor welfare would still remain: By what scale ofvalues would cost and benefit be assigned to goods

and services in a collectivist and a liberal society,and what supra-economic ends would be sought andachieved through such assignments of cost andbenefit? Of what use is the equation while we donot know how cost and benefit would be distributedbetween accumulation and consumption, varietyand uniformity, industrialism and agrarianism,militarization and civilianism, to suggest but afew of the likely problems.

6. A Critique of Welfare Economics (Oxford:Clarendon Press, 1950), p. 266.

7. Foundations of Economic Analysis, pp. 221-22.8. E. Barone, The Ministry of Production in the

Collectivist State in Collectivist Economic Planning,ed. F. A. Hayek (London: G. Routledge & Sons,1935).

9. Our approach to the problem of under-developed countries is quite consistent with thisview.

10. I believe that Professor Samuelson's defini-tion of the optimum conditions in the Foundations ofEconomic Analysis, pp. 233, 238-39, 246, brings himto a conclusion which in this respect agrees withthat of Barone.

11. It seems that the dismissal of this entirematter from consideration is what is intended byProfessor Samuelson when he concurs in the customof hypothesizing that production itself takes placein firms or industries which are distinct from theindividuals, having no value in and of themselves.Ibid., p. 230. I assume that value here means

relevance to welfare.12. I believe this can be proved, surely in the

case of Adam Smith, although I can here do nomore than simply to affirm it without proof.

13. Foundations of Economic Analysis, p. 246.

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Cropsey - What is Welfare Economics