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Human Well-Being and Economic Goals

Economics and the Good, III: Society
Overview Essay Page 1

David Kiron

Finding out what should be done is no less important than estimating what will happen. Hence, normative economics is no less important than positive economics. But the normative side of academic economics is nowadays heavily handicapped by its still being dominated by an outlook that is logically untenable...the utilitarian one.
- Serge-Christophe Kolm[1]

For over a century, mainstream economic theorists have deferred to the philosophy of utilitarianism. Today, however, utilitarianism finds little support among political philosophers. During the past three decades critics of utilitarianism have increasingly objected to its core idea that the goal of a moral society should be to maximize utility. A central focus for their objections is that utilitarianism is ill-equipped to address matters of justice. Although these problems have been well-known, it was not until 1971, when political philosopher John Rawls proposed a modern alternative to utilitarian moral theory, that these objections were considered by many to be decisive.

Rawls's work opened the way for other alternative conceptions of justice, which together challenged utilitarian hegemony within political philosophy. Collectively, these alternative theories of justice helped kindle an interdisciplinary debate on how to reconcile social goals such as equality, freedom, and rights with the economic goals of efficiency and wealth maximization.

This essay discusses the intersection of economic and social goals. It begins with a look at philosophical challenges to utilitarianism and moves to responses by selected economists. Next, the discussion focuses on the alleged trade-offs between efficiency and equity. It ends with a review of a significant recent debate within political philosophy -- whether the design of social institutions should start from a clear definition of what makes for good living or from a conception of individuals that secures the rights of all.

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[1] Serge-Christophe Kolm, European Economic Review 38(1994): 721-730. Quote is from p. 721.

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