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11 - Non-welfaristic Features of Kenneth Arrow’s Idea of Justice

from Part II - Developing Modern Welfare Economics

Published online by Cambridge University Press:  04 March 2021

By
Nao Saito
Edited by
Roger E. Backhouse ,
Antoinette Baujard  and
Tamotsu Nishizawa
Roger E. Backhouse
Affiliation:
University of Birmingham and Erasmus University Rotterdam
Antoinette Baujard
Affiliation:
Université de Lyon et Université Jean Monnet à Saint-Étienne
Tamotsu Nishizawa
Affiliation:
Teikyo University Japan
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Summary

This paper characterizes Kenneth Arrow’s contribution to justice issues in economics. When he established the fundamental theorems of welfare economics and the general impossibility theorem, his approach was seen as “welfarist”; however, he gradually came to accept that the consequences of economic and political decision-making are not always just, even when Pareto-optimal. The paper begins with some of his contributions to formal theory. Second, this paper illustrates how Arrow designed political and economic decisions using the same framework in the 1950s, and how he recognized that the significance of justice cannot be reduced to economic efficiency, as neither could it be defined in the strict welfarist informational framework. Finally, this paper argues that Arrow insisted that a criterion of justice can be deduced from the collective decision-making process in the hypothetical original position, because this position assumes equality. The paper concludes that Arrow’s idea of justice is based on a variety of values beyond utility, including non-welfaristic aspects such as freedom, equality, and fundamental rights.

Keywords

Arrowfreedomimpossibility theoremjusticerightssocial welfarewelfarism
Type
Chapter
Information
Welfare Theory, Public Action, and Ethical Values
Revisiting the History of Welfare Economics
 , pp. 256 - 276
Publisher: Cambridge University Press
Print publication year: 2021

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