Individuals can rationally pursue their interests without the preferences and marginal utilities that have long taken center stage in economics. Economics without preferences lays out the microeconomics of individual behavior, markets, and welfare when agents cannot always come to judgment. Although economic theory has claimed that self-interest requires agents to form preferences, individuals can protect themselves from harm by refusing to trade options they cannot rank. Many of the anomalies uncovered by behavioral economics – from status quo bias to loss aversion – thus have a rationality design. The absence of preferences also resolves the puzzle that classical economic agents are almost never indifferent between options whereas real-world agents often are. When individuals cannot judge trade-offs, gaps appear between the marginal valuations of gains and losses. These gaps explain why market prices can be volatile and render orthodox efficiency criteria indecisive. Policymakers will no longer be able to pin down an optimal provision of public goods. Traditional schemes that try to harness preference information to compensate agents harmed by economic change will allow virtually any decision to qualify as efficient. Governments should instead spur productivity growth, the main benefit capitalism can deliver, while shielding agents from the price upheavals that result.

In Chapter 7, I discuss the latest crisis of capitalism and Amartya Sen’s journey to rescue capitalism from the capitalists. I begin by discussing the increasing vulnerability of capitalist societies at the end of the twentieth century due to the deregulatory environment encouraged by the Chicago School. I use Karl Polanyi’s double-movement theory to explain the rise of the Chicago School and its assault on the “relationship capitalism” that had evolved in the postwar period. While the new “investor capitalism” was successful at unleashing the power of the market, it also increased the vulnerability of capitalist societies to opportunistic self-interest. This increased vulnerability was fully realized in the 2007–08 mortgage-backed security crisis that nearly collapsed the global financial system. After describing the near collapse of the global financial system, I discuss the implications of the collapse for the neoclassical theory out of Chicago. This leads to a discussion of Amartya Sen’s journey from India to the West to rescue capitalism from the capitalists. This discussion introduces the role of the East in the development of capitalism and its future promise. I conclude by discussing Sen’s critique of capitalism based on Adam Smith’s original moral foundation.

Chapter 17 analyzes his efforts, throughout his scientific career, to measure welfare. Measurement was crucial for his intellectual program. While measurement often succeeded in his early career with the development of business-cycle statistics, the measurement of welfare remained unattainable. The measurement of welfare was important because it would allow a scientific comparison of the welfare levels between different individuals, and thus of the degree of inequality. He wanted to use that as a basis for his scientific notion of justice. In his efforts he went against a general consensus in economics that interpersonal comparisons of welfare were beyond the reach of economic science. Tinbergen took up a chair in Leiden after his retirement and attempted to develop a collaboration with Bernard van Praag and Arie Kapteyn, but their joint approach found little support in the wider economics community. Nonetheless, the failure is interesting because it provides insight into the way in which moral concerns became more important later in Tinbergen’s career, how crucial measurement was to him, and because his attempts foreshadowed later approaches in economics to measure capabilities and happiness. Most importantly, it demonstrates how he hoped that science could inform normative concepts such as justice.

We re-examine Pigou’s ethics in welfare economics with respect to welfarist or non-welfarist (more broadly, utilitarian or non-utilitarian) concepts based on various perspectives, such as incommensurability among utility and people, basic need information approach, non-welfarist justification of the national minimum, and methodological individualism in axiology. Consequently, we could detect certain non-welfarist approaches in his welfare economics, which squarely challenges the orthodox understanding of his works. We can assert that the deviation from simple welfarism was a result of practical considerations. Furthermore, apart from the dichotomy about welfarist and non-welfarist viewpoints, we present novel assessments of Pigou’s welfare notion: a hybrid strategy for the enhancement of people’s well-being. We show that his overall welfare idea involves both subjective and objective accounts and has a three-layered welfare strategy: bare and raw preferences turn into educated and refined ones via objective needs.

John Hicks played a crucial role at birth of the “new” welfare economics founded on the informational basis of interpersonally non-comparable and ordinal utilities. Toward the end of the 1950s, however, Hicks took a bold step by declaring his farewell to the welfarist informational basis of normative economics altogether. The purpose of this paper is to gauge the depth and reach of Hicks’s farewell to the welfaristic approach to normative economics.

Social choice is concerned with the selection of an ideal (or social) option, which can be a so-called ‘social state’, or a social ‘utility’, or a social ‘preference’, or a social choice ‘set’, on the basis of individual utilities, or individual utility functions, or individual preferences, or individual choice sets, or individual choice functions. A number of scholars have outlined the limited aspect of the notion of utility, including, notably and pre-eminently, Amartya Sen and Martha C. Nussbaum. Although they did not put it in such a strong phrase, the basic idea is to replace the notion of utility by the notion of capability (leaving aside ‘happiness’, a notion which for many is hardly distinguishable from utility). As has been remarked by Mozaffar Qizilbash, the development of the capability approach has been focused on the capability of an individual; and the idea of amalgamating or aggregating individual data is consubstantial with social choice. The purpose of this text is to propose some preliminary ideas regarding the aggregation of individual capabilities.

In the framework of a critical illustration of the contemporary history of economics, this chapter recalls the foundations of utilitarianism and the ethics of consequences and provides a survey of research on income inequalities. Then it provides a critical history of welfare economics. It illustrates Sen’s notion of capabilities. It opposes conservative, revolutionary and reformist views on the evolution of capitalism and, finally, discusses a rather unusual topic, the economists’ ethics.

The system accounts in the previous chapters provide a description of the developments of the environment, society and economy as well as the distribution. But the accounts do not answer the question: Are things getting better? In the Global Quality Accounts (GQA), the data from the system accounts are assessed using a quality perspective. In economics, welfare economics and the capital approach are most common, but there are many others as well, from social sciences or natural sciences. There is no perfect approach, just multiple ways of looking at systemic progress. Each of the systems leads to a quality indicator, which provide society with different views.

The previous chapters have shown that there is one powerful community (“the GDP multinational") which is being challenged by a heterogeneous and weakly organised community (“the Beyond-GDP cottage industry). The ever-expanding range of Beyond-GDP initiatives will not lead to success however. A new strategy is based on the GDP success story and aims to create an institutionalised community with a clear goal and coherent structure based on a common language. The chapter argues that the community should not be based on the SDGs, green accounting or the SEEA. It also argues that the community should not be based on economic terminology and theory but rather on multidisciplinary building blocks such as stock/flow accounting, networks and limits. The aim of the community is to enhance well-being and sustainability and one of its most important features is its common language: the System of Global and National Accounts (SGNA). The SGNA has four system accounts (environment, society, economy and distribution), which describe how the systems are developing. However, this does not yet tell people whether the developments are good or bad. This is left to the quality accounts.