On 6/2/07, Julio Huato <[EMAIL PROTECTED]> wrote:
I agree that Hahnel's book is a valuable contribution. But I don't
think it was meant as the final word.
Instead, it's the sketch of a research program to go beyond
traditional welfare analysis. At least, that's the way I understand
it. In the little I've read from them, Gintis and Bowles grapple with
the same issues -- the inadequacy of traditional welfare analysis.
In a sense, I translate Gintis as saying (something I concur with)
that there is already much work in economic theory that amounts to
some sort of realization (contradictory and all) of the research
program outlined by Hahnel.
It'd be interesting to hear evidence for this assertion.
After the general equilibrium main theorems were contemplated for a
little while (say, a decade), economic theory had nowhere else to go
but to critique them. Without necessarily looking at the big picture
implication, a lot of work was and it's still being done in precisely
this direction.
there's an alternative to critiquing GE theorems. We could reject the
whole GE approach to "welfare economics." For those who haven't been
initiated into the cult, "welfare economics" is the economists'
version of ethics, including distributive ethics.
For example, we could follow the lead of Tibor Scitovsky (_The Joyless
Economy_) and try to base "welfare economics" on what's actually good
for people rather than what the explicitly want. This would involve
learning from psychologists, among other things. The behavioral
economists have started learning from psychologists, but they are
hardly have influenced the economics establishment yet. As far as I
can see, they also cling to methodological individualism (Scitovsky
doesn't) and so reject any kind of role for sociological forces.
Another (related) road would be to follow Len Doyal and Ian Gough's _A
Theory of Needs_ (Guilford, 1991) and to see "market failure" as the
non-fulfillment of human needs.
The standard version of welfare economics, as I understand it, is that
something is an example of market failure when results differ from
that of the imaginary perfect market system (the Walras-Arrow-Debreu
system) and thus do not correspond to what people subjectively want,
given their tastes and the distribution of income and wealth.
On the other hand, as I interpret them, Doyal & Gough define needs not
as intense subjective wants but as the objective costs that must be
paid for maintenance of normal human activity or the attainment of the
ideal human life, both defined within the context of society. (They
have two standards of need.) "Market failure" thus would involve
either the inadequate covering of these costs -- leading to a sinking
in the quick-sand of the vicious circle of poverty -- or the failure
to allow people to live up to their potential.
--
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your
own way and let people talk.) -- Karl, paraphrasing Dante.
