Persons and Their Well-Being: A Critical Discussion of Kaplow and Shavell's Fairness Versus Welfare
Queen's Law Journal, Vol. 30, pp. 1-34, 2004
34 Pages Posted: 13 Jun 2010
Date Written: 2004
At the heart of any legal policy decision is a set of value judgments about the state of the world we live in. Justice, fairness and social welfare are concepts that play varying roles in these decisions. Welfare economics, a subset of economic theory, imparts a normative framework to the decisions, by examining economic activities at an individual level, in an attempt to maximize aggregate social welfare.
As distinguished researchers in the field of economic analysis, Louis Kaplow and Steven Shavell have generated a plethora of debates with the release of Fairness versus Welfare. Their central claim is the proposition that the sole decision-making criterion for creating legal policy must be aggregate well-being; other factors, such as fairness or justice, will bring an undesirable result. Accordingly, individuals are not seen as holders of rights, but as depositories of well-being.
The author challenges the validity of Kaplow and Shavell's thesis on a number of grounds. First, their claim requires a clear conception of individual well-being. But in his view it does not; accordingly, their central premise is undermined. Second, he argues that the authors define fairness in a circular way that supports their thesis; that is, they define it as anything that does not increase aggregate welfare. Finally, the author notes that Kaplow and Shavell purport to care about individual well-being but are willing to sacrifice any individual in order to achieve a higher aggregate amount of well-being--in effect, treating individuals as things, or means to an end, rather than as the beneficiaries of the exercise.
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