Autonomy, Welfare, and the Pareto Principle
44 Pages Posted: 8 Feb 2014 Last revised: 25 Aug 2014
Date Written: February 8, 2014
The Pareto principle has great intuitive appeal, but poses perplexities on closer examination. What exactly do we mean by “preferences”? Should the principle apply ex post or ex ante? Does it uphold individual autonomy, individual welfare, or both?
This essay argues that the Pareto principle is best understood, in utilitarian terms, as connecting social welfare with an objective appraisal of individual welfare. Indeed, with only modest additional assumptions, the Pareto principle implies a utilitarian social welfare function. It is much more difficult to link Pareto with autonomy norms for several reasons, including not only Sen’s paradox but a bevy of other difficulties.
Keywords: welfare economics, Pareto principle, utilitarianism, paternalism, libertarianism
JEL Classification: A16, D60, D63, D70, D71
Suggested Citation: Suggested Citation