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A Liberal Theory of Social Welfare: Fairness, Utility, and the Pareto Principle |
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Howard F. Chang [View as PDF]
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110 Yale L.J. 173 (2000)
Amartya Sen shows how liberal rights can produce outcomes that everyone would prefer to avoid, thereby violating the Pareto principle. Similarly, Louis Kaplow and Steven Shavell identify potential conflicts between the Pareto principle and notions of "fairness," which give weight to considerations other than the overall utility level of each individual. Whereas Sen claims that the conflict he identifies shows the unacceptability of the Pareto principle as a universal rule, Kaplow and Shavell claim that the conflict they identify suggests a critique of all fairness notions (including liberal rights). I argue in this Article that both claims are based on questionable assumptions. This Article proposes a middle course that I argue resolves the supposed conflicts while remaining faithful to both liberal fairness principles and the Pareto principle. This Article presents two examples of social welfare functions that can incorporate fairness principles and still comply with the Pareto principle.
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