The Welfare Function: Its Role in Welfare Economics
Welfare economics is that part of economics where such words as "good" and "bad," "ought" and "ought not," hopefully banished from the realm of positive economics, reappear to serve as guides for public policy. It is an applied science, in the same way that medicine is an applied science. Medicine gathers together pertinent information from anatomy, physiology, pharmacology, bacteriology, psychology, physical chemistry, and other disciplines in terms of a single purpose: to combat illness in man; or, to put it in a positive way, to further human health. Welfare economics, similarly, gathers together the pertinent theoretical relationships from positive or "pure" economics in terms, typically, of a single end: the economic welfare of the community. The various prescriptions of welfare economics, whether in concrete form bearing on real issues of the day, or in the highly abstract form of "optimum conditions," have meaning only with respect to the particular end or set of ends being considered.
This is not to say that all welfare economists always are thinking of the same end toward which to prescribe. For one thing, it is not at all clear what dividing line -- if any -- should be set up between policy evaluations and recommendations ostensibly aimed at limited special goals, and other policy evaluations and recommendations ostensibly aimed at the goal of the welfare of the group. In other words, our very definition of "welfare economist" is notoriously ambiguous. There is a presumption that no public policy (in the widest sense of the term) is oriented toward social diswelfare,