TOWARDS A BROADER CONCEPT OF WELFARE?
THE development of modern welfare economics has been punctuated by a series of methodological controversies, the highly suggestive term "welfare", with its ethical overtones, adding fuel to the fire. The Classical economists took it for granted that the Art of Political Economy was their legitimate sphere and exercised it without any self-consciousness. However, with the Marginal Revolution and the rise of Continental schools of thought scrupulous about methodological purity, a distinction was drawn between the old broader concept of Political Economy and the new narrower concept of Economics as a pure science. It was then argued that scientific economics should restrict itself to the positive cause and effect analysis of Price economics and that Welfare economics was unscientific as it involved interpersonal comparisons of utility and normative value judgments.
In Part II we have shown how interpersonal comparisons of utility can be avoided by the Paretian formulation of the Optimum and the principle of Compensation. We have also pointed out that welfare analysis need not involve any normative value judgments so long as we take the wants of the individuals to be given and constant and confine our study to the purely mechanical efficiency of the economic system in satisfying these given wants. At this pure subjective level of analysis our propositions are logically as stringent as those of price economics. But, since we stop short at this neutral concept of mechanical efficiency, we are still on an intermediate plane of discourse and although our propositions deal with quantities of satisfaction they are in some ways still as inconclusive as those at the physical level as a guide to practical action. Thus when we have demonstrated that a particular pattern of allocating the resources satisfies the given wants better than others, this does not amount to a categorical imperative that this pattern ought to be adopted. To obtain that we need a further premise, viz. that these given wants are of the same ethical quality of