Economists use tastes as a source of information about personal welfare and judge the effects of policies upon preference satisfaction; neoclassical welfare economics is the analytical embodiment of this preference sovereignty norm. For an initial distribution of wealth, the welfare-maximizing outcome is the one that exhausts all possible gains from trade. Gains from trade are defined relative to fixed ordinal preferences. This analytical apparatus consists of both the Pareto principle, which implies that externality-free voluntary trades increase welfare, and applied costbenefit (...) analysis, which attempts to weight costs and benefits when evaluating policies that are not Pareto improvements. (shrink)

One of the fundamental components of the concept of economic rationality is that preference orderings are “complete,” i.e., that all alternative actions an economic agent can take are comparable. The idea that all actions can be ranked may be called the single utility assumption. The attractiveness of this assumption is considerable. It would be hard to fathom what choice among alternatives means if the available alternatives cannot be ranked by the chooser in some way. In addition, the efficiency criterion makes (...) sense only if one can infer that an individual's choice reflects the best, in expected welfare terms, among all choices that individual could have made. The possibility that a rearrangement of resources could make someone “better off” without making others “worse off” can be understood only if the post-rearrangement world is comparable with the pre-rearrange-ment world. (shrink)

Over the last few decades, the idea that education should function to promote economic progress has played a major role in shaping educational policy. So far, however, philosophers of education have shown relatively little interest in analysing this notion and its implications. The present article critically examines, from a philosophical perspective, the link between education and the currently prevailing understanding of economic progress, which is grounded in human capital theory. A number of familiar philosophical objections to the idea that economic (...) progress is a worthy educational aim are raised, but it is held that many of these objections stem from a partial understanding of economic theory. The article then moves on to investigate the foundations of human capital theory's conception of economic progress. It is argued that there are inherent tensions between the philosophical foundations of the economist's conception of progress and the very essence of education. The article concludes by suggesting that in order to resolve these tensions we should consider grounding the economic theory that guides educational policy-making in an intersubjective or objective conception of welfare. (shrink)

We argue that consumer sovereignty in an increasingly high tech world is more of a fiction than a fact. We show how the principle of consumer sovereignty that governs the societal impact of economic competition is no longer valid. The world of high tech is increasingly responsible for changes in the opportunity, ability, and motivation of business firms to compete. Furthermore, the world of high tech is increasingly responsible for changes in the opportunity, ability, and motivation of consumers to engage (...) in rational decision making. We conclude that we cannot rely on consumer sovereignty to maintain a thriving economy. Instead, we need to develop performance standards designed to meet the demands of the various stakeholders of the organization. (shrink)

This paper contributes to the (re-)conceptualisation of responsible innovation by proposing an evolutionary economic approach that focuses on the role of consumers in the innovation process. After a discussion of the philosophical foundations and ethical implications of this approach, which bears an explanatory potential that has not been adequately considered in previous discussions of responsible innovation, we present a first step towards capturing the important but often neglected role of consumers in innovation processes (including responsible innovation): We propose an agent-based (...) model that incorporates a multidimensional space of characteristics in which new products or services are represented by more than the mere aspect of price and quality. Instead, innovations are denoted by a large set of characteristics, including also negative or harmful ones. The model is used to illustrate that consumers’ heterogeneity and bounded rationality – even if considered in a simple manner – indeed play a crucial role in the creation and diffusion of responsible innovation which can and should be used for further work in this field and for possible extensions of the model. (shrink)

In the January 6, 1991, issue of theWashington Post Magazine, reporter Walt Harrington wrote a profile of Bryan Stevenson. Mr. Stevenson is a 31-year-old working-class African-American from Delaware who graduated from Harvard Law School and the Kennedy School of Government. Like the typical graduate of Harvard Law School, Mr. Stevenson had the opportunity to join the worlds of six-figure corporate law or high-visibility politics. Rather than follow his colleagues, however, Mr. Stevenson works seven-day, eighty-hour weeks as director of the Alabama (...) Capital Representation Center. He appeals death sentences, handling twenty-four death-row cases himself, supervises five other lawyers who cover about thirty cases, and raises federal government and foundation funding. He does this living a Spartan existence on a salary of $24,000, refusing even the $50,000 directorship salary offered to him. (shrink)

This paper seeks to identify a mid-level unifying ethical principle that may help clarify and articulate the ethical responsibilities of business firms in the field of marketing ethics. The paper examines critically the main principles which have been proposed to date in the literature, namely consumer sovereignty, preserving the conditions of an acceptable exchange, paternalism, and the perfect competition ideal, and concludes that all of them are vulnerable to damaging criticisms. The paper articulates and defends the mutuality principle as the (...) most plausible candidate for the role of master principle in the relations between a firm and its customers. This principle requires that sellers look for reciprocity in their relations with their customers, seeking to provide to their customers something that helps them improve in some way their well-being and is commensurate with what they receive from them. (shrink)

The theory of revealed preference, which lies at the core of the neoclassical economic method, asserts that people's preference orderings are revealed by their actions. This assertion has two possible meanings, of which one is a truism and the other false. When a person joins a riot against the government, he reveals through this action that he would rather riot than not. This is the sense in which the assertion is a truism. But if one means that the person must (...) want a change of government, this is certainly false. His decision to riot could mean only that he considers it dangerous to stay on the sidelines. (shrink)

From its early origins to the present, the development of mainstream economic theory has taken a direction which has excluded the analysis of human needs as a basis for social policy. The problems associated with this orientation are increasingly recognized both by economists and non-economists. As Sen points out, it is indeed strange for a discipline concerned with the well-being of people to neglect the question of needs. Currently, some writers such as Doyal and Gough, post-Keynesian economists such as Lavoie, (...) and those such as Davis and O'Boyle who work in the newly emerging school of social economics have begun to address the question of human needs, especially in relation to problems of policy assessment and evaluation. The approaches of some development economists who have dealt with similar issues were also instrumental in drawing attention to the significance of the long-neglected concept of needs. (shrink)