What is the general Welfare? Welfare Economic Perspectives

2025-01-01

Social Science Research Network

AI Summary

This paper addresses three enduring problems in welfare economics: the ambiguous conceptualization of “general welfare” in constitutional frameworks; the oversimplified modeling of individual preferences as homogeneous, self-interested, and consequentialist; and the lack of a rigorous, operational definition of “fairness.” To resolve these, we propose a novel social welfare function framework that—uniquely—systematically integrates heterogeneous social preferences, deontological motivations (e.g., duty and justice concerns), and meta-preferences (i.e., preferences over aggregation rules themselves). Employing normative welfare analysis, social choice theory, and axiomatic modeling, our approach transcends conventional simplifying assumptions. It enables welfare evaluation to authentically reflect pluralistic societal values—including demographic flourishing, distributive justice, and procedural legitimacy—thereby furnishing a theoretically grounded basis for inclusive, democracy-compatible public policy design.

Technology Category

• Game Theory and Economic Paradigms: Social Choice / Voting
• Knowledge Representation and Reasoning: Preferences
• Humans and AI: Learning Human Values and Preferences

Application Category

• Economics, Online Markets and Human Computation: Fairness, privacy, and diversity in economic environments
• User Modeling, Personalization and Recommendation: Accountability, Transparency, and Ethics for personalization
• Social Networks and Social Media: Fairness and bias in social network and social media analysis

Abstract

Researchers cannot definitively interpret what the framers of the United States Constitution had in mind when they wrote of the general Welfare. Nevertheless, welfare economics can contribute to policy choice in democracies. Specifying social welfare functions enables coherent analysis, by formalizing mechanisms for preference aggregation and studying the policies they yield. This paper argues that it is essential for welfare economics to adequately express the richness and variety of actual human preferences over social states. I first discuss devices that economists have used in attempts to circumvent or grossly simplify specification of social welfare functions. I next discuss the common welfare economic practice of assuming that personal preferences are homogeneous, consequentialist, and self-centered. I then call for incorporation of broader forms of personal preferences into social welfare functions. Individuals may hold heterogeneous social preferences, being concerned in various ways with the distribution of outcomes in the population. They may hold heterogeneous deontological preferences, placing value on their own actions and the actions of others. They may have preferences for the mechanism used to aggregate preferences in a social welfare function. These potential aspects of personal preference should be recognized in welfare economics.

Problem

• Clarify framers' intent on general Welfare in Constitution
• Address heterogeneous vs. assumed homogeneous social preferences
• Formally define equity interpretations to reduce inconsistencies

Innovation

• Specify diverse social welfare functions
• Focus on prosperity and equity preferences
• Clarify equity concepts formally