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Pareto and Pigou on Ophelimity, Utility and Welfare: Implications for Public Finance

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  • Michael McLure

    (UWA Business School, The University of Western Australia)

Abstract

In view of the distinct and seminal contributions of Pareto and Pigou to the economics of welfare, Pigou’s enduring influence in the field of public finance and Pareto’s hostility to developments in that field of study, the lack of a comparative study of their contributions is unfortunate. This study contrasts the place of ophelimity and utility and in these authors’ approaches to welfare studies. Attention is also given to the place of individuals’ consciousness of consumption by others in the treatment of economic welfare and total welfare. It is found that the substantive differences in the welfare studies of these two scholars have less to do with Pigou’s direct and Pareto’s less direct materialistic focus of welfare economics or the differing ordinal/cardinal dimensions to their analysis, than with Pareto’s and Pigou’s diverse views: on the theoretical representation of the economic phenomenon when individual behaviour is influenced by the consumption by others; and on the character of science. These last two differences are important because they have direct consequences for the scope of economic and social welfare theories and the choice between

Suggested Citation

  • Michael McLure, 2009. "Pareto and Pigou on Ophelimity, Utility and Welfare: Implications for Public Finance," Economics Discussion / Working Papers 09-13, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:09-13
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    References listed on IDEAS

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    1. Nahid Aslanbeigui & Steven G. Medema, 1998. "Beyond the Dark Clouds: Pigou and Coase on Social Cost," History of Political Economy, Duke University Press, vol. 30(4), pages 601-625, Winter.
    2. Luigino Bruni, 2002. "Vilfredo Pareto and the Birth of Modern Microeconomics," Books, Edward Elgar Publishing, number 2238.
    3. Collard, David A, 1983. "Pigou on Expectations and the Cycle," Economic Journal, Royal Economic Society, vol. 93(37), pages 411-414, June.
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    5. Cooter, Robert & Rappoport, Peter, 1984. "Were the Ordinalists Wrong about Welfare Economics?," Journal of Economic Literature, American Economic Association, vol. 22(2), pages 507-530, June.
    6. Franco Donzelli, 2006. "Marshall vs. Walras on Equilibrium and Disequilibrium," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1037, Universitá degli Studi di Milano.
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    Cited by:

    1. Amedeo Fossati, 2010. "Vilfredo Pareto and the methodology of the Italian tradition in public finance," DEP - series of economic working papers 1/2010, University of Genoa, Research Doctorate in Public Economics.
    2. Drakopoulos, Stavros A., 2010. "The history of the mainstream rejection of interdependent preferences," MPRA Paper 23980, University Library of Munich, Germany.

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