Public Choice III

Whereas one can speak of the positive theory of public choice, based upon economic man assumptions, one must think of normative theories of public choice, for there are many views of what the goals of the state should be and how to achieve them. This potential multiplicity has been the focus of much criticism by positivists, who have argued for a “value-free” discipline. For the bulk of economics, it might be legitimate to focus on explanation and prediction, and leave to politics the explication of the goals of society. For the study of politics itself, in toto, to take this position is less legitimate; thus the interest in how the basic values of society are or can be expressed through the political process. The challenge that normative theory faces is to develop theorems about the expression and realization of values, based on generally accepted postulates, in the same way that positive theory has developed explanatory and predictive theorems from the postulates of rational egoistic behavior. Part V reviews some efforts to take up this challenge.

The Bergson-Samuelson social welfare function

The traditional means for representing the values of the community in economics is to use a social welfare function (SWF). The seminal paper on SWFs is by Bergson (1938), with the most significant further explication by Samuelson (1947, ch. 8).