I’ve been reading I.M.D.Little’s (1950 originally – I have Andrew Sentance’s slight musty, rescued from his garage, 1973 paperback). He wrote: “There can be no significance in national-income comparisons unless a value judgement about changes in distribution is presupposed. But statisticians … do not, of course, wish to make any such presupposition.” He continues that they can tell us that the market value of consumption goods has increased, but cannot conclude that consumption has increased. “There is, after all, no such thing as consumption, the size of which can be measured.”
[amazon_image id=”0198281196″ link=”true” target=”_blank” size=”medium” ]A Critique of Welfare Economics[/amazon_image]
Winging its way to me now, courtesy of a recommendation by Martin Wolf, is by J de V Graaff (1957), which one contemporary review described as “an elegantly executed demolition of ordinary welfare theory.” I don’t need a lot of persuading about the demolition-worthiness of the theory but it does leave rather a huge question about (a) what we think we’re measuring with the national accounts and (b) what we think standard evaluations of public policy are telling us. The answer, of course, is that mostly we don’t think about it.
[amazon_image id=”0521094461″ link=”true” target=”_blank” size=”medium” ]Theoretical Welfare Economics[/amazon_image]