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BOOK REVIEWS Scholasticism and Welfare Economics. By Stephen Theodore Worland. Notre Dame, Ind.: University of Notre Dame Press, 1967. Pp. 806. $7.50. In his Economics of Welfare, regarded by many as the holy writ of welfare economics, the late Professor A. C. Pigou of Cambridge University distinguished clearly between economic welfare and what he called total welfare, the latter to include social, cultural, spiritual (and perhaps military ?), welfare. His book, he claimed, was restricted to that part of total welfare that can be brought directly or indirectly into relation with the measuring rod of money--economic welfare. He added that economic welfare will serve as a barometer or index of total welfare. . . . What we wish to learn is, not how large welfare is, or has been, but how its magnitude would be affected by the introduction of causes which it is in the power of statesmen or private persons to call into being. . . . Any rigid inference from effects on economic welfare to effects on total welfare is out of the question. In some fields the divergence between the two effects will be insignificant, but in others it will be very wide. Nevertheless, I submit that, in the absence of special knowledge, there is room for a judgment of probability (Economics of Welfare, New York: St. Martin's Press, 1929, pp. 11 et seq.). Such a quotation will serve as a useful starting point for a review of Professor Worland's book; but let it be said from the outset that it is an extremely useful addition to the literature available on welfare economics. Pigou raises early in his great work the central (and as yet unresolved) problem of welfare economics-the relationship which exists, or should exist, between the science of ethics or moral philosophy and that of economics . He also describes the main thrust of welfare economics when he speaks of the " causes which it is in the power of statesmen or private persons to call into being," for welfare economics is concerned with economic policy and not merely with economic analysis. The welfare economist makes no bones about his concern for society and its ills. The central concept of Pigou's elaborate analysis is that of marginal productivity or utility. The usefulness of the concept is indicated by Professor Worland when he writes that the distinction between one sector of the economy and another for the purpose of evaluating economic activity and performance reduces to this: Is the marginal 480 BOOK REVIEWS 431 utility generated by an increment of resources in one sector of the economy equal to, less than, or more than, its marginal utility in another sector? (p. ~63) Suffice it to say here that, if the marginal utility of the resources is greater in one sector than it is in another, then it is in the interests of the economy that these resources should be moved. Marginal utility, however, is measurable only in monetary terms; and a movement of resources of any kind may be deemed to be economically desirable as a result of such measurement -even though it is socially undesirable, or at least has socially undesirable overtones. This is the problem. Pigou circumvented it (but did not solve it) by distinguishing between economic and total welfare and postulating his "judgment of probability." Provided one accepts his caveat and the consequent conclusion that a maximization of economic welfare will simultantously maximize total welfare, one can proceed to accept his general conclusions about economic policy. However, the gap between economic and total welfare cannot be closed merely by an assumption of probability. The recognition of the existence of such a gap, and of its social implications, has led to a further refinement of welfare economics by economists like Nicholas Kaldor and J. R. Hicks, a refinement which is indicated by the term New Welfare Economics and to which Professor Worland devotes a great deal of his attention. The crux of the question lies in the distribution of purchasing power throughout the economy. The concept of marginal utility is useful to economic analysis, provided one is dealing with a market economy; it is of maximum usefulness to economic policy, when one is dealing with the...

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