Journal of Legal Studies 32 (January 2003) 2003 by The University of Chicago. All rights reserved. 0047-2530/2003/3201-0012$01.50
Fairness versus Welfare: Notes on the Pareto Principle, Preferences, and Distributive Justice
Louis Kaplow and Steven Shavell
In Fairness versus Welfare, we advance the thesis that social policies should be assessed entirely
on the basis of their effects on individuals' well-being. This thesis implies that no independent
weight should be accorded to notions of fairness (other than many purely distributive notions).
We support our thesis in three ways: by demonstrating how notions of fairness perversely
reduce welfare, indeed, sometimes everyone's well-being; by revealing numerous other defi-
ciencies in the notions, including their lack of sound rationales; and by providing an account
of notions of fairness that explains their intuitive appeal in a manner that reinforces the
conclusion that they should not be treated as independent principles in policy assessment.
In this essay, we discuss these three themes and comment on issues raised by Richard Craswell,
Lewis Kornhauser, and Jeremy Waldron.
In Fairness versus Welfare (Kaplow and Shavell 2002, hereinafter FVW), we advance the thesis that social policies, notably, legal rules, should be selected entirely with regard to their effects on the well-being of indi- viduals. Accordingly, notions of fairness, such as corrective and retrib- utive justice, should receive no independent weight in policy assessment. Our argument is based on the perverse effects on welfare of pursuing notions of fairness, other problematic aspects of the notions, notably, their lack of rationale, and a reconciliation of our thesis with the ex- istence of moral intuitions that seem to favor the notions. Each of these
LOUIS KAPLOW and STEVEN SHAVELL are Professors at Harvard Law School and Research Associates at the National Bureau of Economic Research. We thank the John M. Olin Center for Law, Economics, and Business at Harvard Law School for financial support. We have benefited from exchanges with Richard Craswell concerning his comment and from the research assistance of Zachary Price.
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themes is developed in general terms and in detailed analyses of leading notions of fairness in the areas of torts, contracts, legal procedure, and law enforcement.
In this symposium, Richard Craswell questions our demonstration that endorsement of any notion of fairness sometimes reduces every individual's well-being (that is, violates the Pareto principle). Jeremy Waldron, while commending our incorporation of distributive concerns in the concept of welfare that we defend, voices some disagreement with our treatment of the subject of distributive justice. And Lewis Korn- hauser presents arguments concerning our inclusive definition of well- being.
In Section 1, we review the terminology and the main themes of our book. Then,...