Individual and group utility
Utility of a thing may be defined separately for individuals and groups. Laissez faire economists assumed that group utility depends on individual utilities. They failed to see that group utility cannot be merely a sum of individual utilities. Groups consist of various persons and classes. The group utility depends not only on the utilities to individuals involved in various transactions but it also depends on the favorable and unfavorable effects of transactions on all people including those who are not part of the transactions.
Inadequacy of income as the objective indicator of utility
Lastly, apart from the recognition that happiness is just not money, many economists think that income is not a good measure of welfare. To quote Guillemard (2001, 16416):
Welfare is the result of an expanding production of care, financial benefits, or other services for ensuring the material and cultural conditions for the reproduction of humans as biological beings, as economic producers and members of a work force, and as social beings and citizens (the conditions of integration in society and of social cohesion). |
|
