Modern economic theory draws a sharp distinction between positive economics, which explains the working of the economic system, and welfare economics, which prescribes policy. In the domain of welfare economics the impossibility of interpersonal utility comparisons has for a long time been believed to impose strict limitations on the economist, which kept this branch of economic theory in the background. Recently, however, there has been a reawakening of interest in welfare problems, following assertions that these limitations are less restrictive than they were hitherto supposed to be.1The present note attempts to analyse the problem in detail.
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