14.4 : Drawback of Social Welfare Function

The Rawlsian social welfare function, introduced by philosopher John Rawls, is a framework in welfare economics that assesses societal well-being by focusing on the utility of the least advantaged members. This approach aligns with Rawls's theory of justice, which posits that a just society should prioritize improving the conditions of its most disadvantaged individuals.

Consider a society with three individuals:

• Individual A: Utility level of 8
• Individual B: Utility level of 4
• Individual C: Utility level of 2

According to the Rawlsian social welfare function, the welfare of this society is determined by the utility of Individual C, the least advantaged member, which is 2. Any policy that increases Individual C's utility, even marginally, is viewed as an enhancement of social welfare. For instance, a policy increasing Individual C's utility from 2 to 3 would enhance social welfare, even if it slightly reduces the utilities of Individuals A and B.

Egalitarian Philosophy

The Rawlsian social welfare function reflects egalitarian principles. By focusing on the welfare of the least advantaged, it seeks to reduce disparities and promote a more equitable distribution of resources.

Comparative Perspective: Utilitarianism vs. Rawlsian Approach

While the Rawlsian framework focuses on the least advantaged, utilitarianism aims to maximize total or average utility across society. This difference can lead to divergent policy recommendations:

• Utilitarian Approach: May endorse policies that increase overall utility, even if they exacerbate inequalities.
• Rawlsian Approach: Prioritizes policies that improve the situation of the least advantaged, even if the total or average utility gains are smaller.

Criticisms and Limitations

Despite its focus on equity, the Rawlsian social welfare function faces several criticisms:

• Subjectivity: Determining the welfare of individuals involves subjective judgments, as utility is inherently personal and varies among individuals.
• Policy Implications: Social welfare functions can lead to conflicting policy recommendations. A Rawlsian approach may reject policies that increase average utility if they fail to benefit the least advantaged members of society. This can create challenges in reaching a consensus on policy decisions.
• Practicality: Implementing policies solely based on the welfare of the least advantaged may neglect the potential benefits to others, possibly leading to inefficiencies.