ABSTRACT
This chapter discusses the conflicts between liberty and social welfare in historical perspective. It describes the rationale for taking a historical perspective on the liberty versus social welfare problem, with particular reference to the thought of Jean-Jacques Rousseau. It presents an interpretation of Rousseau's thought in microeconomic terms, and identification of a dual utility analytical device that resolves conflict. The chapter also discusses how the liberty-welfare conflict might be resolved. It outlines the dual utility device and relates this to resolving the liberty-welfare conflict. In the Paretian liberal paradox, Sen shows that it is logically inconsistent to be committed to all of the following ideas: acceptance of Paretian value judgements; some minimal commitment to individual liberty; acceptance of any possible configuration of individual preferences; and acceptance of a social welfare function (SWF) as representative of the social good.
