ABSTRACT
INTRODUCTION In his 1981 Richard Ely Address to the American Economics Association, Lionel Robbins reasserted his conviction, originally posed in his famous 1932 essay, that policy analysis, and indeed applied economics more generally, necessarily relies on value judgments and therefore lies outside the scope of scientific (“value-free”) economics. Instead of repudiating policy analysis on these grounds, however, Robbins called for the (re)creation of “political economy”—“covering that part of our sphere of interest which essentially involves judgments of value. Political economy, thus conceived, is quite unashamedly concerned with the assumptions of policy and the results flowing from them” (1981: xxvii).1 In the face of a seemingly intractable measurement problem created by the impossibility of interpersonal comparisons of utility or welfare, Robbins’s recommendation is that economists redirect their efforts away from welfare economics in the tradition of the felicific calculus and into “political economy” as such.
