Were the Ordinalists Wrong About Welfare Economics?
Author(s): Robert Cooter and Peter Rappoport
Source: Journal of Economic Literature, Vol. 22, No. 2 (Jun., 1984), pp. 507-530
THE DEVELOPMENT of utility theory has
experienced two definitive episodes:
the "marginalist revolution" of the 1870s
and the "Hicksian" or "ordinalist revolution"
of the 1930s. While the first event
established a central place for utility theory
in economics, the second restricted
the concept of utility acceptable to economics.
The term "ordinalist revolution"
refers to the rejection of cardinal notions
of utility and to the general acceptance
of the position that utility was not comparable
across individuals. The purpose
of this paper is to analyze the events
comprising the ordinalist revolution with
a view to determining whether they
achieved the advances in economic science
usually claimed for them.