The Dead are Always Wrong

Economics

Speaker:Thibault Gajdos, GREQAM
Date: Friday 8 June 2012
Time: 16.15
Location: STC/D

Further details

In his letter to Samuel Kercheval, Thomas Jefferson insisted that only the interest of surviving persons should be considered when thinking of changes in legislation. According to Thomas Jefferson there is no reason to account for the dead as "[...] they have no rights. They are nothing; and nothing cannot own something". Jefferson's argument may be extended to social welfare theory by stipulating that the dead should not contribute to Social Welfare. In others words, two societies with different histories, but such that the surviving individuals are equally well off, should be attributed the same social welfare. Of course, it may be the case that parents and ancestor's history has some impact on individual happiness, and therefore indirectly contributes the instantaneous welfare. But most of the literature would agree that apart for this psychological component, the dead should not contribute to the social welfare. The object of the current paper is to show that assuming that dead do not contribute to social welfare typically leads the social planner to have non Paretian preferences as soon as there is some uncertainty about individual mortality.  We will moreover show that the kind of paternalism which results from the assumption that dead should not contribute to social welfare could explain one of the most pregnant paternalistic conclusions that can be found in economics literature; namely the statement that agents, if left on their own, would not save enough.