Comment on “The Veil of Public Ignorance”∗

Nehring (2004) proposes an interesting methodology to extend the utilitarian criterion defined under complete information to an interim social welfare ordering allowing to compare acts. The first axiom defining his approach, called “State Independence,” requires the interim social welfare ordering to be consistent with ex-post utilitarian comparisons: if it is commonly known that the act f selects in each state an outcome that is socially prefererred according to the utilitarian criterion to the lottery selected by an alternative act g, then f should be interim socially preferred to g. The second axiom is a classical condition of consistency with respect to interim Pareto comparisons: if an act f interim Pareto dominates and act g, then f should be interim socially preferred to g. Nehring proves that 1) these two axioms are incompatible if there is no common prior, and 2) that the unique interim social welfare ordering that satisfies these two axioms when there is a common prior is the ex-ante utilitarian criterion. The purpose of this comment is to show that Nehring’s methodology does not prove helpful in finding ways of extending other classical social welfare orderings. I show indeed that the corresponding state-independence property becomes incompatible with the interim Pareto criterion for a very large class of common priors, as soon as the social welfare ordering satisfies the strict Pigou-Dalton transfer principle (strict PD for short). I also show that his impossibility result in the absence of a common prior extends to any social welfare ordering that satisfies PD. The Pigou-Dalton principle states that transferring utility so as to reduce inequality should never hurt from a social perspective. Strict PD requires that the resulting utility profile is socially strictly preferred. PD is often viewed as a very appealing axiom in social choice theory, and indeed all the classical social welfare orderings (e.g. utilitarian sum, egalitarian minimum, and Nash product) ∗K. Nehring, 2004, Journal of Economic Theory 119, 247-270 †Department of Economics, Brown University, Providence, Rhode Island [email protected]. Financial support from the National Science Foundation (grant SES-0851210) is gratefully acknowledged.