According to an often repeated definition, economics is the science of individual choices and their consequences. The emphasis on choice is often used – implicitly or explicitly – to mark a contrast between markets and the state: While the price mechanism in well-functioning markets preserves freedom of choice and still efficiently coordinates individual actions, the state has to rely to some degree on coercion to coordinate individual actions. Since coercion should not be used arbitrarily, coordination by the state needs to be legitimized by the consent of its citizens. The emphasis in economic theory on freedom of choice in the market sphere suggests that legitimization in the market sphere is “automatic” and that markets can thus avoid the typical legitimization problem of the state. In this paper, I shall question the alleged dichotomy between legitimization in the market and in the state. I shall argue that it is the result of a conflation of choice and consent in economics and show how an independent concept of consent makes the need for legitimization of market transactions visible.

A principle claiming equal entitlement to continued life has been strongly defended in the literature as a fundamental social value. We refer to this principle as ‘equal value of life'. In this paper we argue that there is a general incompatibility between the equal value of life principle and the weak Pareto principle and provide proof of this under mild structural assumptions. Moreover we demonstrate that a weaker, age-dependent version of the equal value of life principle is also incompatible with the weak Pareto principle. However, both principles can be satisfied if transitivity of social preference is relaxed to quasi-transitivity.

Whereas principles of justice adjudicate interpersonal conflicts, principles of prudence adjudicate intrapersonal conflicts – i.e., conflicts between the preferences an individual has now and the preferences he will have later. On a contractarian approach, principles of justice can be theoretically grounded in a hypothetical agreement in an appropriately specified pre-moral situation in which those persons with conflicting claims have representatives pushing for their claims. Similarly, I claim, principles of prudence can be grounded in a hypothetical agreement in an appropriately specified pre-prudential situation in which those temporal parts of a person with conflicting claims have representatives as advocates of their claims. During the course of developing the prudential contractarian methodology, I consider a dispute between those who would see principles of justice as the outcome of a choice (e.g., Rawls) and others (e.g., Gauthier) who argue for viewing principles of justice as the outcome of a bargain. I contend that the reasons I adduce in favor of viewing principles of prudence as the outcome of a choice weigh equally in favor of viewing principles of justice as the outcome of a bargain.

Philip Pettit (2001) has suggested that there are parallels between his republican account of freedom and Amartya Sen's (1970) account of freedom as decisive preference. In this paper, I discuss these parallels from a social-choice-theoretic perspective. I sketch a formalization of republican freedom and argue that republican freedom is formally very similar to freedom as defined in Sen's “minimal liberalism” condition. In consequence, the republican account of freedom is vulnerable to a version of Sen's liberal paradox, an inconsistency between universal domain, freedom, and the weak Pareto principle. I argue that some standard escape routes from the liberal paradox – those via domain restriction – are not easily available to the republican. I suggest that republicans need to take seriously the challenge of the impossibility of a Paretian republican.

A syntactic formalism for the modeling of belief revision in perfect information games is presented that allows to define the rationality of a player's choice of moves relative to the beliefs he holds as his respective decision nodes have been reached. In this setting, true common belief in the structure of the game and rationality held before the start of the game does not imply that backward induction will be played. To derive backward induction, a “forward belief” condition is formulated in terms of revised rather than initial beliefs. Alternative notions of rationality as well as the use of knowledge instead of belief are also studied within this framework.

All conceptions of equal opportunity draw on some distinction between morally justified and unjustified inequalities. We discuss how this distinction varies across a range of philosophical positions. We find that these positions often advance equality of opportunity in tandem with distributive principles based on merit, desert, consequentialist criteria or individuals' responsibility for outcomes. The result of this amalgam of principles is a festering controversy that unnecessarily diminishes the widespread acceptability of opportunity concerns. We therefore propose to restore the conceptual separation of opportunity principles concerning unjustified inequalities from distributive principles concerning justifiable inequalities. On this view, equal opportunity implies that that morally irrelevant factors should engender no differences in individuals' attainment, while remaining silent on inequalities due to morally relevant factors. We examine this idea by introducing the principle of ‘opportunity dominance' and explore in a simple application to what extent this principle may help us arbitrate between opposing distributive principles. We also compare this principle to the selection rules developed by John Roemer and Dirk Van de Gaer.

This article challenges the general thesis that an unconditional basic income, set at the highest sustainable level, is required for maximizing the income-leisure opportunities of the least advantaged, when income varies according to the responsible factor of labor input. In a linear optimal taxation model (of a type suggested by Vandenbroucke 2001) in which opportunities depend only on individual productivity, adding the instrument of a uniform wage subsidy generates an array of undominated policies besides the basic income maximizing policy, including a “zero basic income” policy which equalizes the post-tax wage rate. The choice among such undominated policies may be guided by distinct normative criteria which supplement the maximin objective in various ways. It is shown that most of these criteria will be compatible with, or actually select, the zero basic income policy and reject the basic income maximizing one. In view of the model's limited realism, the force of this main conclusion is discussed both in relation to Van Parijs' argument for basic income in Real Freedom for All (1995) and to some key empirical conditions in the real world.

The economic analysis of law has gone through a remarkable change in the past decade and a half. The founding articles of the discipline – such classic pieces as Ronald Coase's “The problem of social cost” (1960), Richard Posner's “A theory of negligence” (1972) and Guido Calabresi and Douglas Malamed's “Property rules, liability rules, and inalienability: One view of the cathedral” (1972) – offered economic analyses of familiar aspects of the common law, seeking to explain, in particular, fundamental features of the law of tort in terms of such economic ideas as transaction costs (Coase), Kaldor-Hicks efficiency (Posner), or minimizing the sum of the accident costs and avoidance costs (Calabresi and Malamed). In each case, they argued that the law of torts should be understood as a set of liability rules selected for their incentive effects, rather than as a set of substantive rights and remedies for their violation. These authors claimed to be able to explain most of the features of tort law and, where features were found that did not fit with their preferred explanations, recommended modification. Although they disagreed on important questions, each of the pieces seems to work a manageable structure into what strikes first-year law students as an otherwise random morass of common-law judgments. Generations of legal academics were introduced to these works, and drawn into their way of looking at things. As a student studying first-year torts with Calabresi at Yale, I had the sense that I was in the presence of greatness.

In Fairness versus Welfare (FVW), we advance the thesis that social policies should be assessed entirely with regard to their effects on individuals' well-being. That is, no independent weight should be accorded to notions of fairness such as corrective or retributive justice or other deontological principles. Our claim is based on the demonstration that pursuit of notions of fairness has perverse effects on welfare, on other problematic aspects of the notions, and on a reconciliation of our thesis with the evident appeal of moral intuitions. Here we summarize our three arguments and explain that Professor Ripstein's commentary largely fails to respond to them. (We will pass over some of what he says because it has little to do with our book, and we will not address his rather surprising attacks on our scholarship because the reader can readily verify their inaccuracy.)