ON ECONOMIC INEQUALITY
Amartya Sen
Oxford University Press, expanded edition (1997),
with a substantial annexe by James E. Foster and Amartya Sen
(first published in 1973)

Amartya Sen won the Nobel Prize in Economics in 1998 for his work in welfare economics.

"...the real opportunities that different persons enjoy are very substantially influenced by variations of individual circumstances (e.g., age, disability, proneness to illness, special talents, gender, maternity) and also by disparities in the natural and social environment (e.g., epidemiological conditions, extent of pollution, prevalence of local crime). Under these circumstances, an exclusive concentration on inequalities in income distribution cannot be adequate for an understanding of economic inequality....

...There is indeed an important general problem, central to the theory of justice, of interpersonal variations in converting incomes (and other external resources) into individual advantage—whether or not that advantage is judged by the level of utility of the person...

...At the time OEI-1973 was being written, some basic principles of the theory of justice were under active reconsideration, following the lead given by the pioneering work of John Rawls...

..his [Rawls's] arguments amounted to a fundamental critique and rejection of welfarism...

...Rawls's 'difference principle' entailed giving priority not necessarily to the least happy, but to the least advantaged, and in the Rawlsian way of reckoning, least advantage was identified with having the lowest index value of 'primary goods'. Primary goods are general-purpose means that help anyone to promote their ends, and include 'rights, liberties and opportunities, income and wealth, and the social bases of self-respect'...

...it has been argued [by Sen] that for many purposes, the appropriate space is neither that of ultilities (as claimed by welfarists), nor that of primary goods (as demanded by Rawls). If the object is to concentrate on the individual's real opportunity to pursue her objectives, then account would have to be taken not only of the primary goods the person holds, but also of the relevant personal characteristics that govern the conversion of primary goods into the person's ability to promote her ends...." Amartya Sen, On Economic Equality (1997 edition), Annexe (with James E. Foster), A.7 Space, "Capability, and Inequality, A.7.1, Inequality, welfarism, and justice," pp. 195-198

BOOK DESCRIPTION
OXFORD UNIVERSITY PRESS
In this classic text, first published in 1973, Amartya Sen relates the theory of welfare economics to the study of economic inequality. He presents a systematic treatment of the conceptual framework as well as the practical problems of measurement of inequality. In his masterful analysis, Sen assesses various approaches to measuring inequality and delineates the causes and effects of economic disparities. Containing the four lectures from the original edition as well as a new introduction, this timeless study is essential reading for economists, philosophers, and social scientists.

In a new introduction, Amartya Sen, jointly with James Foster, critically surveys the literature that followed the publication of this book, and also evaluates the main analytical issues in the appraisal of economic inequality and poverty.

BOOK REVIEWS
William J. Baumol–ECONOMICA
"Rarely has so small a volume offered so comprehensive an overview of its subject, constituting a readable and intelligent evaluation of the literature of economic inequality."

THE ECONOMIST
"Professor Sen is well known for his contributions to the higher reaches of welfare economics. The series of four lectures which comprise this book display his usual clarity and rigour of expression."