Beyond Pareto Efficiency: Rethinking Social Welfare through Indian Knowledge System

Abstract

This paper uses the tools of welfare economics to Indian Knowledge Systems (IKS) in order to provide an analysis of the concept of maximising social welfare. Arthur Cecil Pigou and Amartya Sen who developed welfare economics, examines social welfare through concepts such as Pareto Optimality and social welfare functions. This paper focuses whether Indian knowledge systems contribute to the maximization of social welfare. Although conventional economic models cover individual utility and efficiency, Indian knowledge system is shaped by conceptions of well- being, ethical responsibility and ecological balance, raising the most important question regarding the adequacy of pareto efficiency, which neglects issues of distribution, sustainability and long- term welfare. This creates a conceptual gap between efficiency and equity, which is addressed by this paper. By doing so, the paper contributes to the ongoing debate on redefining welfare beyond efficiency-centric models. The study adopts a comparative analytical approach to examine how far welfare economics can assimilate the holistic conception of welfare articulated in Indian knowledge systems. The findings suggest that for overcoming current development challenges, IKS offers a broader interpretation of welfare maximisation, which compliments and extends the conventional welfare economics framework.