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Pigou's Utilitarianism refers to the contribution of British economist Arthur Pigou in terms of classical utilitarianism. Pigou recognized the total prosperity of society as the sum of the usefulness of the members of society. He assumed that these usages are additive and comparable. Total prosperity will thus be a function of: W = ∑ i = 1 n U i ( x ) {\displaystyle {W=\sum \limits _{i=1}^{n}U_{i}(x)\,}} , where n is the number of units in the community, and x all the features of the world, which can determine the happiness of the individual. Pigou in his research focused only on economic prosperity, that is, from the measurable sources in money. Assumptions and conclusions

If the following assumptions are met:

With a steady income distribution, economic wellbeing is growing as income in the community increases. If the income distribution is variable, there is no certainty that income growth will increase economic prosperity. This is a direct consequence of the 4th assumption - the decreasing marginal utility. It means that rich man is less happy with each successive unit of money than a poor man. Let us consider the situation when the society is rich, while the rich become richer and the poor poorer. Even if the balance of changes in rich and poor income is positive, we do not know how economic prosperity will be (loss of usefulness of the poor may be greater than the increase of the wealth of the rich). The same situation we have for impoverished society, with the increase of poor incomes and the more significant reduction of rich incomes - the profit of the poor can be higher than the loss of usefulness of the rich. Such thinking only makes sense when we consider the basic assumption of Pigou, the comparability of utility. The strong reason for the above is that while maintaining the same income of the society, it is justified to take some of the richer income and give it to the poor, as this leads to increased economic prosperity.

In conclusion, Pigou's reasoning follows the following two theorems: Bibliography

wiki

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