Empiricism, ethics and orthodox economic theory: what is the appropriate basis for decision-making in the health sector?

Economics is commonly defined in terms of the relationship between peopleʹs unlimited wants and societyʹs scarce resources. The definition implies a central role for an understanding of what people want, i.e. their objectives. This, in turn, suggests an important role for both empirical research into peopleʹs objectives and debate about the acceptability of the objectives. In contrast with this expectation, economics has avoided these issues by the adoption of an orthodoxy that imposes objectives. However evidence suggests, at least in the health sector, that people do not have the simple objectives assumed by economic theory. Amartya Sen has advocated a shift from a focus on “utility” to a focus on “capabilities” and “functionings” as a way of overcoming the shortcomings of welfarism. However, the practicality of Senʹs account is threatened by the range of possible “functionings”, by the lack of guidance about how they should be weighted, and by suspicions that they do not capture the full range of objectives people appear to value. We argue that “empirical ethics”, an emerging approach in the health sector, provides important lessons on overcoming these problems. Moreover, it is an ethically defensible methodology, and yields practical results that can assist policy makers in the allocation of resources.