Abstract

The coherence of general good turns out to conflict with the widely accepted Pareto principle. This chapter explains the conflict and resolves it in favour of coherence. It also presents an example of a head‐on collision between coherence and the Pareto principle. The example relies on an auxiliary assumption, but one that is very plausible. The principle of personal good is immune to the difficulty raised by the probability agreement theorem. The theorem presents welfare economics with a dilemma: it must abandon either the coherence of social preferences or else the traditional Pareto principle. Either way, it will have to repudiate Harsanyi's theorem. The ex‐ante school of welfare economists abandons coherence. This is the best established school. The ex‐ante school cleaves to the traditional Pareto principle. Consequently, it has to accept incoherent social preferences.