How did utilitarian thought influence economics and welfare economics?

Utilitarianism has profoundly shaped economic thought and the development of welfare economics by providing a framework for evaluating policies based on their impact on community well-being.12

Influence on Classical Economics

Classical economists, including David Ricardo and John Stuart Mill, were deeply influenced by utilitarian principles. While early classical theory often focused on the cost of labor as the primary measure of value, later developments shifted toward utility. William Jevons, a founder of the marginal utility school, derived many of his analytical concepts directly from Jeremy Bentham.13

Evolution of Welfare Economics

Welfare economics emerged as a field dedicated to maximizing individual utilities. Early theorists viewed welfare as the sum of individual satisfactions, often assuming that income redistribution from the wealthy to the poor increased total welfare. However, as measuring and comparing individual satisfaction became viewed as scientifically difficult, the field evolved. Modern welfare economics shifted toward more limited criteria, such as evaluating whether a policy makes at least one person better off without harming others, or whether gainers could theoretically compensate losers. While these methods substituted comparative preferences for direct utility calculations, they remain rooted in the utilitarian spirit of assessing social policy through the lens of human welfare.421