Memorandum, Department of Economics, University of Oslo 2006,18
Koopmans’s (Econometrica 28, 287–309) axiomatization of discounted utilitarianism is based on seemingly compelling conditions, yet this criterion leads to hard-to-justify outcomes. The present analysis considers a class of sustainable recursive social welfare functions within Koopmans’s general framework. This class is axiomatized by means of a weak new equity condition (“Hammond Equity for the Future”) and general existence is established. Any member of the class satisfies the key axioms of Chichilnisky’s (Social Choice and Welfare 13, 231–257) “sustainable preferences”. The analysis singles out one of Koopmans’s original conditions as particularly questionable from an ethical perspective.