Incommensurability and the first fundamental welfare theorem

Some claim that 'incommensurability' poses serious problems for the standard account of rationality and for the case for markets in economics. Incommensurability may indeed involve violations of basic axioms, such as completeness, transitivity and continuity. Sen's version of the maximization view of rationality avoids these problems. This view when combined with one axiom--local insatiability--allows us to prove a theorem with the same general thrust as the first fundamental welfare theorem. To this degree, the case for the market is vindicated. This result can be seen as non-welfarist because it involves a notion of 'resentment' which may be best understood in terms of opportunity. A 'standard' statement of the first welfare theorem can also be proven if we focus on quasi-orderings. Copyright 2005, Oxford University Press.