A Capability Approach for the European Union

The aim of this paper is to develop a new concept for the EU in order to define and measure poverty no longer on the basis of income1, but on so called capabilities to argue for a capability oriented social policy. The capability approach (CA) was originally developed by Nobel laureate Amartya Sen2 and can be interpreted as critique of the utilitarian tradition of standard economics. In Sen's view, mainstream economic analysis operates on a very narrow base and does not include central information about the human condition. The main points of Sen's critique shall be discussed by way of introduction in section one. In offering an alternative framework of economic evaluation, Sen is very much inspired by the work of Adam Smith (1723-1790) and tried to bring him back into the economic and social discussion. The connections between Smith and Sen and the main elements of the CA will be discussed in section two. (...)