This dissertation is a theoretical exploration of whether economic methodology should shift from reductionism in traditional economic thinking on welfare to a “macro” approach, i.e. one that is based on aggregate outcomes which cannot be fully explained through reductionist perspectives of individual behaviours. Welfare economics is dominated by mainstream thinking based on reductionist perspectives of individual behaviours. Such perspectives form the basis of fundamental concepts in welfare economics yet have substantial limitations and deviate from what is measured and applied in the real world. Economics has consequences for real people, and a business-as-usual approach should not continue. Other theories beyond fundamental concepts, such as those on achieving efficiency in a world where distortions exist, social contexts affecting economic outcomes, alternate ways of evaluating economic policy, and debates on equity, highlight important elements not adequately addressed by traditional thinking in welfare economics. An alternative methodology is desired. A macro approach, i.e. one that is based on aggregated outcomes rather than reductionism, is advocated. Macro 2 concepts can be informed by theories on complex systems, human agency and alternate ontological frameworks. This is an exciting area for the future of economic thinking.