Abstract
The concept of Pareto Optimality provides Neoclassical economist with both a definition of efficiency and a narrowly defined concept of justice. By implicitly assuming Pareto Optimality to be the market norm, they effectively limit their ability to confront fundamental social issues involving need-based behaviors and their relationship to distributional issues. Health care and public safety are two basic social concerns that create particular problems for simple market-oriented solutions. A narrow focus on efficiency can also lead to policies which help to distort human relationships and diminish social welfare.
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Johnson, R.D. (2017). Social Welfare, Markets and Efficiency. In: Rediscovering Social Economics. Perspectives from Social Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-51265-5_4
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DOI: https://doi.org/10.1007/978-3-319-51265-5_4
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