The Pareto Optimum: Reconcilable with Social Thought?

Abstract

The Pareto optimum is usually described as a production or an exchange situation, or some combination, where no further improvement can be made to the position of one participant without harming that of another, and movements toward it are termed “efficient”. Perhaps most economists take the opening premise, that good is what the individual wants, in guarded fashion and view the technical demonstration of improvements in exchange and production situations as curious devices which nevertheless offer people with different philosophies of the good a rigorous method for agreeing on what is better. Now, it is my purpose in this article to argue that the substance and techniques of Pareto‐type reasoning cannot be reconciled with social as opposed to individualistic thought; and to sustain this view I shall (i) recall the substance of Pareto's argument (ii) outline several key objections to it (iii) examine the meaning of “social”, and (iv) criticise versions of altruism offered by Hockman and Rodgers and Becker.

Citation

McKee, A.F. (1980), "The Pareto Optimum: Reconcilable with Social Thought?", International Journal of Social Economics, Vol. 7 No. 7, pp. 366-375. https://doi.org/10.1108/eb013878