ADVANTAGES

(iii) Equality distorts incentives promoting achievement in theeconomic field, producing an inefficiency grounded in a waste ofassets arising from the administrative costs of redistribution (Okun1975). Equality and efficiency need to be placed in a balancedrelation. Often, pareto-optimality is demanded in this respect— for the most part by economists. A social condition ispareto-optimal or pareto-efficient when it is not possible to shift toanother condition judged better by at least one person and worse bynone (Sen 1970, chap. 2, 2*). A widely discussed alternative to thePareto principle is the Kaldor-Hicks welfare criterion. Thisstipulates that a rise in social welfare is always present when thebenefits accruing through the distribution of value in a societyexceed the corresponding costs. A change thus becomes desirable whenthe winners in such a change could compensate the losers for theirlosses and still retain a substantial profit. In contrast to thePareto-criterion, the Kaldor-Hicks criterion contains a compensationrule (Kaldor 1939). For purposes of economic analysis, suchtheoretical models of optimal efficiency make a great deal ofsense. However, the analysis is always made relative to startingsituation that can be unjust and unequal. A society can thus be (closeto) pareto-optimality — i.e., no one can increase his or hermaterial goods or freedoms without diminishing those of someone else— while also displaying enormous inequalities in thedistribution of the same goods and freedoms. For this reason,egalitarians claim that it may be necessary to reducepareto-optimality for the sake of justice if there is no moreegalitarian distribution that is also pareto-optimal. In the eyes oftheir critics, equality of whatever kind should not lead to somepeople having to do with less even though this equalizing down doesnot benefit any of those who are in a worse position.

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