Re: Dan Bell's Welfare Options

[Keith Wilde <kwilde@magi.com>]

At 11:47 AM 11/05/1999 -0500, you wrote:
>Keith,
>
>>#2 is better than #1 on the presumption that the higher marginal utility of
>>many small winners will add up to a greater total than the lower marginal
>>utility of a few big winners.
>
>Do traditional econonomists really agree with this statement?
>If so, it certainly could be a start for moving us down the
>path to saying that ownership patterns do matter.

>Dan


It's a pretty obvious inference from utilitarianism, and I have certainly
seen the argument in economics literature of mid-century. It isn't bruited
about very much, however, probably because economists find it risky to be
biting the hands that feed them. And as Alan Zundel has observed,
utilitarianism has been attacked by social philosophers who think it crass.
Nevertheless, the idea is out there. In one of my responses to Alan a
couple of days ago I mention a paper that I once wrote for a political
philosophy prof, using the exact same utilitarian argument to show that
political democracy is Pareto optimal. I think you will find the argument
developed in "The Economics of Control" by Abba Lerner. (I haven't seen the
copy I once owned for several years now.)

Keith



>
>
Keith Wilde
Canada Pension Plan
Ottawa
kwilde@magi.com
613 990-8125 (office)
613 747-6847 (res)