Equity and the Pareto Principle: Does the Pareto Principle Have Moral Force?

Abstract

This paper was submitted to Nordicum-Mediterraneum in the wake of a call from the journal for papers having to do with Vilfredo Pareto (1848-1923), to be published in commemoration of the centenary of his death. The original version of the paper was written in 1998 but has never been published previously. It has been heavily revised in response to severe, but well-directed, peer review. The paper analyzes and criticizes the use of what is herein labeled the “Pareto Efficiency Principle” as a normative mandate justifying, or even requiring, various “Pareto-efficient” allocative decisions, and it likewise views with a fishy eye the concealed pretense that such justification is delivered by economic science. Some devices commonly used by economists to stave off criticisms of the use of Pareto efficiency as a criterion of “good”, “correct”, or normatively mandated allocative decisions are also explored.

Keywords

• pareto
• economics
• ethics