> Does this mean you reject notions of Pareto optimality?
Yes. And I reject methodological individualism, neoclassical welfare economics, neoclassical theory of distribution, the whole neoclassical notion of "utility", the theory of supply and demand, etc.
> Does it mean
> you think that discussions of things like efficiency should not
> stand alongside things like justice?
It depends what you mean by "efficiency." This whole thing started out as an issue of whether public sector activity should be judged by the same criteria as private sector activity. I say no. The public sector should not impose on itself the kinds of contraints that capitalist competition imposes on firms. The State should use its greater discretion in this regard as a tool tp promote the social good. This does not mean that I think there should be no criteria for making decisions about public sector activity.
Now some of the conversation has moved to more general issues than that specific question. So, yes I actually don't adhere to the whole neoclassical microeconomic view of "efficiency" of firms either.
> If yes, why so? I thought notions of Pareto efficiency, were
> unproblematic.
No, I think it is very problematic. But either I can recommend some articles/books to you or you'd have to give me time towrite up a summary or something.
By the way, although I admire Albert and Hahnel's work (I had their older books a long time ago and though I can't say I've really studied their newer stuff I respect their efforts and the general spirit) I was on a panel with Hahnel on environmental policy once and was surprised and struck at how neoclassical his paper was.
Mat
> Shouldn't we desire a just *and* efficient economy?
>
> Hahnel and Albert, in their *Quiet Revolution in Welfare Economics*,
> "find no fault with the concept of Pareto optimality as a
> formalization of the intuitive notion of social efficiency." (64)
> Elsewhere, Hahnel quotes Sam Bowles to the effect that, yes, there are
> other things besides efficiency that we must worry about:
>
> Even if market allocations did yield Pareto-optimal results, and
> even if the resulting income distribution was thought to be fair
> (two very big "ifs"), the market would still fail if it supported
> an undemocratic structure of power or if it rewarded greed,
> opportunism, political passivity, and indifference toward others.
> The central idea here is that our evaluation of markets -- and
> with it the concept of market failure -- must be expanded to
> include the effects of markets on both the structure of power and
> the process of human development. As anthropologists have long
> stressed, how we regulate our exchanges and coordinate our
> disparate economic activities influences what kind of people we
> become. Markets may be considered to be social settings that
> foster specific types of personal development and penalize
> others.... The beauty of the market, some would say, is precisely
> this: It works well even if people are indifferent toward one
> another. And it does not require complex communication or even
> trust among its participants. But that is also the problem. The
> economy -- its markets, work places and other sites -- is a
> gigantic school. Its rewards encourage the development of
> particular skills and attitudes while other potentials lay fallow
> or atrophy. We learn to function in these environments, and in so
> doing become someone we might not have become in a different
> setting.... By economizing on valuable traits -- feelings of
> solidarity with others, the ability to empathize, the capacity
> for complex communication and collective decision making, for
> example -- markets are said to cope with the scarcity of these
> worthy traits. But in the long run markets contribute to their
> erosion and even disappearance. What looks like a hardheaded
> adaptation to the infirmity of human nature may in fact be part
> of the problem.
>
> Bill