Can economics rank slavery against free labor in terms of efficiency?

Lawrence White ()

Politics, Philosophy & Economics, 2008, vol. 7, issue 3, 327-340

Abstract: The standard allocative efficiency criteria used by economists (Pareto efficiency and Kaldor-Hicks efficiency) are fundamentally unable to rank a slave-labor system against a free-labor system. Given either set of initial property rights assignments the market can reach (or fail to reach) allocative efficiency (that is, allocate resources to their highest-valued uses), but welfare economics provides no meta-framework for ranking initial assignments. This finding underscores the limits to the usefulness of efficiency criteria: they cannot settle all questions, and unfortunately are least decisive just where the stakes are greatest (namely, where wealth effects of alternative assignments are greatest). Explicitly ethical criteria are needed to make the ranking.

Keywords: Pareto efficiency; Kaldor-Hicks efficiency; property rights; welfare economics (search for similar items in EconPapers)
Date: 2008
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/1470594X08092106 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:pophec:v:7:y:2008:i:3:p:327-340

DOI: 10.1177/1470594X08092106

Access Statistics for this article

More articles in Politics, Philosophy & Economics
Bibliographic data for series maintained by SAGE Publications ().