Posner’s Wealth Maximization for Welfare Maximization: Separating Efficiency and Equality Considerations

Yew-Kwang Ng ()

No 1611, Economic Growth Centre Working Paper Series from Nanyang Technological University, School of Social Sciences, Economic Growth Centre

Abstract: Posner’s proposal for wealth maximization in judiciary decisions has not been widely accepted, but the influence of the economic analysis of law it propelled has increased tremendously. In the face of criticism, Posner himself has retreated into a pragmatism with wealth maximization not the only principle used. This leads to a lack of both moral justification and consistency. This paper argues that, if not used as the ultimate objective, but as an instrument for welfare maximization, wealth maximization is much more acceptable, if it is also supplemented by appropriate redistribution in the general equality policy. This is especially so as efficiency supremacy in specific issues including the judiciary (close to wealth maximization) would then make every income group better off. This is so despite the presence of disincentive effects in general redistribution. The separation of the judiciary and the legislative may then also be justified.

Keywords: Wealth maximization; efficiency; welfare; utilitarianism; judiciary. (search for similar items in EconPapers)
JEL-codes: H0 K0 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2016-11
New Economics Papers: this item is included in nep-hpe, nep-law, nep-pbe and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:nan:wpaper:1611

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