The Review of Black Political Economy

, Volume 44, Issue 3–4, pp 363–377 | Cite as

Exploitation and Efficiency

Article
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Abstract

Let us take any historical or contemporary economic society. Would economic efficiency become better if such society erects and enforces institutions that prohibit its members from the exploitation of excludable groups that can be defined by race, ethnicity, etc.? This question actually makes no sense. One must first identity the boundary of society, i.e., who make up the objective function. Irrespective of how one defines efficiency, one cannot assess the efficiency of institutions without determining who is covered and who is excluded. Efficiency judgments can make sense only when one defines the social boundary.

Keywords

Hicks-Kaldor Welfare Criterion Injustice Collective Welfare Function Altruism Radical Social Theory Inter-society Utility Comparison Externality vs. Pecuniary Externality 

JEL Classification

N00 A13 B41 D71 

Notes

Acknowledgments

Earlier versions benefited from comments of participants at the Korea Institution and Economics Association meeting, Alan Wertheimer, Nichloas Feltovich, Alain Marciano, Yew-Kwang Ng, Michael Niekamp, John Thrasher, Deirdre McCloskey, Bart Nooteboom, Harold Jones, Ian McDonald, Gary Magee, and anonymous referees. The usual caveat applies.

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Copyright information

© Springer Science+Business Media, LLC 2017

Authors and Affiliations

  1. 1.Department of EconomicsMonash UniversityClaytonAustralia

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