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Encyclopedia of Law and Economics pp 1–8Cite as

Wealth Maximization for Welfare: Efficiency and Equality Considerations

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Definition

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 entry shows 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.

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Authors and Affiliations

  1. School of Economics, Fudan University, Shanghai, China

    Yew-Kwang Ng

  2. Department of Economics, Monash University, Melbourne, Australia

    Yew-Kwang Ng

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  1. Yew-Kwang Ng
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Correspondence to Yew-Kwang Ng .

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Editors and Affiliations

  1. Montpellier, France

    Alain Marciano

  2. Dept DiGSPES, Univ del Piemonte Orientale Dept DiGSPES, Alessandria, Italy

    Giovanni Battista Ramello

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Ng, YK. (2022). Wealth Maximization for Welfare: Efficiency and Equality Considerations. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7883-6_612-2

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  • DOI: https://doi.org/10.1007/978-1-4614-7883-6_612-2

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  • Print ISBN: 978-1-4614-7883-6

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Chapter History

  1. Latest

    Wealth Maximization for Welfare: Efficiency and Equality Considerations
    Published:
    26 November 2021

    DOI: https://doi.org/10.1007/978-1-4614-7883-6_612-2

  2. Original

    Wealth Maximization: Efficiency and Equality Considerations
    Published:
    17 April 2018

    DOI: https://doi.org/10.1007/978-1-4614-7883-6_612-1