Comments Elsewhere

David, I’m well aware of the technical definitions of “efficiency” in economics and of the party line that given these technical definitions, economic claims about efficiency are strictly non-normative. But I’m disputing that party line, and what I’m asking for is an elaboration of those definitions that doesn’t fall back on normative terms. (As for Samuelson, I think there is simply philosophical confusion, both by him and by his colleagues, about what he is doing. He might very well think that his claims about economic efficiency are strictly non-normative claims; but that’s hardly demonstrated by his endorsement of policies he knows to be economically inefficient on other grounds. That only demonstrates that he thinks that there are other norms that trump whatever normative weight “economic efficiency” may or may not carry.)

For example, Pareto efficiency is standardly defined as a situation in which no further Pareto improvements are available, and a Pareto improvement is defined as a change that makes at least one person better off and nobody worse off. But “better off” and “worse off” are themselves normative terms. Schuele specifies that he means to refer to Kaldor-Hicks efficiency. But Kaldor-Hicks efficiency is standardly defined by direct reference to Pareto efficiency. Scott didn’t use the standard definition for K-H efficiency, but instead glossed it in terms of “wealth,” but “wealth” is itself a normative term. (Having a large pile of something only counts as being wealthy if the thing you’ve piled up is a good thing to have lots of.)

So the challenge is: explain to me what Schuele meant, or plausibly could have meant, by “economically efficient” without falling back on normative language. If you are using Kaldor-Hicks efficiency as standardly defined, or as glossed by Scott, you will have to explain how you are using the terms “better off,” “worse off,” “wealth,” or whatever in such a way that they are not in fact normative, in spite of appearances.