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There is no optimum level of equality that can be solved for using a mathematical equation. "Optimality" always rests upon the underlying qualitative assumption

There is no optimum level of equality that can be solved for using a mathematical equation. "Optimality" always rests upon the underlying qualitative assumptions of how capital/resources should be owned, operated, and distributed to achieve the maximum welfare (for who? society? a city? a community? an individual?) over some period of time (short term? medium term? long term?). Economists regularly use "Pareto Optimality" to solve for an optimal steady state or x-possibility frontier - a state/allocation where it is impossible to make any one person better off without making another worse off. Do you think this is a fair or useful way to determine the optimal allocation of resources?

stale2002 11y ago
Pareto optimal solutions is an extremely important concept. If your solutions isn't Pareto optimal, that means we can make someone better off for Free. Of course, just because something is Pareto optimal, doesn't mean it's the best solution. But the best solution is DEFINITELY going to be Pareto optimal.
- roymurdock 11y ago
  Depends on your qualitative argument for what is "best" and, stepping backwards, what you identify and define as the "problem" that is being solved.
  - stale2002 11y ago
    The "problem" is how to make people better off. If you can make someone better off, without making anyone worse off, then you are pretty much by definitely not at the "best" solution. Because we just identified another solution that is strictly better than what we were at.
    - roymurdock 11y ago
      Right, I'm asking you to define "better".
et2o 11y ago
I think we are more or less in agreement. > There is no optimum level of equality than can be solved for using a mathematical equation This is not true: We can choose any function to maximize. As you correctly point out, the usefulness depends upon the validity of the quantity we're trying to maximize. I don't know enough to say if Pareto efficiency is optimal here or not.

stale2002 11y ago

Pareto optimal solutions is an extremely important concept. If your solutions isn't Pareto optimal, that means we can make someone better off for Free. Of course, just because something is Pareto optimal, doesn't mean it's the best solution. But the best solution is DEFINITELY going to be Pareto optimal.

roymurdock 11y ago
Depends on your qualitative argument for what is "best" and, stepping backwards, what you identify and define as the "problem" that is being solved.
- stale2002 11y ago
  The "problem" is how to make people better off. If you can make someone better off, without making anyone worse off, then you are pretty much by definitely not at the "best" solution. Because we just identified another solution that is strictly better than what we were at.
  - roymurdock 11y ago
    Right, I'm asking you to define "better".

et2o 11y ago

I think we are more or less in agreement. > There is no optimum level of equality than can be solved for using a mathematical equation This is not true: We can choose any function to maximize. As you correctly point out, the usefulness depends upon the validity of the quantity we're trying to maximize. I don't know enough to say if Pareto efficiency is optimal here or not.