JUSTICE AND SOCIAL CRITERIA
According to Pareto’s criteria, so that an action is unobjustably good from the point of view of social efficiency, no one should lose. Thus, according to Pareto, if an action has winners and losers, then the compensation by those who earn towards those who lose is essential to be able to say that the action is unequivocally good. It should be clear, in any case, that although when there is no compensation, according to Pareto’s criteria, it cannot be said that an action whose benefits are higher than its costs is unequivocally good, it cannot be said that it is bad. Pareto would declare action as ambiguous.
In general, economists use Pareto’s criteria to evaluate efficiency since an action, according to this criteria, is unequivocally good or bad. However, to decide on actions that benefit some and harm others, Kaldor’s criteria are used: if what those who earn are more than those who lose, then the action is considered good and takes. To the extent that compensation is justified to those who lose, and it is not always justified although this is another problem of equity and justice than economic efficiency – then some form of compensation is sought that is minimal.
As an example, the voluntary exchange between two parts is considered good in the sense of Pareto, and Kaldor, since they benefit those who exchange, without harming the rest of the people. This under the assumption that there are no externalities. On the other hand, the elimination of tariffs in an economy, although it is typically considered positive in the Kaldorian sense, is not good, and neither bad, in the Paretian sense, since some lose with such elimination. The above refers to the situation in which an action affects several individuals at the same time. It can also happen that an action must be decided by several people whose ways of seeing the advantages and disadvantages of an action differ.
Not by differences in their way of understanding the consequences, but by the way of assessing them. If so, the efficiency either according to Kaldor’s criteria or that of Pareto, must be understood according to the way of seeing the advantages and disadvantages, acquiring the concept of efficiency a subjective character. Utilitarian approaches, consequentialist and libertarian. The utilitarian approaches are compared below, consequentialist and libertarian. According to the first approach, a utilitarian will be based when evaluating an action on utility. In its evaluation criteria, utility refers to pleasure, happiness, satisfaction, etc. The utilitarian approach does not consider individual freedom.
The achievement or violation of rights, how the current situation was reached. Consequently, these considerations cannot alter decisions. They are only considered whether they have an effect on utility. In the libertarian approach, meanwhile, the information base to evaluate are freedoms and rights, without including happiness or utility. A. Sen considers that all approaches have something to contribute and that the main deficiency of all of them is that they focus on a limited information base. In relation to the utilitarian approach, it highlights as merits the importance of taking into account the results of an action or a social agreement when judging them.
And to the need to pay attention to the well -being of the people involved when judging social agreements and their results. To illustrate the importance of the results when analyzing an institutional policy or agreement, to. Sen resorts to the example of private property as an institution. In this regard, he points out that some consider that property rights are constitutive of individual independence and request that there are no restrictions in possession, inheritance and use, even rejecting the idea of taxing the property. Others consider that private property must be abolished for being against the idea of inequality that it generates.
In the consequentialist approach, private property will be evaluated according to its positive consequences – private property has been an engine of economic expansion and prosperity and its negative consequences, the unrestricted use of private property can contribute to enchi -poverty, it can alsobe bad to ensure environmental conservation. A. Sen also refers to the limitations of the utilitarian approach. Considers limitations: indifference to distribution. Only the sum or the aggregate is worth. Lack of consideration for rights, freedoms and other non -utilitarian concerns.
He doesn’t want happy slaves. Mental conditioning and adaptation. In relation to this point, to. Sen highlights how the ability to rejoice adapts to circumstances. As an example, it refers to oppressed minorities in intolerant communities and housewives in clearly macho cultures. The recommendations of A. Sen with respect to this point are that: a) The fact that, in the utilities scale, the deprivation of the persistently disadvantaged appears decreased;b) The creation of conditions in which people have real opportunities to judge the type of lives they want to have should be favored.
Education, health and employment are not important only in their own merit, but also because they contribute to giving people opportunities to face the world with courage and freedom. In relation to the libertarian approach, in some formulations of modern libertarian theory, certain rights are treated from personal liberties to property rights as if they had almost complete political precedence on the search for social goals, including those that would allow to end the deprivations ofMany. The rights of the least favored are considered restrictions that should not be violated.