Punpun Straussianism 9

Pareto Improvement?

Pareto Improvment

Wilfredo Pareto is a foundational economist known for inventing many concepts in early economics (he is the same guy who is known on the dissident right for being quoted in Burnham on completely different concepts). One of his inventions is Pareto improvement, or economic improvement that makes some people’s lives better without making anyone worse off. Economists have since been obsessed with Pareto improvement, since it is a way to argue for ideas or policies without forming political coalitions at all. After all, if everyone is improved, then there is no friend or enemy. 

How many things are provably, absolutely Pareto improvements across history? Some economists argue that if some people are made worse off, then paying them some share of the gains, essentially bribing them to accept progress, is a way to get Pareto improvement. But what if some people are made worse off by the fact that other people’s lives improve? 

Then the idea of Pareto improvement is nonsense. This is my greatest critique of political economy – it doesn’t go far enough! There are zero political economy papers with the balls to say “actually, some people just hate when things get better for others and no reasonable amount of making things better for themselves will compensate”. To me, this is a component that gives political economy so much more explanatory power.