IDEAS home Printed from https://ideas.repec.org/p/nan/wpaper/1611.html
   My bibliography  Save this paper

Posner’s Wealth Maximization for Welfare Maximization: Separating Efficiency and Equality Considerations

Author

Listed:
  • Yew-Kwang Ng

    (Division of Economics, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332.)

Abstract

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 paper argues 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.

Suggested Citation

  • Yew-Kwang Ng, 2016. "Posner’s Wealth Maximization for Welfare Maximization: Separating Efficiency and Equality Considerations," Economic Growth Centre Working Paper Series 1611, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
  • Handle: RePEc:nan:wpaper:1611
    as

    Download full text from publisher

    File URL: http://www3.ntu.edu.sg/hss2/egc/wp/2016/2016-11.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ng, Yew-Kwang, 1984. "Quasi-Pareto Social Improvements," American Economic Review, American Economic Association, vol. 74(5), pages 1033-1050, December.
    2. Posner, Richard A., 1984. "Wealth maximization and judicial decision-making," International Review of Law and Economics, Elsevier, vol. 4(2), pages 131-135, December.
    3. Kaplow, Louis & Shavell, Steven, 1994. "Why the Legal System Is Less Efficient Than the Income Tax in Redistributing Income," The Journal of Legal Studies, University of Chicago Press, vol. 23(2), pages 667-681, June.
    4. Sen, Amartya K, 1973. "On Ignorance and Equal Distribution," American Economic Review, American Economic Association, vol. 63(5), pages 1022-1024, December.
    5. Ng, Yew-Kwang, 1997. "A Case for Happiness, Cardinalism, and Interpersonal Comparability," Economic Journal, Royal Economic Society, vol. 107(445), pages 1848-1858, November.
    6. Yew-Kwang Ng, 1975. "Bentham or Bergson? Finite Sensibility, Utility Functions and Social Welfare Functions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(4), pages 545-569.
    7. Ng, Yew-Kwang, 1990. "Welfarism and Utilitarianism: A Rehabilitation," Utilitas, Cambridge University Press, vol. 2(2), pages 171-193, November.
    8. Veljanovski, Cento G., 1981. "Wealth maximization, law and ethics--On the limits of economic efficiency," International Review of Law and Economics, Elsevier, vol. 1(1), pages 5-28, June.
    9. Ng, Yew-Kwang, 1989. "What Should We Do About Future Generations?," Economics and Philosophy, Cambridge University Press, vol. 5(2), pages 235-253, October.
    10. Yew-Kwang Ng, 1996. "Happiness surveys: Some comparability issues and an exploratory survey based on just perceivable increments," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 38(1), pages 1-27, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Songtao Wang & Bin Li & Tristan Kenderdine, 2019. "Towards a Utilitarian Social Welfare Function¡ªIncome Inequality and National Welfare Growth in China," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(3), pages 344-358, December.
    2. Yew-Kwang NG, 2016. "Extending Economic Analysis to Analyze Policy Issues More Broadly," Economic Growth Centre Working Paper Series 1609, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
    3. W. Max Corden & Peter Forsyth & Christis G. Tombazos, 2008. "Distinguished Fellow of the Economic Society of Australia, 2007: Yew‐Kwang Ng," The Economic Record, The Economic Society of Australia, vol. 84(265), pages 267-272, June.
    4. Rafael Di Tella & Robert J. MacCulloch & Andrew J. Oswald, 2003. "The Macroeconomics of Happiness," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 809-827, November.
    5. Yew‐Kwang Ng, 2008. "Happiness Studies: Ways to Improve Comparability and Some Public Policy Implications," The Economic Record, The Economic Society of Australia, vol. 84(265), pages 253-266, June.
    6. David G. Blanchflower & Andrew J. Oswald, 2005. "Happiness and the Human Development Index: The Paradox of Australia," NBER Working Papers 11416, National Bureau of Economic Research, Inc.
    7. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    8. Yew-Kwang Ng, 2008. "Environmentally Responsible Happy Nation Index: Towards an Internationally Acceptable National Success Indicator," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 85(3), pages 425-446, February.
    9. Yew-Kwang Ng, 1996. "Happiness surveys: Some comparability issues and an exploratory survey based on just perceivable increments," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 38(1), pages 1-27, May.
    10. Indranil Dutta & James Foster, 2011. "Inequality of Happiness in US: 1972-2008," Economics Discussion Paper Series 1110, Economics, The University of Manchester.
    11. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    12. Jiayuan Li & John Raine, 2014. "The Time Trend of Life Satisfaction in China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 116(2), pages 409-427, April.
    13. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
    14. Ada Ferrer-i-Carbonell, 2013. "Happiness economics," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(1), pages 35-60, March.
    15. Ada Ferrer-i-Carbonell, 2002. "Income and Well-being," Tinbergen Institute Discussion Papers 02-019/3, Tinbergen Institute.
    16. Beja Jr, Edsel, 2012. "Who is happier: Housewife or working wife?," MPRA Paper 40533, University Library of Munich, Germany.
    17. Yew‐Kwang Ng, 1981. "Bentham or Nash? On the Acceptable Form of Social Welfare Functions," The Economic Record, The Economic Society of Australia, vol. 57(3), pages 238-250, September.
    18. Ng, Yew-Kwang, 2018. "Ten rules for public economic policy," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 32-42.
    19. Shiri Cohen Kaminitz, 2018. "Happiness Studies and the Problem of Interpersonal Comparisons of Satisfaction: Two Histories, Three Approaches," Journal of Happiness Studies, Springer, vol. 19(2), pages 423-442, February.
    20. Frey Bruno S. & Stutzer Alois, 2000. "Maximizing Happiness?," German Economic Review, De Gruyter, vol. 1(2), pages 145-167, May.

    More about this item

    Keywords

    Wealth maximization; efficiency; welfare; utilitarianism; judiciary.;
    All these keywords.

    JEL classification:

    • K0 - Law and Economics - - General
    • H0 - Public Economics - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nan:wpaper:1611. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Magdalene Lim (email available below). General contact details of provider: https://edirc.repec.org/data/dentusg.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.