It follows that a substantial degree of income redistribution will be social desirable and that large accumulations of individual wealth, which contribute only marginally to the happiness of a small number of people are undesirable in themselves, though they may in some circumstances be a by-product of desirable policies.
A highly egalitarian allocation can be Pareto optimal.
So can any allocation where one person has all the wealth and everyone else is reduced to a bare subsistence.
They won’t be in any particular order, just tossed up for comment when I think I have something that might interest readers here.
To remind you, the core idea of the book is that of discussing all of economic policy in terms of “opportunity cost”.
Mill’s philosophical framework implied support for political democracy, including the enfranchisement of women.
Since everyone’s welfare counts equally in the classical calculus, the political process should, as far as possible, give everyone equal weight.
The supposed constancy of income distribution implies that any attempt at redistribution must be essentially futile.
Even the aim is to benefit the poor at the expense of the rich, the effect will simply be to make some people newly rich at the expense of those who are currently rich.
(Fn Supporters of Hayek and Mises commonly describe themselves as “libertarians”, but their alliance with brutal dictators makes a travesty of the term – they have been derisively described as “shmibertarian”).
Now back to “Pareto optimality”, and why it is such a misleading term.