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What (If Anything) Can Economics Say About Equity?, Daniel A. Farber

Daniel A Farber

Does economics have anything to teach us about the meaning of fairness? The leading practitioners of law and economics disagree. Judge Richard Posner argues that economics is largely irrelevant to distributive issues. Posner maintains that the most useful economic measure of social welfare is cost-benefit analysis (which he calls wealth maximization). But, he observes, this economic measure "ratifies and perfects an essentially arbitrary distribution of wealth." Given an ethically acceptable initial assignment of wealth, rules based on economic efficiency may have some claim to be considered fair. On the critical issue of distributional equity, however, Posner apparently believes that economics …