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I don't know what they believed. I do know that arguing that "in principle" compensation is as good as "actual" compensation completely obviates the need for a redistribution policy.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Wed Jun 14th, 2006 at 01:00:45 PM EST
[ Parent ]
I wonder (because I haven't checked) if you're fallen into the trap set by economic ideologues who misapply the mathematical models to justify their position, in the way that the free-marketeers seem to rely on arguments about market efficiency that really aren't supportable to support their plunder and concentrate policies.

Mathematical models do not have moral content: it's the polemic constructed around the models that does.

by Colman (colman at eurotrib.com) on Wed Jun 14th, 2006 at 01:11:32 PM EST
[ Parent ]
Possibly. I also found this (my emphasis):
Within the same context, a Kaldor-Hicks improvement is defined as a change that is either a Pareto improvement or such that:
  • the "winners" from the change would be able to compensate the "losers" and still be better off (Kaldor criterion); and
  • the "losers" could not afford to bribe the "winners" to prevent the change (Hicks criterion).
Crucially, the compensation or bribe elements of the test for a Kaldor-Hicks improvement is a hypothetical one: the change is considered an improvement if the assessed winners' gain is greater than the assessed losers' loss, regardless of whether the change when implemented would actually involve the payment of any compensation.
It is definitely an improvement on Pareto to consider the possibility of side payments, as long as they actually take place, wwhich is "crucially" not the case in Kaldor-Hicks optimality.

Often Pareto optimality is an impairment to taking any action (see the effects of unanimous decision making in teh EU council, for instance), but then sometimes people just say "but see, it's not Pareto optimal but it is Kaldor-Hicks optimal, so it's ok, we can ignore the losers".

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper

by Migeru (migeru at eurotrib dot com) on Wed Jun 14th, 2006 at 01:17:50 PM EST
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