The Liberal Paradox: A generalisation

A largely unsolved problem in economics is what criteria should an economic policy satisfy to be desirable. The Pareto principle is the most widely used normative criterion in economics. Some recent criticisms have suggested that it is not compatible with other objectives of economic policy, most significantly that the Pareto principle conflicts with the respect of individual rights. This paper argues that the Pareto principle is not a significant cause of this conflict. Our argument is based upon a simple generalisation of the Liberal Paradox.For Comments I would like to thank Ruvin Gekker, Kevin Lang, Yew-Kwang Ng, Prasanta Pattanaik, Amartya Sen, John Wriglesworth, the referee, and the editor of this journal