Quiet Revolution in Welfare Economics

Challenging traditional welfare theory, the authors present a new framework that integrates recent advancements in microeconomic theory. They argue for a modified welfare paradigm that clarifies the interplay between individual and social rationality, appealing to both mainstream and nonmainstream economists. By utilizing concepts from labor theory, externalities, and public goods, they extend Pareto optimality into dynamic contexts, emphasizing the role of institutional bias. Their findings often contradict conventional economic beliefs, paving the way for deeper investigations into private and public enterprises.