Welfare Criteria: A Contrast between Gandhi an Economics and Modern Welfare Economics

Abstract

Modern welfare economics has correlated a set of welfare criteria in terms of certain marginal or optimality conditions. These conditions apply to the consumption sector as well as the production sector. If all the conditions are met, theoretically, one can say, social welfare is maximized. Essentially, it amounts to specifying certain conditions under which the resources of the community are most efficiently utilized to satisfy given wants the framework of a given distribution of income. specifically, to maximize social welfare, it is required to achieve simultaneously a subjective optimum and a physical optimum: goods must be distributed among consumers in such a way that no one can improve his position except at the expense of someone else, and products as well as factors of production must be allocated in such a way that no greater output can be produce with the same factor input. This is an overly simplified statement of welfare criteria in modern welfare economics but it will serve the purpose of this paper.