The theory of Pigou's welfare. Efficiency and social justice. Optimum on Pareto. Theory of Economic Welfare A. Pig Economic Welfare Theory gives the opportunity
Ticket 26. Economic theory well-being: two approaches to the concept of public welfare (Pareto and Pigou)
Microeconomic well-being theory is associated with the study of such activities of the economy, which provide the company to maximize wealth or, as modern science, economic well-being. The subject of this section of economic science can be defined as the comparison of alternative state of the economy. As the economy of well-being, for the most part, consists of a value judgment, the truth of which can not be verified by empirical methods, as is done in the positive areas, it can be carried to regulatory the economic Science.
The main problem in this area is to determine social welfare. What criteria can be judged by the welfare of society and who should make decisions affecting public well-being?
The most famous is the criterion J. BenthamAccording to which the well-being is determined by the happiness of the greatest number of people, ie, summing meet members of the community and maximizing the amount, we'll get the greatest wealth. In connection with the use of this criterion, there are problems both subjective and objective nature. The first group of problems belongs that different people are different about the same phenomena of life: what is good for one, then for another bad. The objective problem is the difference in the position of different members of society under the same economic conditions. Accordingly, any change affects different people in different ways. In view of these considerations, the question is, who is to address issues that affect the welfare of the society: the dictator, the majority of members of society, or that part of it, the intensity of which preference is the greatest? The answers to these questions need to be addressed the key for this field of research problem, namely, interpersonal comparisons of utility and aggregating individual preferences. Because utility - it is subjectively experienced satisfaction gradually economists acknowledged that the issue of interpersonal comparison of utility is essentially an unsolvable problem. For the same reason it is impossible, and the aggregation of individual preferences.
I. Bentham proclaimed as the only purpose of any government "Providing the greatest happiness of the greatest number of people." But how? A fundamentally different response to this question is given by the authors of the two most famous theories of economic well-being - Italian economist V.Paretho and English economist A.Piga.
Pareto theory
According to its economic views Pareto (1848-1923)it can be attributed to the members of the Lausanne School of Economics. Like Walras, Pareto considered the political savings in a kind of mechanical mechanics revealing the processes of economic interactions based on the theory of equilibrium. In his opinion, this science should explore the mechanism establishing the balance between the needs of people and the limited means of their satisfaction. A significant contribution was made by Pareto in the development of the theory of consumer behavior, introducing instead a quantitative notion of subjective utility - sequence, which meant the transition from kardinalistkoy to ordinalistkoy version of the theory of marginal utility. 2 Further, instead of individual matching ordinal utility Pareto benefits offered their comparison sets where still preferred kits described indifference curves. Pareto opinion, there is always a combination of the values \u200b\u200bat which the consumer does not matter in what proportion it will get them as long as the sum of these values \u200b\u200bis not subjected to change and bring maximum satisfaction. These provisions Pareto formed the basis modern theory consumer behavior.
But the most famous Pareto with its principle of optimality, which was called "Optimum Pareto", which lay down the so-called new economy Welfare. Pareto Optimum states that social welfare is maximized, and the allocation of resources is optimal, if there is any change in this distribution worsens the welfare of at least one subject of economic system. In a situation that is optimal by Pareto, it is impossible to improve the position of any participant in the economic process, at the same time not reducing the well-being of at least one of the others. This state of the market called Pareto-optimalcondition. According to the criterion of Pareto (criterion for the growth of public welfare), movement towards the optimum is possible only with such a distribution of resources, which increases the well-being of at least one person, nor damaging anyone else.
The initial package of the Pareto theorem was the views of Bentam and other early representatives of utilitarianism from among economists that happiness (considered as pleasure or utility) of different people are comparable and additive, that is, they can be summed into some overall happiness of all. And, Pareto optimality criterion is not total utility maximization and its maximization for each individual within the possession of certain initial stock of goods.
On the assumption of rational behavior of individuals, we assume that the firm in the manufacturing process uses a set of production capacity, which would give it the maximum difference between gross revenues and costs. Consumers, in turn, acquires a set of products that will provide him a utility maximization. The equilibrium state of the system involves the optimization objective functions (the consumer - utility maximization, the entrepreneur - profit maximization). This is the pass-optimal state of the market. It means that when all market participants, seeking everyone to their benefit, achieve a mutual equilibrium of interests and benefits, the total satisfaction (the overall function of utility) reaches its maximum. And this is almost what A. Smita was talking about in his famous passage about the "invisible hand" (though, not in terms of utility, but in terms of wealth). Later it was really prove a theorem that the general market equilibrium is Pareto-optimal market conditions.
So the point of Pareto views can be reduced to two statements:
1), any competitive equilibrium is optimal (the direct theorem)
2) optimum may be reached competitive equilibrium, that means that the selected basis of some criteria optimum best way is achieved through the market mechanism (reverse theorem).
In other words, the condition of the optimum target functions and provides balance in all markets. Optimization objective functions, Pareto, means choosing the best alternative of all possible all participants in the economic process. However, it should be noted that the choice of each individual depends on the prices and the initial volume of goods, which it has, and varying the initial distribution of benefits we change and equilibrium distribution, and prices. 3 It follows that the market equilibrium is the best position in the framework of the already formed distribution system and the Pareto model involves the immunity of society to inequality. Such an approach will become more understandable, if you take into account the "Pareto law", or the law of income distribution. On the basis of studying the statistics of several countries in different historical epochs Pareto found that the distribution of income above a certain value retains considerable resistance, and it shows in his view, the uneven distribution of natural human abilities, rather than imperfection social conditions. From this it followed an extremely skeptical attitude Pareto to social transformation of society.
However, it is difficult to challenge the position that the optimum, Pareto, very often socially unacceptable 4. Therefore, even in line with the neoclassical direction political economy Other well-being theories are formed.
The theory of Pigou
According to Pareto's views, perfect competition will ensure the maximization of the utility function in society-wide 5. However, in the early twentieth century, there were some doubts about the truth of the situation. In this respect, mention should be made of the views of the English economist Sidrvika (1838-1900), which for the first time began to consider such concepts as wealth and well-being both from the position of society and from the position of a separate individual, making the emphasis on the fact that the same concepts have different meanings depending on whether we look at them with public or individual points of view. Therefore Sidgwick accumulated stock of material resources (which was a wealth synonymous with the classics) and the wealth of society, its real income are not the same value. As you know, in the classical school of political economy of Adam Smith is axiomatic position that everyone pursuing their own benefit, at the same time serving the interests of society (the essence of the principle of the "invisible hand." - author's note). Sidgwick also brings simple, the now textbook examples mismatch private and social benefits 6 and concludes that in order to effectively address the many types of manufacturing problems require government intervention in one form or another. According to the Syrvik, the shortcomings of the system of "natural freedom" in an even more convex form are manifested in the distribution system, excessive income inequality. Anticipating economists of the twentieth century, he writes that a more uniform distribution of the created wealth increases the overall level of well-being.
The problems of the welfare of the study was devoted to the work of another eminent English economist, a representative of the Cambridge school A.Pigu (1877-1959), whose book "welfare economics" was published in 1924. The aim of his research Pigou has set the development of practical tools for the well-being based on assumptions of neoclassical theory: the theory of diminishing marginal utility, subjective psychological approach in the evaluation of the benefits and the principle of utilitarianism. It is possible to say with full right that the peg completed the creation of a neoclassical theory of well-being.
In the center of the theory of Pig, the concept of a national dividend, or national income, considered as a pure product of society, as many material goods and services purchased for money. And this figure Pigou considers not only a measure of production efficiency, but also a measure of social welfare 7. As you can see, the approach to the well-being of Pigou problem involves looking from the position of the whole of society, not the individual. But, curiously enough, this approach is applied with the use of concepts such as individual function meet, private benefits from the production and etc.
In Pigou within its concept he drew attention to the fact that the concept of individual welfare is broader than the purely economic aspects. In addition to the maximum utility from consumption, it includes components such as the nature of the work, environmental conditions, relationships with other people, social status, living conditions, public order and security. In each of these aspects of a person may feel satisfied to a greater or lesser extent. To date, these characteristics are combined into such a concept as "quality of life". However, determining the quality of life faces significant difficulties associated with the inability to measure the utility 8. Pigou repeatedly emphasizes that the national dividend size do not accurately reflect the level of general well-being, as many of the elements of quality of life, have no monetary value, however, are real factors of well-being. Therefore, there are situations in general well-growth at a constant level economic well 9. Nevertheless, in general, Pigou concludes "... qualitative conclusion about the impact of economic factors on the economic well-being is also true with regard to the general welfare."
But Pigou on the overall level of welfare is affected not only the magnitude of the national dividend, but also the principles of its distribution. Based on the law of decreasing utmost utility, he puts forward the thesis that the transfer of part of income from the rich to the poor increases the amount of overall well-being. 10
On the basis of these parcels, Pig has developed its theory of taxation and subsidies, where the main principle of taxation is the principle of the smallest cumulative victim, that is, equality of ultimate victims for all members of society, which corresponds to the progressive tax system. It should be noted that justifying progressive taxation, that is, speaking for alignment through taxes of the sizes of disposable income, the peg consciously or unconsciously proceeded from the hypothesis about the sameness of individual utility utility functions. 11 It follows from this hypothesis that a large tax rate for high incomes means approximately the same utility loss for high-yield groups of the population as a lower tax rate for low-income groups. Arguments Pigouvian based on the second Gossen law, according to which the maximum utility is attained when the condition of equality of marginal utilities based on the last consumed currency, in the present case - by the unit of disposable income.
In the aspect of the distribution problems considering Pigou and the question of the relationship between the economic interests of society and the individual. At a certain conflict of private and public interests to pay attention G.Sidzhvik. Developing his views, Pig put the task of finding theoretical foundations for the resolution of such conflicts. As already noted, the piga, the size of the gross national product does not accurately reflect the level of overall well-being, since the state of the environment, and the nature of the work, and the forms of leisure, etc. are real welfare factors and possibly a change in the level of overall well-being at a constant level of economic welfare. Especially in detail in connection with this Pig, the situation analyzes when the activities of the enterprise and the consumer have the so-called "external effects", which do not have a monetary measure, but on well-being, however, really affect. As a textbook example of the negative "externalities" can be pollution cause the environment as a result of the industrial activity of the enterprises. Pigou points out that, depending on the sign of the external effects of public spending and the results can be either more or less private 12. key concept Peep concept is just the diviggen (discontinuity) between private benefits and costs, acting as the result of economic decisions of individuals, on the one hand, and public benefits and costs falling out to each other - on the other. The object of the closest attention of the peer was situations when the public costs of production of goods were more private costs of its manufacturer. As a result, a private offer, subject to profitable motifs, was inadequate to be optimal from the point of view of the whole society, the distribution of resources for various industries of production 13. According to Pigou, each made goods is necessary to satisfy the condition that the marginal social benefit that reflects the amount that all people want to pay for all the benefits of the additional unit is equal to marginal social cost, ie the amount that people would be willing to pay for alternative use of resources. In cases where the marginal social benefit exceeds the marginal private benefit, the government should subsidize the production of this product. When the marginal social cost exceeds the marginal private cost, the government should tax the economic activity associated with additional social costs (eg emission of smoke from industrial activities) to private costs and the price of goods reflected would then these costs. As you can see, the maximization of public welfare, on Pig, suggests not only the system of progressive taxation of income, but also the measurement of the so-called "external effects" and the organization of the redistribution of funds through the state budget mechanism. In other words, in the PEIG model, in the calculation of welfare, among other things, discrepancies between the utmost private product and the utmost social product and the side negative effects of economic activity should be taxed, which in the future received the name "Taxation in the Spirit of Pig".
It is interesting in welfare theory, Pigou and concluded that it makes the recognition of the theory of interest, developed by representatives of the Austrian school of Böhm-Bawerk. As you remember, in the interest of the theory is seen as a reward for waiting in a future preference for current benefits. Recognizing that our gift of foresight is imperfect and we estimate future benefits on a decreasing scale (with the exception of the periods of revolutionary enthusiasm) Pig concludes about the difficulties of the implementation of large-scale investment projects with a long payback period (including investments in education) and wastefulness in use natural resources. This proves that the system of "free market" creates conflicts not only between private and public interest, but also conflicts within public interest: between the advantage of the current moment and the interests of future generations. This implies quite a logical conclusion that the state should not only ensure maximizing public welfare through the mechanism of redistribution of income and the accounting of "external effects", but also to ensure the development of fundamental science, education, to carry out environmental projects, protecting "the interests of the future".
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Theme 3. THEORY OF PUBLIC WELFARE
3.1. The emergence of the welfare theory
3.2. State "welfare"
3.3. Factors welfare policy
3.4. Contradictions of consumer society and their overcoming
Theoretical ideas about achieving welfare in Ukraine
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The emergence of the welfare theory
Economic development of any society due to its needs, and when trying to analyze the long-term changes in the economic system of a large, attention inevitably focuses on the well-being of society settings. Arguably, if limited to the average data for the last century, that there is a long-term trend overall growth Welfare of peoples based on economic growth in the world. The amount of global GDP made on average per capita in 2000 in 2000 increased by 4.7 times, including 6.6 times developed countries. But the average integral numbers - always the thing is quite conditional.
Welfare - providing the population of the state, social group or class, the family, the individual needs to live material, social and spiritual benefits.
The well-being is directly dependent on the level of development of productive forces and the nature of economic relations. The higher the level of development of productive forces, the faster increases welfare.
To an even greater degree of well-being due to the effectiveness of social and economic policies in a given society.
Feeling people of well-being are due to historically and depend on dominant in a particular time and in a particular place of criteria for the assessment of human well-being. The duality of assessments of the welfare factor in economic development - the presence in estimates of the general, sustainable and at the same time private, historically concrete - greatly complicates the understanding of the evolution of economic systems in the coordinates of extensive time. And yet it is precisely the criteria for the well-being of the people are the most objective base of public assessment of concepts and specific trajectories of transforming the economy of countries and regions of the world.
Stable components of well-being indicators associated with the immutability of many kinds of basic needs of people, and this makes it possible to assess the welfare of the dynamics in terms of elevation of growth. Welfare due to the continuity of the criteria receives an adequate value measurement, and its levels become comparable in time as aggregate values. It is important that these characteristics of well-being can be given in organic communication with the objective parameters of economic growth. Their assessment (in relation to a specific historical era) is carried out in different countriesah according to the same procedures in principle, even if these countries are of different types of socio-political systems. This implies the possibility of a constant comparison of levels of economic development of various countries in the parameters of people's welfare. Only need to account for that in the long term data comparisons are not always perfect.
A long period of history has been associated with human struggle for survival. The interests of people were concentrated around the satisfaction of elementary needs, and could not be a speech about the state welfare policy. The life of the slave and the lord was too straightened. And only passing through technological revolutions, significantly improved productivity, as well as through many social speeches of the people for improving living conditions, humanity approached the very question of the policy of welfare as a development of development itself national economies. This possibility was at the industrial stage of capitalist society, and once formed the proletariat as a social and political force, and after a rather unfolded a mass movement to defend the working people of their social rights to conquer the class. A huge impact on these processes had and practice of formation of the socialist system in a number of countries.
Thus, the idea of \u200b\u200beconomic development due to the well-being of people born as a result of arduous social development. It is summarized and entrepreneurial actions to improve production efficiency, and the social struggle of the people for their position and law. Only on the highly developed stage of the capitalist economy, the need for theoretical substantiation of welfare factor in economic processes was implemented.
It is believed that in scientific and theoretical terms, welfare issues in relation to the market economy were developed in detail as part of the theory of general equilibrium.
Arthur Pigou (1877-1959 gg.) Is one of the founders of "human relations theory" in the industry, implemented based on the neo-classical ideas of free competition.
On the basis of this approach, there is a fairly complete system of theoretical developments in the field of "public welfare economics" which is based on the principle of the key role of consumers in markets and sells in this aspect of the normal approach to the economy. It must be noted that in this approach the achievement of social welfare based on the theoretical possibilities of the market mechanism to move to a state of competitive equilibrium with "Pareto optimal" allocation of resources.
The principle of "Pareto efficiency" presupposes a commitment to this state of the economy, no one can improve their welfare without compromising the well-being of someone else. Welfare factor appears with a decisive circumstance. But this principle of distribution applies only to those subjects of the Company, which are involved in equal terms in market competitive relations and which are not disposed of applicants from the circle in total resources. As for the victims of the defeat in a competitive struggle, or at all unable to participate in it, then for them, the achievement of welfare in accordance with the principle of pass-efficiency is not envisaged. There need other mechanisms.
Thus, the concept of justice seems to be in the market distribution is present, but it is very specific, because it is based on the abstraction of the needs of the poor and needy. Any attempt to implement social justice in the society with the inclusion of the entire population on the basis of purely market relations are futile. In developed countries, the problem in view of the danger of social revolution for some time now become systematically overcome by the fact that the rich are "divided" with the poor.
In fact, the principle of creating a state of universal well-being was nominated as a protective reaction primarily rich to eliminate conflict situations.
In reality, in the capitalist society, the goal of public welfare growth becomes the landmarks of the economy only to the measure of the properties of competitive relations and, depending on the consolidation of the forces of the labor nation in the nomination of social requirements, from the development of the trade union movement, from democratic traditions in a particular country. The degree of opposition of economic interests peculiar to different layers in the society, and the relation of forces between them define the specific changes of the trajectory of the bulk human welfare. Therefore, during periods of active welfare level, was influenced by the consolidation of the interests of the broad strata of the people, within the framework of the capitalist system followed by periods of attack on the social rights of working people from the business class.
Certain influence on the degree of presence in the country's economic well-being of the people of the policy components have external circumstances. For example, a significant turn to the social needs of people in the policies of developed capitalist countries since the mid XX century., Generally recognized, promoted the very existence of the socialist economic system, led by the Soviet Union, where the promotion of social services at the time were quite impressive for the world community. It would be great simplification to consider such socialist practice only by a zigzag of history, without seeing a regular need - the human aspiration in society towards equality and justice in the aggregate consumption of natural and reproducible resources. It is impossible not to recognize the actual priority in the development of issues of the theory of well-being, which belongs to a scientific economic school focusing on the socialist principles of building an economy. Proceedings of K. Marx and his followers anticipated the formulation of the organic connection of welfare objectives with the goals of the economy, subsequently A. Pig and others. Implemented within the framework of the Marx Theory of Development and today periodically require practices depending on the political climate in specific countries.
In general, the ideals of the growth of people's welfare and theoretical justifications, but this occasion was not accidental and have a long history of their applicability in practical life. This is evidenced by the sustainable traditions of governments, which have developed in some respectable countries, for example, in Sweden, adhere to the economic policy of the principles of the social state. This also indicates the presence of almost all developed countries of parties of socialist and social democratic orientation in the spectrum of political forces.
The theory of social welfare - theory regarding methods of studying the organization of economic activities aimed at maximizing wealth.
Introduction
In the transition of the economy to market regulation of economic activity becomes important to achieve the growth of social welfare. Ensuring the growth of welfare of the population is mainly to meet the needs that are quantitatively grow and change qualitatively. At the same time, a particularly important role is played by the close relationship between the needs of a separate citizen (individual) and society as a whole. Welfare theory is customary to regulatory economyBecause the truth of this concept is difficult to verify empirical methods. The main problem - to study the welfare criteria and determine who should make decisions that affect the well-being. The welfare theories often had conflicts due to the inability to fully trace the effects of government programs, as well as due to differences in views on the nature of the economy, values \u200b\u200band goals. Since the main goal of "welfare policy" - is to improve the quality of life, the foundation of social welfare is the social protection of citizens. It is the quality of life that is the main indicator of public welfare.
Various views on the theory of public well-being
An American scientist is recognized as one of the bright representatives of the theory of public welfare Abraham Maslow, author of the well-known hierarchy of needs (Maslow's hierarchy of needs). According to this approach, anyone committed to their development, in accordance with their capabilities and needs. The essence of the idea of \u200b\u200bMaslow is that the higher needs can not be realized and if the primitive may have been previously satisfied.
J. Godfru classical pyramid added cognitive and aesthetic needs (need for coherence, justice, beauty, symmetry), placing them in front of the need for self-realization.
Adam Smith (1723-1790) saw the well-being depending on the productivity of social labor and its proportionality needs of consumers, considering the welfare of the source of wages, profits, rents, and their values \u200b\u200bare considered dependent general conditions The life of society, from its wealth or poverty, prosperity, stagnation or decline, nature of nature, of a particular application of labor or capital.
According to Jeremy Bentam (1748-1832), welfare is determined by the happiness of the greatest number of people. In his concept of man it is only the consumer, and aimed at the immediate satisfaction of needs. The more happy people, the greater well-being. This "arithmetic of happiness" was founded on the premise that all people have identical functions utility of income. The theory of Bentama was not perceived by his contemporaries.
Marshall linked with social welfare resource allocation mechanism and concluded that the balance of supply and demand on the market is the maximization of total benefits received by buyers and sellers. The economic surplus is measured by a consumer, that is the amount that consumers are willing to pay for the goods, minus the amount they actually pay. This surplus determines the benefits that customers get from using the product, so that they themselves are.
Arthur Pigou In the work "Economic Theory of Welfare" for the first time used the concept of indicators of public (economic) well-being. In the concept of individual well-being, he introduced performance indicators - environmental conditions, recreation, availability of education, public order, medical care, etc. He believed that optimum welfare is possible only under state intervention in the mechanism of use of resources and income distribution (since income leveling maximizes The amount of utility in society) and emphasized that economic in no way is equivalent to the overall well-being, since it does not contain elements such as the environment, relationships between people, a place in society, housing conditions, public order. A.Pigu devoted considerable attention to the redistribution of income from rich to poor - income transfers.
John Maynard Keynes (1883-1946) It was confident that the level of welfare determines the state, affecting the level of employment of resources and the amount of national income. He introduced the concept of "effective demand", which is regarded as the main condition of growth of national income and employment.
Vilfredo Pareto (1843 - 1923) in his "Manual of Political Economy", not only rejected the cardinal utility, but also limited their analysis of stringent conditions, considering that the only change that can be measured, there are those who do all or good or bad, or those that improve at least one person without making worse than any other. Improving someone else's welfare due to someone else can not be assessed in quantitative units of utility. V. Pareto formulated the principle according to which the maximum welfare is achieved with optimal placement of resources, when any of their redistribution does not increase utility in society. Pareto improvement - the distribution of resources in such a way that an increase in the welfare of some people to the welfare of others is not impaired. Pareto realized that the general public welfare can not depend only on the volume of material goods available through the rational selfishness and self-interest, without their allocation on the basis of humanistic ethics. He sought the welfare of society sources in the area of \u200b\u200bpublic finances, considering that through fiscal policy the government should ensure the implementation of the democratically certain ethical ideals. Pareto improvement is possible with respect to the benefits provided by the government and non-market services of origin because of their indivisibility and non-competitive use.
Optimum Pareto Based on the following main assumptions:
- each person can best evaluate its welfare;
- social welfare is determined only in individual welfare units;
- well-being of individuals can not be compared.
This concept has several varieties:
- utilitarian function Represents the level of public welfare as the sum of the individual functions of the usefulness of members of society. The principle of redistribution of income is based on the assumption of downlink utility.
- liberal function characterized by well-being as the sum of weighted utilities. In this case, the welfare of a balance, by which society weighs the utility of individuals, given their importance to the public welfare. The market is recognized as the only regulator of public well-being and a great remuneration receives one who is more capable and hardworking, the redistribution of goods does not exist (the type of Bentam's postulate)
- utilitarian function It shows that the growth of public welfare depends on the growth of the welfare of the individual. This function involves the redistribution of the income from the more productive economic entities in favor of the poor (John. Rawls)
- egalitarian function It requires a uniform distribution in which all goods are shared equally among all individuals, namely social welfare (Bergson - Semyuelsona) is achieved under these conditions.
A follower of neo-classical economic school Sedgevik He explored the well-being of society both from the point of view of society and from the point of view of the individual. On the basis of own studies, he concluded that the state should direct the distribution of the product created in the country and thereby increase the overall level of welfare.
Original view of the welfare theory offer representatives institutional direction economic theory. This direction has evolved in 80-90. XX century, his representatives are K. Wicksell, James Buchanan, Stigler other. A feature of this trend is the fact that its representatives offer to solve the problem of social welfare on the basis of ethical categories. The behavior of the individual is investigated on the basis of Homo economicus - rational, selfish maximizers of their own well-being. At the same time, each individual, according to the representatives of this school, has its own value and it is individuals that are responsible for existence under certain conditions in a specific society. Achievements of public welfare J. Bewuchen He believes it is possible on the basis of public choice theory. He believes that there are categories of benefits, including social, that individuals can not obtain market-based and so they try to exchange their right to vote on a range of these goods. Fairness is achieved in the society under certain rules and the existence of the respective institutions. But the decision-making by the majority does not make this decision fair. Problems of Social Welfare search for all members of the Society were actively engaged in representatives of the social direction of the new school Gltsmann, R.Stammler, A. Shpann other. Formation of this area began in the 90s of XIX century. The basic tenets of this school is the recognition of non-economic factors central to economic and social development, the desire to ensure a dignified existence of all members of society, special attention to comply with social justice, active nature of social reforms, and through them to achieve socio-economic progress of the market economy. One of the most important areas of development of the theory of public well-being is selection and improving the system of indicators to assess the level of public welfare in a separate country. The main difficulty lies in the multi-term well-being and selection of the corresponding indicators.
TO key indicators to assess social welfare relate:
- per capita incomes;
- the level of revenue sharing between different population groups;
- indicators of personal consumption;
- poverty indicators of the population;
- indicators of economic activity of the population;
- indicators of the cultural and educational level of the population;
- health status indicators for evaluation of the population;
- demographics;
- indicators for social security;
- evaluation indicators housing conditions population;
- indicators of social tensions in society.
Modern stage
At the present stage of the development of the theory of public well-being continues to be formed, modern economic thought offers new approaches to achieve and evaluate public welfare. Already classic was the combination of economic and social factors, they are complemented by political, environmental, cultural and others. The development of society stimulates the emergence of new needs and the quality of their satisfaction depends on the level of public welfare, and on the possibility of their prediction - harmonious and sustainable social development.
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introduction
Throughout his life, a person strives for the equilibrium, the correct distribution of income, products and everything that has a person. Therefore, I had to create some rules, and the economic theory of well-being was gradually arose. So, welfare is the provision of a state, class, social group, family material, spiritual and social benefits. The welfare of the social group, family, etc. directly depends on the welfare of the state in which they are. economic well-being of Pigou Pareto
Modern economic welfare theory arose from two sources. The first of these is a regulatory analysis of personal welfare, or utility that the individual removes from the environment. This source goes back to the concept of utilitarianism based on Jeremiam Bentam. The second source is a mathematical theory of elections and collective decisions, rising to the works of French Mathematics Jean-Charles Bord and Mari-Jean-Antoine-Condorce. Contributed to this channel has made and mathematician Charles Johnson.
The economic theory of welfare is closely related to the theory of general equilibrium, as it studies the best distribution of benefits between people, production resources between industries. The optimality of the distribution of any resource or consumer good cannot be determined on the basis of only partial equilibrium on the market of this resource or good. It depends on the situation in the markets, on their relationship and interdependence.
This theory depends, ultimately, from individual estimated judgments, the truth or the falsity of which cannot be established with accuracy, although, based on the logic and empirical knowledge, you can develop appropriate ethical criteria, so that the "acceptable level" of general consent is on what It should be seen, not at all is not in principle unattainable.
The first chapter of this work discusses the main theory provisions of the economic theory of well-being.
The second chapter considers the views of Pareto on welfare economics.
The purpose of this test work, the basic principles of welfare economics. To achieve a goal, it is necessary to solve two tasks: to study the theoretical foundations of the economic theory of well-being and trace the process of resource allocation in a market economy.
Chapter 1. Main Theoritical Provisions and General Characteristics of Economic Welfare Theory
1.1 Evolution of views on welfare problems
Humanity, like an individual, has always sought to achieve well-being. Already in the early ideas of utopian socialism destruction private propertyThe equalization distribution and complete regulation of public life were a sole condition for achieving universal happiness. Representatives of this teaching believed that a person was unhappy because he was envy to a more successful neighbor. And to destroy the envy is only one way - to do all the same.
This idea was particularly clearly shown by T. Campanella, the Italian monk-Dominican market and Frenchman Morelli. But it must be borne in mind that the achievement of the same people, which implies the complete absence of them, any property destroys not only the envy, but also the mechanism of social comparison, which is the basis of the dynamic development of both the economy and other parties to social life. It is not by chance that representatives of the early utopian socialism are the ideal model of society - this is a stationary model working according to a simple reproduction scheme.
The ideologues of the capitalist production with their philosophy of selfishness and individualism (A. Smith) in the theory of well-being were emphasized in production, considering welfare as a synonym for wealth, where wealth was considered as material production products. As part of these submission, the basis and source of welfare is the accumulation of national capital, and the indicator of the level of well-being is the increase in the number of benefits per capita or net income of the nation, which in turn depends on capital resources, land and labor. It follows that the factors of economic growth, the most important of which were the accumulation of capital and division of labor, automatically became factors of welfare growth. The prerequisite for the growth of the national wealth of the classics was unanimously considered the system of "Natural Freedom".
The origins of modern theories of welfare should be sought in utilitarianism - ethical theory, recognizing the usefulness of the act of its morality to the criterion. The founder of this theory was the English philosopher I. Bentam (1748--1832), which believed that philosophy had no more worthy classes than to support the economy in everyday life. The goal of any human action Bentham called welfare. Consequently, according to Bentam, the only universal social science should be "eudemonika" - the science of prosperity. The well-being of Bentam offered to measure the subtraction of the amount of suffering from the sum of pleasure for a certain period of time. In its theory, it comes from the fact that each person can produce those arithmetic actions that are necessary to obtain a maximum of happiness. It should be noted that in the concept of Bentama, a person is only the consumer; sphere of production interests him very little. Moreover, it aims to immediately consumption - future pleasures, according to "arithmetic of happiness" enter into consideration with a smaller weight than real. This person (universal consumer Bentama) is well recognizable, it is he who becomes the main figure of margin analysis. And the same Gossen, which was the first to formulate the law of decreasing utmost utility from traditional economic science, took the philosophy of utilitarianism with its principles of rational egoism, subjective comparison of benefits and victims, pleasure and suffering. He even offered political economy to rename in Genusslehre, that is, the doctrine of satisfaction (or pleasure), where the maximization of pleasure (utility) becomes the most important principle of social management.
Bentham, like marzhinalistov, we see a reduction of all motives of human behavior to achieve pleasure; wealth as they are considered as a special case of pleasure. This is the first discrepancy in the views of Bentam and Smith. The second difference is that Bentam did not trust the coordination of individual aspirations to the welfare market and competition, considering it the prerogative of legislation, where the ideal set of laws should be built on the principle of "maximum happiness for all". It is worth noting that the views of Bentama had a great influence not only at the representatives of the marginist destination in economic science, but also at Sismoni, who believed that the science of management should put on behalf of the happiness of people connected in society. In his words, "... it is seeking funds to provide people with the highest welfare compatible with their nature."
In the next section we consider the contribution of Arthur Pigou in the creation of welfare economics, as Pigou's work laid the foundation of the national income distribution theory, put forward the problem of the combination of the economic interests of individuals, businesses and society.
1.2 Contribution Arthur Pig into the creation of economic theory of well-being
A significant contribution to the development of neoclassical ideas was carried out by a student and follower of Alfred Marshall, a representative of Cambridge, Neoclassic School Arthur Pig (1877--1959). The main ideas of the scientist found display in the work "Economic theory of welfare" (1932), which began a new direction of economic research and the first attempts of theoretical justification economic functions states. Arguing over economic research issues, the scientist did an emphasis on the realism of economic science, the sphere of interests of which should be determined by practical tasks. According to A. Pig, the cigarette of economic science should not be a passion for knowledge, but public enthusiasm, which appears against the poverty of dirty streets and without misfortune. Therefore, the purpose of self-study, the researchers saw to find a convenient practical tools to ensure the well-being, in other words, to develop such activities, which, based on economists' proposals can take a statesman. With this in mind, Pigou substantiate the notion of economic well-being and its most important factors. Appeguing that the category of social welfare displays the elements of our awareness and can be described by the "more-less" framework. The scientist consciously limited his own research by the framework of the sphere of public welfare, in which it is possible to directly apply the measurement scale using a pennie. This sphere of social welfare scientist called the economic well-being.
Arguing that there is no clear limit between economic and uneconomical welfare, A. Pig paid attention to the fact that economic well-being does not serve a barometer or welfare indicator as a whole, since welfare often changes, while economic well-being remains at the previous level; And at the same time, changes in economic well-being rarely meet the same changes in welfare as a whole. Consequently, the scientist noted that the concept of individual welfare does not boil down to its economic aspect and includes such indicators of quality of life, as environmental conditions, conditions of work and leisure, access to education, public order, health care and the like.
The most important indicator of economic well-being, his "double" Pigou considered the national dividend, the particle material society income (including, of course, the income that comes from abroad), which can be expressed in pennies. Thus, the economic welfare scientist determined through the national income - the amount that remains after deduction from the annual flow of goods and the finite consumption of the cost of compensation for spent capital goods.
Economic well-being of society The scientist caused:
The size of the national dividend;
Way to distribute it among the members of society.
Determining the criteria for maximizing the economic welfare of society in the timing of optimal allocations of resources, A. Pig used the concept of a limit clean product. He argued that the leveling of marginal clean products obtained as a result of a multivariate use of resources makes it possible to maximize the national dividend. The scientist considered the necessary prerequisite for the achievement of this state, capable of ensuring the implementation of private interests and unlimited movement of goods.
After analyzing the problems of strict accounting of the volumes and dynamics of the National Dividend, A. Pig, one of the first drew attention to the imperfection of the national income as a meter of economic well-being, noting that the monetary measurement of the company's material income can be assigned to the most incredible paradoxes. Consider some examples:
"If a person rents a house that belongs to a particular person and the situation, in this house, it obtained that person services included in the national dividend, if this man got home with furniture as a gift, then such services are not included in the national dividend.
If the farmer who implemented the products of his farm, buys food in the market for his family, the considerable part of the goods acquired will enter the national dividend; However, this products will no longer enter the national dividend, if the farmer is instead of buying goods on the market, will leave part of the produced meat and vegetables.
Philanthropic activities of organizations that do not receive payment for it, church ministers, Sunday teachers, scientific work of disinterested experimenters are not yet taken into account as part of the National Dividend.
The national dividend includes nominal wage, much less than its real value.
Systematic harm nature do not affect the value of the national dividend.
Female work, which is applied in a factory or home, is taken into account in the dividend, when they pay for it, but not taken into account when wives and mothers work unselfishly in their own families. If a man marries his housekeeper or the cook, then the national dividend decreases. "
Carried out a study on coordination of economic interests of individuals, businesses and society as a whole in the context of the relations of distribution. Arguing on the problems of economic well-being, Pigou distinguish the welfare of individuals, social groups and society as a whole. In this regard, the scientist allocated:
Public clean product as "the cumulative increase in the national dividend;
A private clean product as "the growth of benefits that can be sold, as well as an increase in the income of the individual, which ensures investment.
Original in his theoretical construction was thought that free competition does not provide the balancing of private and public-friendly products, and auto-negotiate the interests of society and individuals.
Thus, in contrast to its predecessors, A. Piga analyzed not a static market balance, but deviation from it. In his work, A. Pig often refers to published in 1883 the Treatise "Principle of Political Economy" of the English researcher Henry Syrvika (1838--1900), which stood at the origin of the economic theory of welfare.
The city of Syrvik was one of the first to drew the differences between the same concepts depending on the micro or macroeconomic levels of analysis. In contrast to the "classics", he argued that the system of "natural liberty" generates a conflict between private and public interests, and does not provide effective solutions Many socio-economic problems, especially in the field of distribution. Remarkable by the need to limit the Laissez Faire system (the principle of non-interference) on the basis of state intervention in economic life, Sidylvik believed that a more uniform distribution of public goods enhances the overall level of nation well-being.
With the emergence of monopolies that violate the foundations of market competition, preventing the free movement of resources. In analyzing this problem, Pigou first introduced the terms "imperfect" and "monopolistic competition", which played an important role in studying the next generation of neoclassical economists.
Arguing that private business activity that provides the appropriate pure product can bring to society, both benefits and losses, the scientist laid the foundation for the modern theory of external effects (externalities). He singled out the positive external effects, due to which the limit special pure product less than the corresponding national product for the reason that the service side receives some third party, which is technically difficult to pay for these services. According to the researcher, examples of positive externals may be cases when:
"The services of a conveniently located lighthouse basically use vessels that cannot be made in some way pay these services.
Investing the construction of roads or private paths, thanks to which prices are raised for land plots located nearby.
Investments in forest plantations, installation of lights at the doors of private houses, investment resources, which are sent to clean up emissions from factory chimneys. "
The negative external effects, because of which "marginal private net product exceeds the social net product." According to a scientist, about side-noncompensated losses for third parties can be told under the conditions when, for example, one person is engaged in the fact that rabbits spread, which devastated vegetation in the crowns that belong to another person.
Arguing that under the conditions of free competition, there are circumstances that impede the automatic achievement of Optimum, A. Pig paid attention to the fact that in cases where private enterprises are left for themselves, the distribution of resources (even under conditions of free competition) becomes the least favorable ( Of all possible) in terms of the impact on the national dividend. Therefore scientists have concluded on the need to complement the policy "laissez faire" state regulation economic life, noting that even Adam Smith did not know completely, as far as the "natural freedom system" needs to be protected with the help of special laws so that it could provide the most productive use of resources. "
Depending on the maximization of the national dividend from the action of two complementary forces (private and public interests), A. Pig allocated two forms of state intervention in economic life:
1. Direct, justified under the conditions of monopolization of the economy and associated with state control over prices and production volume;
2. Indirect (mediated), justified under the conditions of free competition and related to the tax mechanism.
"For any industry, with respect to which there is reason to believe that as a result of the free realization of industrial interest, resources will be invested not in the volume that is necessary from the point of view of increasing the national dividend - the scientist noted - there is grounds for state intervention."
Consequently, under the conditions of the market economy, the state's tasks, according to the English researcher, is the internalization of external effects, transforming from an implicit difference between private and public interest. "The government is able to reduce the gap between the relevant products in one or another sphere, providing investing in this area," wrote A. Pig. The most important forms of providing such support and imposition of restrictions, he considered the substitute, respectively, taxes.
The idea of \u200b\u200bA. Pig's idea that the presence of external effects makes legitimate state intervention in the economy, was a subject of question only in the 60s. XX Art. When the Nobel Prize winner in 1991. The American economist R. Kouz proved that the presence of external effects is associated with the institutional environment and blurred property rights. The specification of the latter, according to the city of Cone, makes it possible to interpret external effects and excludes state intervention in the economy under conditions of free competition.
Defending the principles of "the greatest good for the greatest number of people," A. Pig adhered to the thought that the most important factorwhich affects the well-being of society is the distribution of national income. The weekend in this theoretical position was the statement according to which the maximization of public welfare can be achieved by a more uniform distribution of income, even if it negatively affects the rag of capital and private initiative.
Based on the law of downward utility utility and the idea of \u200b\u200bA. Marshall relative to the different value of the same amount of money for rich and poor people, the scientist argued that the losses caused by the economic welfare of the prosperity layers in the event of the transfer of their right to dispose of the resources to the poor, will be significantly less in Comparison with winning in the level of economic well-being of poor. Hence, the scientist did conclusion that until the amount of dividend as a whole decreases, any significant increase in the real incomes of poor layers due to the relevant reduction in real incomes of comparatively rich layers will lead to an increase in economic welfare.
Consequently, the scientist defended the progressive tax system according to the principle of the "smallest cumulative victim." He pointed to the need to tax rates depending on the income of one or another person, the use of preferential prices on products, the introduction of inheritance tax, encouraging donations and the like.
It is important to note that the works of A. Pehi contributed to the gradual departure from the orthodox version of the quantitative theory of money. The scientist has made adjustments to the research methodology of the American economist I. Fisher (1867--1947), the author of the famous equation of money exchange. He proposed to take into account the impact on the motives of the behavior of business entities, the desire to postpone the part of the money as a supply in the form of bank contributions or securities.
In modern neoclassical theory, the so-called "Pig Effect", or the "effect of real cash balances", according to which height (decline) of the price level should reduce the real value (or purchasing power) of financial assets especially with a fixed cash value ( Urgent accounts, bonds), making it possible to reduce (increase) cumulative expenses in the economy.
Thus, different people with different ideologies considered economic welfare theory in their own way. Each person is looking for a welfare criterion.
In general, the economic theory of Pig, focused on new conditions for the development of society, affected the problems that were practically investigated by representatives of the Keynesian direction, the emerging also on the basis of the Cambridge school.
Chapter 2. V. V. Pareto on the economic theory of harvesting
2.1 Optimum Pareto: Search Criteria Efficiency
According to its economic views, V.Parto (1848-1923) can be attributed to representatives of the Lausanne Economic School. Like Walras, Pareto considered the political savings in a kind of mechanical mechanics revealing the processes of economic interactions based on the theory of equilibrium. In his opinion, this science should explore the mechanism establishing the balance between the needs of people and the limited means of their satisfaction. A significant contribution was made to V.Parto to the development of the theory of consumer behavior, introducing instead of the quantitative concept of subjective utility - ordinal, which meant the transition from the cardinalist to the alternate version of the limit utility theory. Further, instead of comparing the ordinary utility of individual benefits, Pareto proposed comparison of their sets, where the preferred kits were described by indifference curves.
Pareto opinion, there is always a combination of the values \u200b\u200bat which the consumer does not matter in what proportion it will get them as long as the sum of these values \u200b\u200bis not subjected to change and bring maximum satisfaction. These provisions of V.Parto formed the basis of the current theory of consumer behavior.
But the most famous Pareto with its principle of optimality, which was called "Optimum Pareto", which lay down the basis of the so-called new welfare economy. Optimum Pareto states that the well-being of society reaches a maximum, and the distribution of resources becomes optimal if any change in this distribution worsens the well-being of at least one entity of the economic system. In a situation that is optimal by Pareto, it is impossible to improve the position of any participant in the economic process, at the same time not reducing the well-being of at least one of the others. This state of the market is called a pass-optimal state. According to the criterion of Pareto (criterion for the growth of public welfare), movement towards the optimum is possible only with such a distribution of resources, which increases the well-being of at least one person, nor damaging anyone else.
The initial package of the Pareto theorem was the views of Bentam and other early representatives of utilitarianism from among economists that happiness (considered as pleasure or utility) of different people are comparable and additive, that is, they can be summed into some overall happiness of all. And, according to Pareto, the optimality criterion is not the general maximization of utility, and its maximization for each individual individual within the possession of a certain source stock of goods.
Based on the parcel of the rational behavior of the individual, we assume that the company in the manufacture of products uses such a set of production capabilities that will provide it with the maximum discrepancy between gross revenue and costs. Consumers, in turn, acquires a set of products that will provide him a utility maximization. The equilibrium state of the system involves the optimization of target functions (consumer - maximization of utility, in an entrepreneur - profit maximization). This is the pass-optimal state of the market. It means that when all market participants, seeking everyone to their benefit, achieve a mutual equilibrium of interests and benefits, the total satisfaction (the overall function of utility) reaches its maximum. And this is almost what A. Smith spoke in his famous passage about the "invisible hand" (however, not in terms of utility, but in terms of wealth). Subsequently, the theorem was really proven that the general market balance is the passing and optimal state of the market.
So, the essence of Pareto's views can be reduced to two statements:
Any competitive equilibrium is optimal (direct theorem),
Optimum may be reached competitive equilibrium, that means that the selected criteria on the basis of some optimum manner best achieved through the market mechanism (reverse theorem).
In other words, the state of the optimum of target functions and ensures balance in all markets. Optimization of target functions, by Pareto, means the choice of the best alternatives from all the economic process possible by all participants. However, it should be noted that the choice of each individual depends on the prices and the initial volume of goods, which it has, and varying the initial distribution of benefits we change and equilibrium distribution, and prices. It follows that the market equilibrium is the best position in the framework of the already formed distribution system and the Pareto model involves the immunity of society to inequality. Such an approach would be more understandable if we take into account the "Pareto law", or the law of income distribution. Based on the study of statistics from a number of countries in various historical epochs, Pareto found that the distribution of incomes above a certain amount retains considerable stability, and this indicates, in his opinion, on the uneven distribution of natural human abilities, and not about the imperfection of social conditions. Hence the extreme skeptic attitude of Pareto to the issues of social reorganization of society.
However, it is difficult to challenge the situation that optimal, by Pareto, is very often socially unacceptable. Therefore, even in line with the neoclassical direction of political economy, other beneficiation theories are formed.
2.2 Pareto Welfare Function
Consider the example of a geometric distribution solutions for the problem of the case of two individuals. Suppose indicator of the well-being of an individual is the utility benefit, which in turn depends only on the income of the individual. According to the abscissa axis, we will postpone the income obtained by the Individual A (Ia), and along the ordinate axis, the income of the individual A (IB). The line conducted at an angle of 45 ° will show us an equal distribution of income between individuals, so we call it a ray of equality. The line shows how the same public "pie" can be divided between two individuals (i.e. is the boundary of possible income). The initial distribution corresponds to the point K, equal to the income distribution is indicated by the point L.
Suppose now that the usefulness obtained by the individual depends not only on its income, but also from how income in the community is distributed. Individual B is concerned about inequality in society, and for this reason, in the process of redistribution, with an increase in its income, its own utility is growing, with a decrease in the usefulness of the individual A, only until a certain point (point M). With a further increase in inequality, its usefulness decreases. Similarly, the usefulness of an individual A decreases with a decrease in the utility obtained by the Individual B below the level corresponding to the point N. We thus suggested the existence of external effects in consumption, and their value is directly dependent on the degree of inequality in society.
Assume that the market mechanism of action led to the distribution of utilities, the appropriate point in the K, so that one of the members of society (B) turned out to be a rich man, and the other (A) - a poor man. The transition to any point on the KL plot will be an improvement in the criterion of Pareto. In the case of two individuals, it can be expected that the rich is voluntarily "will share" with the poor (i.e. there will be a voluntary transfder).
However, this may not happen if there are many individuals in society. Charitable redistribution of income is similar to public good, and if the number of participants in the process of redistribution is growing, then the expectations of citizens grow, that someone else will fulfill their debt. The role of the state is that, replacing voluntary transfers with forced redistribution of income through the tax system, it solves this problem, and these actions lead to an improvement in Pareto.
The set of Pareto efficient points in Fig. 2 belongs to the MN plot, any transition between points on this site is not allowable by the criterion of Pareto. But if it is not used by the vector of social well-being, but the welfare function Pareto, the only optimal point can be found on the MN plot.
Defining the social welfare function, we can build the line on which this function takes a fixed value - the indifference curves for the society as a whole. Public indifference curve (CIC - Community Indiffence Curve) combines points in which the well-being of society will be the same. CIC For welfare functions Pareto have a negative slope: the increase in the usefulness of one of the individuals will not lead to a change in public welfare only with some decline in the usefulness of another individual. CIC For the symmetric utility function is symmetrical with respect to the line of equal usefulness (central angle bisector). The higher the CIC is, the higher the high level of social well-being reflects.
The concept of optimum using the social welfare function, and it differs from the concept of Pareto efficiency. Pay attention to the form of the boundaries of possible utilities. The specific form of this border depends on the functions of the usefulness of individuals. Above, we suggested that the usefulness of individuals depends only on the income they obtained, but the relationship between income and utility may vary between individuals. The same income of various individuals can bring unequal utility, respectively and the boundary of possible utilities may not be symmetrical about the line of equal utility.
Effective by Pareto are all points of arc Mn curve of consumer opportunities; none of them is not Pareto preference to any other - they all Pareto-incomparable. However, the function of social well-being reaches the maximum only in one of them - at the point of touch with the curve of possible utilities and the public indifference of the CIC1.
The specific position of the optimum point depends on the properties of the well-being function. For any function, the Pareto point of the optimum will be passive efficient, i.e. will be on the MN arc. There are also specific well-being functions. This is the well-being function of Bergson-Samuelson, the maximum function of welfare, etc. All of them are symmetric, but are built on the basis of various valuables; Accordingly, this will also be the states that each of them considers as optimal.
CONCLUSION
Welfare - extreme important element Life is not only one separately taken man, but also any state. The economic theory of well-being is an ideal, to the achievement of which people seek. Despite the fact that this ideal is not reaches, it is good because, when a person is desire for him, it makes better the state of his life, revises his ideas to the best, from an economic point of view.
Some may say that the economic theory of well-being is something that is not perceptible, and ask questions such as "why did develop frivolous questions?". I can answer so that the minds of many economic leaders, scientists are engaged in issues of economic theory of well-being. Welfare affects absolutely all spheres of human activity, not only economic. For a long time, scientists have dealt with these questions only casual. It was thorough for solving the issue of welfare at a serious level of A. Pig and V. Pareto. It was they who proved that the development of welfare theory may like a chain reaction to improve all spheres of the economy. Ie. If you start to develop a single sector, the chain will begin to improve next and so on.
Arthur Pig, believed that economic well-being could not be an indicator of human well-being, since the well-being of a person is influenced not only by him, for example, its financial security, but also the state of the environment, relations with other people, etc., that is, on well-being A person also influences non-economic factors.
Optimum by Pareto is that the optimal state of the market is achieved only under the condition that any change in resource allocation worsens the well-being of at least one entity.
The difference between the economic theory of the welfare of the Pig from Optimum on Pareto is that the free functioning of the market competition of the Pig considered an insufficient condition for optimizing overall blessing.
It can be concluded that it is necessary to further develop the economic theory of well-being. It is necessary to take it into account during the solution of important economic issues.
List of used literature
1. Galperin V. M., Ignatiev S. M., Morgunov V.I. Microeconomics in 2 volumes. - St. Petersburg. : Economic School-2006.
2. Economic School. Release 5.Akimov D.V. Theory of public welfare and public sector economy. // (NRU - Higher School of Economics) -2004.
3. Chepurin M. N. A course of economic theory. - Kirov: Publishing House Asa - 2006.
4. A. Pig Economic Welfare Theory. - M.: Progress-1985.
5. Galperin V. M. Welfare Economy and Public Choice - Milestones of Economic Thought. - St. Petersburg. : Economic School 2008.
6. M. Rotbard on the reconstruction of the economic theory of utility and welfare. - M.: SOCIUM-1956.
7. The course of economic theory / ed. Sidorovich A.V. - M.:
8. History of economic exercises / Ed. V. Avomonova, O. Ananin, N. Makasheva: studies. Benefit. - Moscow: INFRA-M-2001.
9. G. P. Zhuravleva. Economy: Textbook for universities - M: Economist, 2006.
10. Bartenev, S.A. History of Economic Thought. - M.: Lawyer,
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pig Economic Theory Welfare
Problems of welfare research was devoted to the work of A.Piga "Economic Welfare Theory". The aim of its research by PEIG was developing practical tools to ensure welfare based on the parcels of neoclassical theory: theory of decreasing utmost utility, a subjective psychological approach in assessing the goods and principle of utilitarianism. It is possible to say with full right that the peg completed the creation of a neoclassical theory of well-being.
Since the income is a central for Pig, the problem and since income determines the level of welfare, it begins its study with the characteristics of well-being.
First, "... the concept of welfare reflects the elements of our consciousness and, possibly, the relationship of these elements, secondly, well-being can be described by the concept" (t. 1, p. 73). The only tool for measurements in the social life of the Pig announces money. In this regard, and speaks of the limitations of the study of the area in which the measurement can be taken with the help of money, that is. E. The process of exchange of goods in the market pricing. Consequently, the price from the very beginning is broken away from its content - the cost of goods, and the study of only exchanges hides the fact that various products, as well as various consumer costs, are made commensurate due to the costs, and not prices, thereby pouiguits the issue of the cost source and It refers to the factors that determine the price of goods.
Among the factors determining the level of the price, it allocates two main groups: production costs and utmost utility.
They are linked to each other in neoclassics through the analysis "production - demand". The price was thus delivered to direct dependence on demand and suggestions.
The proposal of the Pig was determined by the costs of production, linking them with the technical conditions of production. Thus, various theories were connected externally - costs of production and utmost utility, and the views of Ricardo and the concept of a subjective school.
Next, developing the concept of welfare, the peg is dedicated to Ch. 1, part 1, in his book describe the differences between the general and economic well-being and the dependence of the overall welfare from the economic. However, under the economic welfare of the Pig implies nothing but the overall utility (wealth) used by Marshall. The formation of economic welfare of Pigu binds to the interaction of supply and demand.
He writes that the amount of money that the individual is willing to pay for a particular thing, directly reflects not the satisfaction that it will receive from its use, and the degree of desirability for him this thing (Volume 1, p.88).
Just the peer replaces the term "utility" by the term "desirability".
The concept of a national dividend is a great place in the theory of Pig.
The national dividend is defined as the share of the material income of society, which can be expressed in money. Thus, economic well-being and the national dividend are in Piga as a category of one-order. Pig writes: "Thus, I will attribute to the national dividend all that people buy for their cash income, as well as the services provided by the housing, which he owns and in which lives" (T.1, p. 101). He defends the understanding of the national dividend as the flow of goods and services produced within a year. Also puts the question of changing the magnitude of the national dividend for different periods of time.
According to Pig, the price of demand is the price that the consumer is ready to pay for a unit of goods. Indeed, the price paid by the consumer is the maximum price price. But this price is essentially measures the utmost utility of the goods for the buyer. Therefore, its movement depends on the degree of satisfaction of the need and intensity of the consumer's desire, or in other words, from the amount of goods of this species to which it has.
Prices, from his point of view, represents the marginal utility of goods only under the condition that the purchasing power of money and the income of consumers unchanged (neoclassic always stressed that for poor marginal utility of money is greater than for the rich).
As the main law of limit utility, the first state of the states is used, according to which a decrease in the utility of good for an individual is determined by the fact that the overall utility of any thing for it increases together with each increase in the stock of this thing, but not at the speed, with which the stock increases. To the conditions of the action of this law, Pigu believed the invariance of the tastes and the desires of the consumer. Based on the limited solvency of buyers, neoclassics believe that the increase in demand is associated with a decrease in price, and vice versa. Therefore, the maximum price for the goods depends on the number of purchased goods. When the price is reduced, the required amount of product is growing, with its increase - the demand for goods decreases. On this basis, it was constructed demand curves showing how many goods can be sold at different prices. The market analysis instrument proposed by non-slasses is reduced to the definition of price elasticity of demand.
Analysis of the elasticity of demand means, according to neoclassics, analysis of the demand curve. However, in reality, the elasticity of demand is determined not only by the functional dependence between the price and demand, but also the purchasing power of various segments of the population. Therefore, with any approach, the analysis of partial equilibrium is always quite limited. Pig tried to overcome this limitation by expanding the circle of the circle of the problems under study, which were previously excluded from consideration. It is primarily about the impact on the economic well-being of private and public benefits. This quite clearly manifested bourgeois reformism Pigou, his good wishes to increase social justice.
Pear specially considers various options for the distribution of the national dividend between people and the poor, seeking to substantiate the thesis that the growth of economic and general well-being contributes to a more uniform distribution of income. According to Pig, any income is subject to decreasing utmost utility. With the increase in money income, the usefulness of additional monetary units For the owner, it falls, and the borders of his demand, determined by desires, expand, and he is ready to pay for the benefit of increasingly compliance with the intensity of desire and not with limited money. From this false premise was made liberal conclusion that if income redistribution in favor of the poor can increase the general well-being, as Poor satisfaction will increase more than the satisfaction of the rich will decrease.
This idea on the application of the concept of decreasing utmost utility in the analysis of cumulative income was subjected to bourgeois economists criticism. But the peg is not unilateral in the question of the redistribution of income and accompanies it with many reservations. According to his statement, the automation of pricing can ensure the winnings of the poor and losing wealthy, even if the value purchasing power and the other remains unchanged. This happens with the technical improvement of the production of benefits consumed by the poor, and the deterioration of the production of goods consumed by rich.
According to the pegar, the utmost utility of the good depends not only on the degree of intensity of desire, but also on the number of cash, then there is enough technical innovations and increase this amount to saturate the demand when lowering the price. In this case, the issue of ownership of the means of production, sources of value, the conditions for the distribution of the newly created value between the hired workers and capitalists allegedly loses its meaning, and the relationship relationship is replaced by a idyllic picture of meeting the needs of all people as social welfare grows. But the fact that Marxism has proven the inevitability of the preservation (and even growth) of the operation of hired labor with capital in the dominance of capitalist property relations, regardless of whether the mass of consumer values \u200b\u200bdecreases, and on how an individual or group of persons assesses the usefulness of those or other benefits. Complicated peg arguments about the change in economic welfare, its filigree economic casuistics do not at all make a neoclassical theory of demand more scientific and especially not only do not refute Marxism, but on the contrary, indicate the disadvantage of his scientific foundations.
Pig raises the question of the source of remuneration of the poor. He is faithful to the vulgar political economy in the interpretation of the last thesis. The main income of the poor is their salary - is depicted by him as a fee for labor. He considers the work not as the cost of muscular energy, but as a feeling of pain. To compensate for the dissatisfaction of employees, when expanding the scope of the work (as if it does not occur with progressive work methods), it offers a certain intervention, directed primarily to prevent an erroneous understanding of the workers of its interests.
According to the peg, the production function is to obtain a product or income. This product (income) is displayed as a result of action for a certain time of production factors - capital, land, entrepreneurship and labor. Each of these factors, respectively, "charged" a certain part of the product or income. According to the principle of limit performance, the overall increase in the product is presented as the amount of limit products created by the latest factors of production. The concept of the limit product directly follows from the law of decreasing productivity of production factors, according to which each additional unit of labor, capital, etc. has less productivity than the previous one.
The abstract nature of this theory is marked by many economists, because it is impossible to determine when this limit occurs. The law of decreasing productivity of production factors completely ignores technical progress, the growth of public labor.
In fact, interpreting the cost of production as a "real" costs, they had in mind the psychological sensations - the victims who bring workers into force of the "pain of" labor and victims of capitalists in the form of their "abstinence" from the pleasure of consumer capital in the present. Therefore, the proposal of factors linked to overcoming these psychological "burdens." Next is the consideration of costs in their monetary formin which these costs protrude on the surface of economic reality.
Production costs are presented as prices that an entrepreneur pays for certain portions of labor and capital.
Capital Pig treats not as an incarnation of labor, but vulgarly, as the result of the "abstinence" of the owner, when the "abstinence measure or a degree of risk or the other together increases." Pig claims that the law of decreasing yield of individual factors of production is fundamentally different from the law of decreasing returns of resources and is fair not only under certain conditions, but always. A similar "law" of decreasing performance and profitability of additional units of factors of production allows the possibility of infinite variation of factors of production with the immutability of the technical basis. This implies an opportunity to invest an unlimited capital into one piece of land or put some workers from one car, which in itself is ridiculous, for each level of technical equipment of production involves a strict proportion of the factors used. By rejecting the existence of an objective basis for the price of goods - cost of neoclassicism were in a mythical world. After all, if the price of goods is determined by the costs of its production, then it is necessary to figure out how to measure these costs. Answer to such a question of non-slasses is not able to give. I mean by costs the costs of an entrepreneur for the purchase of machines, payment of labor, rental of land, etc., they simply suggest that all of these products needed for the organization of production are already available on the market, and therefore have a certain price.
Pig considered various cases when the offer price regulates the volume of production. Generally neoclassics mixed the production of individual enterprises or industries with public production. Such confusion evident in the "welfare economics". Pig is trying to resolve the question of the ratio of individual and public economic interests. According to Pig, the cumulative pure product is created due to the utmost increment of resources in any field (if you take into account the private and public benefits, as well as public costs). The idea of \u200b\u200binternal and external economy is fully used here.
The peg built a general theory of well-being, according to which only the leveling of public and private utmost clean products ensures maximum production maximum. But the failure of this task was predetermined by using the principles of vulgar theory, according to which the performance of additional units of resources is reduced.
Pigou argues that the benefits of the economy, which makes it possible to increase the yield goes not to the manufacturer and the purchaser due to lower prices. The interpretation of labor as a factor of production from the position of the decreasing performance of additional units leaves it the wide possibilities of a combination of empty liberal wishes with the protection of the interests of entrepreneurs in wage issues. From empirical material about the relationship of entrepreneurs and workers, it can be concluded about the genuine class point of the peg. A decrease in the income of each worker when an expansion of the Labor Offering is declared an ultimately insignificant factor in terms of the overall level of welfare. In other words, their bourgeois essence is hidden in the form of the formation of a peg, in accordance with which even a decrease in wages with growth in labor supply ensures the growth of capitalist wealth. Monopolistic competition and government intervention in the economy. The ideal condition for achieving the maximum of economic welfare of Pigu continued to consider the coincidence of private and public utmost clean products. According to Pigou, and the monopoly capitalist associations can inhibit the growth of social net product, increase the gap between the marginal private and social marginal net product. The branches with a downward price of the proposal are subject to monopolization trends, since their limit costs may be below average. The possibility of monopolization, he binds primarily with the industries, which, due to the developed specialization, produce top quality branded goods in the calculation of small markets. Further, it admits that in connection with the production of products, special monopolies arise in non-equal demand.
Tracting monopolies from the market positions, it introduces such a thing as "monopolistic competition", which "arises in those conditions when one of two or more sellers provides goods a significant part of the market, which they supply their products" (t. 1, p. 335). for conditions monopolistic competitionAccording to Pig, the demand curves and proposals are depicted by straight lines. The characteristic of the monopoly and monopolistic competition in the peg is limited exclusively to the market area, although it makes several comments on the redistribution of production investments. This is the main drawback of his methodological approach to the evaluation of such an important phenomenon of capitalism, as a monopoly. Unlike simple competition, a simple monopoly is associated with them with the presence of only one seller of a certain type of product or services and the existence of a minor competition (monopolistic) on the part of those who produce a similar product or its substitutes. Such estimates allow you to disguise the true nature of the capitalist monopoly and besides, to hide the fact that the domination of monopolies is associated with the inflation of prices for the extraction of high profits. Since the occurrence of monopolies, competition is not transformed into harmless monopolistic competition, and becomes a new character, it becomes even more fierce and destructive. According to Lenin, we have no competitive struggle of small and large, technically backward and technically advanced enterprises. Before us is the suffocation by monopolists of those who do not obey the monopoly, its oppression, her arbitrariness. This characteristic, deeply concealing monopoly reality demonstrates the true value of Pigou's reasoning about monopolistic competition.
Piguas affects the impact in conditions of monopolistic competition for the introduction of new equipment and technology at the price of the offer by saving on costs. But he strives to withdraw from here a decline in the price of a unit of products and an increase in economic well-being. Such conclusions are in the blatant contradiction with monopolistic economic practices. In the conditions of the scientific and technological revolution, new inventions allow largely to reduce the individual value of the goods compared with public, if they, at least at the time, are monopolized. As a result of monopoly, which introduced those or other achievements of technical progress, reduce their costs, but continue to throw out products on a monopoly high price. Monopoly advantage of large-scale production only for selfish purposes, and not for the sake of economic livelihood. And the approach to the pion of monopoly is presented to them as a market phenomenon.
Pig evaluates the work of workers as a routine, for it has a matter of only working out of physical labor, which cannot cause such interest as the work of the "original" species. Therefore, to blame the intensification of labor workers, it proposes to use the cooral, essentially, the wage systems under which it is raised dependent on the amount of products manufactured. To smooth out the discontent of the workers, he is started in reasoning about the creation of a "labor partnership" of entrepreneurs and workers for initiating in the people "sense of property and patriotism towards hired by their company" (vol. 2, p. 76). This is the so-called system of measures aimed at convincing workers that the needs of the enterprise (capitalist) are due to the interests of the whole society. That is, Piga was engaged in the consideration of the patterns of formation of relations in the team between workers and managers - representatives of the power of capital. Of course, firms using sophisticated techniques for the establishment of a "partnership" have achieved the growth of labor productivity, an increase in the share of high-quality products, reduce non-appearance to work. But do not accidentally companies involved restructuring the recommendations of the supporters of "job enrichment", sharply cut information about his experiments, equating to leak information on new forms of work organization to the disclosure of trade secrets. At the same time, the peer describes the comparative advantages of various wage systems depending on the production; he can not get around and such a hot issue, as the duration of the working day. He persuades entrepreneurs do not strive for excessive lengthening of the working day. Wigs and for the establishment of a smaller duration for women and children of the working day than for men, although fundamental objections to the use of child labor avoids. The borders of working time for various groups of workers are determined selectively. He agrees with the opportunity state definition The borders of the working day, for the entrepreneurs in the context of competition go to the "wear" of workers, not looking into the future; He believes that from a social point of view is justified motion for reduction of working hours to 8 - 9 hours.
Pig offers a complex statistical apparatus to determine the level of "fair" wages. The value of this apparatus immediately becomes equal to zero because of the very principle determining, "valid" wages or not.
Pig announces a "fair" that wages, which is equal to the utmost product of labor. In other words, the wage analysis from the very beginning is put on a purely vulgar position. The only real moment in the study of wages here provides an indication of its necessary connection with the level of productivity. The exploitative source of wages is out of sphere of attention.
Only ultimately, Peh is faced with the main thing - with unemployment, the chronic phenomenon, which in the root undermines the possibilities of the worker immediately gain greater wages from another entrepreneur.
For Pigou first cause of unemployment lies in the simple lowering of demand for the product manufacturer. The entrepreneur, the demand for the product of which is reduced, may, according to the peg, reduce production by three different methods:
- 1) give a working work full time, quitting some of them;
- 2) to give the opportunity to all workers to work a full-time, to carry out their alternation in such a way that only part of them is occupied at the same time;
- 3) Provide the work opportunity to work part-time, and the whole staff of workers will be engaged in the entire working day.
These parcels are based on the consideration that the entrepreneur is always important to have a sufficient number of qualified workers in hand if necessary. And yet, what is the cause of unemployment under capitalism? From his salary theory, such a response is quite clear. If the "fair" wage limit is disturbed, linked to the creation of a limit clean product created by work (in other words, if the salary increases), then the remuneration of other factors of production decreases, and to restore the equity capitalist is forced to reduce the supply of goods (reducing one way or another Workers) to cause subsequently increased demand.
Pig with one shot kills two hares: completely hides the true cause of unemployment during capitalism, withdrawing it from too high wages of workers, and presents unemployment not in the form of chronic, but in the form of a temporary phenomenon, for the rising inevitably demand for goods, the production of which is reduced, will force , From his point of view, the entrepreneur will re-attract additional factors (first of all labor) to meet increased demand.
In matters of wages and unemployment, class bias, anti-workers, the nature of his theory is also tracked quite clearly and clearly. Class Faith Pig suggested from where capitalism threatens the main danger, who is the main opponent of the bourgeoisie. Therefore, he devoted most of the "economic theory of well-being" (see. 3) attempts to disguise the nature of the surplus value.