A critique of welfare economics

Abstract

“Welfare Economics” is a branch of economics that evaluates well-being. It focuses on the optimal allocation of resources and goods in competitive markets and how this affects individual and social welfare. This article argues that such results which emerge through the market process cannot be judged without taking into account the institutions of the market and of the political process (i.e. the “rules of the game”). To ignore this is a blind spot of welfare economics.