The Economics of Welfare
London, 1920
Abstract
This treatise develops the theoretical framework for assessing economic policies aimed at maximizing social well-being through the National Dividend—the measurable net aggregate of goods and services produced annually. It establishes that economic welfare is primarily determined by three criteria: the average volume of the Dividend, its distribution favoring the poor, and the stability of the income flow. The analysis investigates conditions under which the free play of self-interest fails to maximize the dividend, focusing on divergences between marginal private returns and marginal social returns, particularly in areas involving public goods, externalities, and monopoly. These theoretical failures establish a prima facie case for State intervention, whether through control, operation, or fiscal tools like taxes and bounties. Further sections examine how changes in the supply of capital and labor, as well as technological inventions, affect the dividend and the absolute earnings of the working class. Finally, the work explores practical methods for stabilizing labor earnings, including the determination of fair wages, optimal hours, and the comparative effects of different fiscal instruments—taxes, loans, and special capital levies—on both future wealth creation and distribution. – AI-generated abstract.
Quotes from this work
[T]here is wide agreement that the State should protect the interests of the future in some degree against the effects of our irrational discounting and of our preference for ourselves over our descendants. The whole movement for ‘conservation’ in the United States is based on this conviction. It is the clear duty of Government, which is the trustee for unborn generations as well as for its present citizens, to watch over, and, if need be, by legislative enactment, to defend, the exhaustible natural resources of the country from rash and reckless spoliation.