Critically assess the value of the concepts implicit in Pareto
efficiency as a guide to economic policy

And about how many words are you supposed to write?

it is suppose to be a 2500 words assignment.

The way I see it is that Pareto Efficiency does not seek to compare
the unit value of utility between individuals.

In plain English, it does not trade peoples' happiness
- something that results in me being slightly worse off and you being
a lot better off does not come into things.

If you are relatively new to Economics, then you will probably have
recently learnt about the difference between 'Positive Economics' and
'Normative Economics'
- the first does not make value judgements (and is the title of the
first text book that most people read)
- the second is value laden - and is a minefield, as what I think is
'good' is not necessarily what you think is 'good'

In essence, Economics can be hijacked to legitimize robbery 
- eg: rob Peter to pay Paul

Pareto provides a mechanism (or framework) in which one can determine
that something is 'good' or desireable, or 'efficient', without
resorting to (or advocating) robbery.

Without a dispassionate way of determining what is desirable (or
optimal), Economics deteriorates into pure politics.

You need to describe a 'Pareto Optimum' (or rather lots of them) and
also the 'Pareto Optimum Optimorum'.

You probably need to talk about 'Indifference Curves' 
- and emphasize that Pareto never advocates anyone moving to a lower
indifference curve.

You could probably talk about cars without reverse gears, and rules
that prevent one car pushing another backwards.

Google Answers is not an essay writing service, in fact essay writing
is strictly against its policy
- 'Homework Help' should really be re-titled 'Homework Hints'

However, a nudge from me to push you in the right direction to produce
your essay gives me a certain amount of satisfaction, does not make
anyone else worse off - and hopefully will make you better off.

Pareto, despite his approval of Mussolini, was an interesting guy with
a lot of good ideas. The most valuable of which is that it is
downright dangerous to think in terms of trading one person's
increased happiness with another person's decreased happiness.

He provided a simple way in which a UK gallon is (sort of) the same as a US gallon
- even though they are not the same (well not in this model)

Another way of putting it, is that he provided Economists with a
common language, rather than letting them sink into a morass at the
foot of a Tower of Babel.

It is always wise to read your course work, and even wiser to read
round the edges - tutors sometimes deliberately omit the reference
that points dirctly at the answer that will get an alpha.

And one other thing - Pareto substituted the word 'efficient' for
'good' in the Economist's vocabulary which is useful as 'good' is an
adjective not a noun, despite what people think.

eg: Asparin is 'good'
    Asparin is 'good for' thinning the blood

In effect, he deleted a load of misleading and dangerous words from
the Economist's vocabulary - very simple, and very smart.

I suggest you check out whether someone else got there before him, he
might have 'refined' a pre-existing concept - Economists often do.

Also check out the 'Pareto Principle' - the 80/20 rule 
- find a way of working it into your essay, possibly:
 80% of economists understand and respect Pareto Efficiency, but the
other 20% don't, and create 80% of re-distrbitutative hassle.

Don't forget that Pareto was a Fascist.

@Probono

This annoys me - what is a 'Faschist' ?

An axe in a few rods. A Roman symbol of power.

I go for the Hannah Arendt view (which I am sure she nicked from marketing)
- or a precursor thereof

I personally believe in 'radical authoritinararism' (when I can spell it) 
- in simple English  'Do it right'

Hmm.. that came out a bit less lucidly than I expected.

Some time ago, a political scientist called Hannah Arrendt came up
with the idea of applying marketing models to politics.

You probably know the type of thing 
         Price  
        Premium

Whoops - tab and space bar error.

You probably know the type of thing 
                      Price  
                     Premium
                        |
Wash      gentle -------|------- whiter
                        |
                     Economy

They are used to explain why products tend to be similar to appeal to
as much of the market as possible

replacing the 'characteristics' with :  
        radical/conservative and liberal/authoritarian

You get an interestng little model that can describe different types
of political views.

Mussolini's Fascists and Hitler's National Socialist German Workers
Party (NSDAP) both fit in the Radical + Authoritarian quadrant

Franco and Salazar fit in the conservative + authoritarian quadrant

The Bolsheviks also fit in the Radical + Authoritarian quadrant

If one looks at things like that, then one gets a much more accurate
description than saying that someone is a Fascist, Nazi or Communist.

In my view, it is rather dangerous to use labels, rather than the
underlying concepts, it reduces politics to name calling.

Interestingly, Thatcher fitted in the radical/authoritarian quadrant,
and Blair's blatant disrespect for UK law and the constitution (what
he has done is barely credible) and his current assault on civil
liberties, ironically put him in the same area.

It is quite a handy tool for analyzing things.

One thing I note about Pareto efficiency is that it disregard equity
and that it is based on the existing distribution of income and
wealth.

I've also read that Pareto efficiency does not help judge whether a
change is economically good or bad.

It is also said to be a weak but widely accepted standard for
comparing economic outcomes, because there may be many efficient
situations and the Pareto test doesn't tell us how to choose between
them.

I'm really confuse about this, can anyone please help me???

Ok chekngan-ga 

You and I in a boxing ring

Who hurts more ?

Is it 'better' that I hurt less and you hurt more ?

Can you compare my broken tooth with your snapped neck ?
Pareto came up with a neat solution - 'Never backwards'

It is contrived, because I might be a sadist and /enjoy/ ripping you
into variations of offal and steak

- Pareto suggested a solution - don't compare Utility

Hmm..

I got your point wrong, I was expecting you to be comparing 'Utility'
so I mis-read your question - and gave an irrelevant reply.

The thing about Pareto, is that there are many Optima ( basically one
or more person is better off ),

Pareto Efficient in the 'weak case' is where some are better off, and
others no worse off

Pareto Efficient in the 'strong case' is where everyone is better off.

That is where you got the 'weak' bit from.
'Strong Case' and 'Weak Case' are the technical terms.

There is also the 'Optimum Optimorum' which is where everyone is
better off, and there is no possibility of shuffling things so that
anyone can get better off. It makes a lot of sense when you start
playing with Indifference Curves.

does anyone reckon i've to understand 'welfare economics' first before
i can understand 'pareto efficiency'? cos i havent had a clue what has
'indifference curves' can be used to explain pareto efficiency..

i'm in deep trouble, ain't i? i hope my lecturer goes through this in
class soon.. how are we suppose to write an essay on this without
first learning about it? Please help me... i'm stressing my ass off..
due date is in 2 weeks' time!

@chekngan-ga 

Ok, we'll start from the top.

Welfare Economics is just a load of rubbish explaining why you should
give your hard earned cash to a bunch of no-good-nicks
- if you have not studied it - forget it - for now

Indifference curves are probably your next lesson
- when they turn up, post another question
- for now - forget it

Pareto Efficiency is a very useful concept
- think of it as Pareto 'Inefficiency'

A Pareto Inefficient situation is where someone can be better off
without anyone being worse off.
Like someone has over ordered in a Chinese restaurant 
(and the kitchen is closed)
- and somebody else really wants those wasted king prawns

The 'Weak' case is when NOT EVERYONE is better off (shouting deliberate)
The 'Strong' case is when EVERYONE is better off

You need to do a search for the 'Optimum Optimorum' which is where any
change would lead to one or more people being worse off
(personally I can see more than one of those situations, but you don't
need to worry about that yet)

You will find that the Pareto approach is a useful tool for evaluating
situations without having limp wristed conscience stricken
'donationists' confusing the matter.

Later, you will find it a useful concept for analysing any form of
trading, be it between neighbours or internationally.

The best thing is to explain what you /already/ know about a subject,
and then describe what you need to know.

If you have just been asked to describe 'Pareto Efficiency' then you
have enough for your essay :
 1) the principle
 2) the 'weak' case
 3) the 'strong' case
 4) the optimum optimorum

You could then spend a little time on Wikipaedia, just checking out
what the guy was interested in
- the Alpha touch is to add unexpected but interesting seasoning

gosh! i finally have some understanding regarding Pareto Efficiency!!

i can explain it using the Edgeworth Box, using indifference curves.
in a senario where there's only 2 consumers, Adam and Eve, between 2
products, apples and leaves, the allocation of resources that is
pareto efficient.

i've also understand what it meant by pareto efficiency does not
regard equity. there can be many pareto efficient allocations, but it
doesnt tell us which one is the best. Adam can be given all the apples
and leaves, Eve gets nothing, but yet it is still pareto efficient,
cos adam is made better off without making eve worse off. am i right?

frde-ga, i still cant find anything on "optimum optimorum" and i still
dun understand what it meant by WEAK case or STRONG case.. I'm sorry
but can u gimme some examples?

I am getting proud of you.

You might make an Economist yet - in which case go for something very different.

The 'strong' case is where Adam and Eve both enjoy a sh*g.

The 'weak' case is where Eve is looking at her watch

You will never forget that.

Keep looking for the Optimum Optimorum
- personally I reckon that there could be many of them

Economics is quite interesting 
- if one understands the ideas rather than parrots the bulls*t


You'll get there

frde-ga,

the way u put it, am i right to say that the 'strong' case is when
both of them are enjoying the sh*g, hence both Adam and Eve are better
off. as for the 'weak' case, ONLY Adam is enjoying the sh*g, hence
he's better off, but Eve's looking at her watch, which means she's not
enjoying as much as Adam, but also not worse off. Am i correct?

another question: 

is 'Strict Pareto Criterion' = 'Strong Case'? and
'Weak Pareto Criterion' = 'Weak Case'?

You've got the picture on 'weak' and 'strong'

I've not heard of 'Strict Pareto Criterion'
- its probably something someone has made up