The questions of the goods distribution in the economic theory of welfare

Kravtsov, Alexandr and Кравцов, Олександр Олексійович (2019) The questions of the goods distribution in the economic theory of welfare. Причорноморські економічні студії (42). pp. 6-11. ISSN 2524-0897

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Abstract

The purpose of the research is to generalize the approaches on determining the level of the welfare and the role of free exchange in achieving a situation of effective distribution of goods according to the Pareto criterion. The article considers individualistic and institutional approaches to determining the level of the welfare in modern economic theory, analyzed their advantages and disadvantages. The dominance of the individualistic approach is due to its objectivity, which is based on the criterion of the effective distribution of goods, proposed by V. Pareto. The distribution of benefits in accordance with the first theorem of the economy of welfare is analyzed in the article. With the help of Edgeworth's box, the “fiasco” of free exchange of goods in the situation of choice according to the criteria of effectiveness and justice is illustrated. It is proved that the effective distribution of goods according to the Pareto criterion can be achieved only in “ideal” conditions.

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