The Present Value Criterion
Efficiency and the Distribution of Wealth THE QUESTION of which criteria to use in "adjusting the rudder" toward a materials policy that will be equitable over the long term is the subject of the next three chapters. In spite of its applicability to problems of taxation, freight rates, and disposal, the efficiency criterion is, in fact, very limited. The (perfected) market will come up with a different efficient allocation of goods and services for each initial distribution of income. As an economist might put it, each efficient allocation of goods and services is conditioned upon a distribution of income or wealth, which functions as a distribution of dollar votes in the marketplace. The efficiency criterion cannot decide between efficient allocations because the choice of the initial distribution of income is logically prior to the workings of efficiency. The best distribution of income is a social question and not one for an economist alone to decide.