ABSTRACT

Citizens have two entitlements. As owners of property, inclusive of their own skill and labour power, they are entitled to the return from their property, appropriately adjusted by taxes and transfers. As voters they are entitled to influence the rules of society, including those rules that provide them with income in the form of unemployment insurance, an old age pension, welfare, and so on. Naturally, the entitlements conflict at the margin, but that is not the subject of this chapter. Of each entitlement separately, it may be asked i) whether there is a predictable outcome for society as a whole when each citizen exercises his rights in his own interest exclusively, and ii) whether that outcome is desirable in any sense of the term. For entitlement to property, the standard economists’ answers to these questions are ‘yes’ and ‘yes’, subject to well-known qualifications and interpretations that need not be discussed here. That is the principal message of the fundamental theorems of welfare economics.