ABSTRACT
Application of welfare economics to the evaluation of the general economic system, mainly in the first part of this century, has been guided by a methodology which can be stylized in four steps:
(a) specify the welfare criteria contained in maximum welfare W*,
(b) specify the required conditions and underlying assumptions for obtaining maximum welfare W* in an ideal economic system,
(c) take the two alternative options of economic systems, competitive markets and state control; study and evaluate the mechanisms of such systems in the real world in realizing W, and
(d) study and evaluate the performance of the
1.1 Introduction 1 1.2 Welfare criteria 2 1.3 Requirements for obtaining maximum welfare in a general economic
system 5 1.4 Discussion of underlying assumptions 6 1.5 Mechanisms of alternative economic systems 7 1.6 Performance of alternative economic systems 7
two systems and the resulting differences between W and W* for each system in the real world.
