Welfare Economics

Welfare economics is the quasi-academic process of looking at the economy from a social welfare point-of-view, like a do-gooder king looking over his kingdom.

Does x allocation of resources benefit The People? How does y law affect overall social welfare? Hear ye, hear ye, for the common good, more or less.

A key part of welfare economics derives from relative income distribution. Think about the utility of a dollar: it’s much more valuable to a poor person than to a rich person. Since a dollar can provide more utility to poorer people and less utility to those who already have their needs met (the rich), income distribution plays an important role in welfare economics, determining how to best benefit the whole of society over individuals. The higher the overall level of social satisfaction of all, the better...kinda sorta.

The problem: Not everyone in society is equally talented, driven, or lucky.

Welfare economics revolves more around microeconomics than macroeconomics. From an economic and mathematical perspective, welfare economics means allocating resources to their maximum efficiency, with maximum efficiency being the highest social well-being possible based on available resources.

A general global example: the world has the resources and technology to solve world hunger and poverty, yet we still have those things. Moving some food and resources around could greatly lift satisfaction in impoverished areas, perhaps at a slight sacrifice from the areas that resources are taken from. However, from a welfare economics viewpoint, this redistribution of resources is the right thing to do, since there is increased net benefit of social welfare.

But there's a slippery slope. Welfare, in that sense, can't be a short-term commitment. Getting the poor used to being taken care of with (presumably) no desire to work hard to get out of a bad spot...carries different risks.

Politics time. So...we're outta here.