well, seems to me a matter of semantics. How would you define complete efficiency? Also take into account other systems and their respective externalities.
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well, seems to me a matter of semantics. How would you define complete efficiency? Also take into account other systems and their respective externalities.
To speculate is human; to hedge, divine
well economists usually use the pareto scale of efficiency.
Given a set of alternative allocations of, say, goods or income for a set of individuals, a change from one allocation to another that can make at least one individual better off without making any other individual worse off is called a Pareto improvement. An allocation is defined as Pareto efficient or Pareto optimal when no further Pareto improvements can be made. This is often called a strong Pareto optimum (SPO).
here's a wiki quote which applies to what we're talking about.
Under certain idealized conditions, it can be shown that a system of free markets will lead to a Pareto efficient outcome. This is called the first welfare theorem. It was first demonstrated mathematically by economists Kenneth Arrow and Gerard Debreu. However, the result does not rigorously establish welfare results for real economies because of the restrictive assumptions necessary for the proof (markets exist for all possible goods, all markets are in full equilibrium, markets are perfectly competitive, transaction costs are negligible, there must be no externalities, and market participants must have perfect information). Moreover, it has since been demonstrated mathematically that, in the absence of perfect competition or complete markets, outcomes will generically be Pareto inefficient (the Greenwald-Stiglitz Theorem).
In a society without formal ownership of Capital and resources, what good would selling it be?
