Given my admission that I am now going to talk more about inequality, it is important for me to show a bit more analytical respect to the concept of the ‘equity-efficiency trade-off’. This is a term that is often used in economics, and that we often use here, but which on the blog I have only explicitly dug into once before – back in 2008.
The reason I often prefer not digging myself into the equity-efficiency trade-off concept too much is that I fear I won’t dig myself out, and if I do I doubt much would come from it. It is an overarching concept that exists in economics, one that we have to be sure we consider whenever we ask a specific question. However, without reference to a question there isn’t terribly much to say.
When it comes to the equity-efficiency trade-off associated with policy and social organisation, it is clear that we cannot clearly separate individual concepts associated with fairness – ideas of inequality and poverty will be inextricably linked, one of the key reasons why I dislike to push by the Spirit Level to solely place focus on inequality.