Der soziale Überschuß als Kriterium wirtschaftspolitischer Maßnahmen im mikroökonomischen Bereich

Abstract

Social Surplus as a Criterion of Economic Policy

Recent analysis both in the field of price and investment policies has increasingly reverted to the social surplus criterion. The author attempts to clarify three of the problems involved in its application to empirical analysis. Social surplus is frequently conceived as the sum of consumers’ and producers’ rent. These two kinds of rent are, however, not independant of each other. To analyse the interdependance between them, the relation of product markets and factor markets must be considered. For this purpose entrepreneurs’ rent and factors’ rent are introduced into the analysis. It can be shown that consumers’ rent is the exact equivalent of factors’ rent and producers’ rent the exact equivalent of entrepreneurs’ rent. Consumers’ and producers’ rent are related to the extent to which producers take part in the consumption of their own products. Most authors who employ the social surplus criterion as a guide line for economic policy would seem not to be fully aware of its political implications. Social surplus is frequently directly related to paretian welfare economics and the surplus identified with utility. Paretian welfare economics and the social surplus analysis can however be shown to maximize two distinct objectives with rather different political implications. The former, by treating every person’s indifference map at the same level, contains something of an egalitarian value judgement. The latter, aiming at satisfying to a maximum only those wants that can be expressed in terms of market demand, contains something of a pecuniary value judgement. In a capitalistic society there seems to be a fair chance that such a pecuniary value judgement be politically acceptable. Social surplus is subject to the limitations of partial analysis. Consequently, if a positive surplus is computed for a number of projects, it does not necessarily mean that all of them should be untertaken. The surplus criterion cannot be applied simultaneously but only consecutively. The optimal sequence of economic measures is that one which renders the highest surplus. This sequence will normally be difficult or even impossible to calculate. On the other hand there is no guarantee that maximizing social surplus at each step will only render this optimal sequence. The problems arising from this dilemma suggest great caution in drawing immediate political conclusions from such an analysis