The Myth of Social Efficiency

Apropos of whether certain land policies with respect to cottagers in England were "socially efficient," I commend this quotation from Frank van Dun: "There is no point in terming a real action by a real person inefficient because it does not match the predicted action of a theoretical construct in some economist's model of the world." ("Economics and the Limits of Value-Free Science," Reason Papers, Spring 1986)

And while I'm on the subject, here's another relevant quotation, from Murray Rothbard: "[I]ndividual ends are bound to conflict, and therefore any additive concept of social efficiency is meaningless. . . . Efficiency . . . can only be meaningful relative to a given goal. But if ends clash, the opposing group will favor maximum inefficiency in pursuit of the disliked goal. Efficiency, therefore, can never serve as a utilitarian touchstone for law or for public policy. . . . [C]osts, as Austrians have pointed out for a century, are subjective to the individual, and therefore can neither be measured quantitatively nor, a fortiori, can they be added or compared among individuals. But if costs, like utilities, are subjective, nonadditive, and noncomparable, then of course any concept of social costs, including transaction costs, becomes meaningless." ("The Myth of Efficiency," in Time, Uncertainty, and Disequilibrium, Mario Rizzo, ed.)

So let's hear no more about the social or economic efficiency of land policy.