Efficiency Revisited

The primary aim of every economic system derived from Adam Smith's is specifically and explicitly to maximize efficiency. In economics, as everywhere else, optimal efficiency is achieved when the maximum output is extracted from a scarce set of resources; in other words, when the size of the economic system's pie is maximized, regardless of how the pie is allocated. Now the question is, why? Why is it all-important that the pie should be as large as possible? Why isn't it important who has what sized piece?

In another line of questioning, it can also be asked why it has to be the case that efficiency is all-important in all segments of the economy. Is it true that humans do not have rights to eat, have shelter or adequate health care just by virtue of being human? It may be, but the debate was foregone altogether in favor of an arbitrary and highly self-serving solution by the men who engineered the American system. The reality is that the maximization of the size of the economic pie tends to benefit those who hold the largest pieces to begin with. As such, it is not true that economic efficiency is necessarily good for society.

So far we have stayed at the theoretical level. The section to follow will provide ample and powerful, albeit anecdotal, evidence that unregulated efficiency is in fact highly undesirable for most people.

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