Laissez-faire versus Pareto∗

Consider two principles for social evaluation. The first, ‘laissez-faire’, says that mean-preserving redistribution away from laissez-faire incomes should be regarded as a social worsening. This principle captures a key aspect of liberal political philosophy. The second, weak Pareto, states that an increase in each individual’s disposable income should be regarded as a social improvement. We show that the combination of the two principles implies that total disposable income ought be maximized. Strikingly, the relationship between disposable incomes and laissez-faire incomes must therefore be ignored, leaving little room for liberal values.