ON REAL ECONOMIC FREEDOM by Serge - Christophe KOLM

A priori, real economic freedom is purchasing (and selling) power. Yet, Xu’s theorem comforts ranking the freedom of choice provided by budget sets as their volume in deriving it from three axioms. However, one and a half of these axioms can be discussed. In contrast, the standard measure of purchasing power leads one to order the freedom provided by budget sets as the distance to the origin of the intersection of the budget hyperplanes with a given ray from the origin. Hence, equal budget freedoms correspond to pencils of budget hyperplanes. Applied to labour and earnings of individuals with different wage rates, this equal freedom yields the distributive principle of equal labour income equalization.