Efficiency, Equality and Public Policy

Yew-Kwan Ng provides arguments for the exclusive concern with efficiency ("a dollar is a dollar") in all specific areas of public economic policy, leaving the objective of equality to be achieved through the general tax/transfer system. Public policies should ultimately maximize the sum of individual welfares which should be individual happiness rather than preferences. Relative income and environmental disruption effects cause a bias in favour of private spending which is no longer conducive to happiness socially. Welfare can be increase more by higher public spending on research and environmental protection, including the perfection of the techniques of brain stimulation to increase happiness.