The normative elements underlying efficiency are more complex than generally portrayed, and rely upon ethical frameworks that are generally absent from classroom discussions. Most textbooks, for example, ignore the ethical differences between Pareto efficiency (based on voluntary win-win outcomes) and the modern Kaldor-Hicks efficiency used in public policy assessments (in which winners gain more than losers lose). For the latter to be ethically palatable, society must have in place basic institutions of justice, transparency, and accountability. Normative economics thus requires a pluralist approach that includes considerations of virtue and duty, closer to Adam Smith’s Enlightenment conceptions. This surprising finding should embolden economics teachers to engage students with critical thinking problems that are controversial and relevant, and which better prepare students for a complex world.

Document Type

Post-print Article

Publication Date


Publisher Statement

Copyright © 2017 Taylor and Francis. Article first published online: 16 DEC 2016.

DOI: 10.1080/00220485.2016.1252294

The definitive version is available at:

Full citation:

Jonathan B. Wight, "The Ethics Behind Efficiency," The Journal of Economic Education 48, no. 1 (2017). 15-26.

Included in

Economics Commons