A fair world doesn't have to be an inefficient one

ONE common criticism of economics is that it focuses too much on efficiency, and not enough on things such as equality, fairness and the welfare of future generations. In the extreme version of the criticism, the focus on efficiency is a deliberate plot to keep resources in the hands of the wealthy.

The economic definition of efficiency - also called Pareto efficiency, after the Italian economist Vilfredo Pareto - is easy to understand. Basically, it is just the same thing as gross domestic product (GDP). The more things we produce - includi…