From an anarcho-capitalist and Austrian perspective, the attack of these subjects is severe. The core criticism is that welfare economics often dresses political value judgments in mathematics and presents the result as scientific optimization.
The Austrian objection starts earlier than the libertarian one.
There is no measurable quantity called âoesocial welfare.â
You value a steak dinner. I value the money more. We trade. Both reveal, through action, that each prefers the new situation.
Economics observes the voluntary exchange.
Now a welfare economist writes something like:
Social welfare = Aliceâ(TM)s utility + Bobâ(TM)s utility + Charlieâ(TM)s utility.
The Austrian response is: what units are you adding?
Utility is ordinal. You prefer A to B. This does not mean your satisfaction is 17.3 units and mine is 12.8 units.
You cannot scientifically establish that taking $1,000 from one person causes less lost utility than giving the money to another person creates.
You can support redistribution as a moral or political position. But calling the resulting calculation a social welfare function does not transform the moral judgment into an objective measurement.
âoeSociety choosesâ is dangerous language.
Individuals choose. Individuals act. Individuals own things. Individuals bear costs.
âoeSociety decided to spend $10 billionâ usually means a political process selected an expenditure and taxpayers were compelled to finance it.
From an anarcho-capitalist perspective, aggregating millions of people into a fictional decision-maker hides the essential question:
Who decided?
Who pays?
Who benefits?
Who refused?
What happens to the person who says no?
Social choice theory deserves some credit here. Its own results expose serious problems with turning individual preferences into a coherent âoewill of the people.â
The Condorcet paradox shows that majority preferences can cycle. Arrowâ(TM)s theorem shows that no general ranking system satisfies several attractive conditions simultaneously.
The anarcho-capitalist reaction is almost sarcastic: you spent decades proving mathematically that there is no coherent social preference ordering, then continued discussing how experts should optimize social welfare.
Pareto efficiency is much narrower than political rhetoric suggests.
Pareto efficiency has a legitimate analytical meaning. The trouble starts when economists move from voluntary exchange to hypothetical compensation.
Suppose a regulation gives Group A benefits economists estimate at $100 million and imposes costs of $60 million on Group B.
Some welfare analysis says the policy produces a $40 million net social gain.
The libertarian response is simple: Group B lost $60 million. Did anyone ask them?
If A gains $100 and B loses $60, saying âoesociety gained $40â treats separate people as entries in one accounting ledger.
An anarcho-capitalist rejects the premise. A benefit to one person does not cancel an imposed loss on another person merely because an economist performs subtraction.
The knowledge problem destroys the fantasy of optimization.
This is the Austrian argument associated especially with Friedrich Hayek.
Economic knowledge is dispersed. Prices contain information produced by millions of independent decisions. Preferences change. Local circumstances change. Resources have competing uses.
A central analyst does not possess the information needed to calculate the âoeoptimalâ allocation.
A market does not require one person to know everything. Prices coordinate plans without a central mind directing the entire system.
Welfare economics often asks, âoeWhat allocation maximizes welfare?â
The Austrian response is, âoeYou do not know the relevant preferences, opportunity costs, entrepreneurial discoveries, future alternatives, or counterfactual prices required to answer your own question.â
The calculation problem is worse without genuine market prices.
This is the argument strongly associated with Ludwig von Mises.
A bureaucrat deciding whether resources should produce railways, hospitals, housing, batteries, or server farms needs meaningful prices for capital goods.
Those prices emerge from exchange, private ownership, profit, and loss.
Without genuine market pricing, planners are not optimizing. They are allocating according to administrative rules, political pressure, historical budgets, lobbying, and guesswork.
A spreadsheet does not solve the economic calculation problem. More computing power does not solve a missing-price problem.
âoeMarket failureâ analysis often compares reality with an imaginary perfect market.
This is one of the strongest libertarian criticisms.
The usual pattern is:
Real markets have imperfect information, transaction costs, externalities, monopolistic tendencies, and unequal outcomes.
Therefore, government intervention might improve the result.
The missing step is institutional comparison.
Government officials also have imperfect information. Regulation has compliance costs. Voters are rationally ignorant. Agencies seek larger budgets. Politicians respond to concentrated interest groups. Regulations create unintended consequences.
The relevant comparison is not:
imperfect market versus perfect government.
The relevant comparison is:
imperfect market process versus imperfect political process.
Once you make that comparison, many clean textbook conclusions become much weaker.
Social choice theory accidentally supplies ammunition to libertarians.
This field is less inherently collectivist than welfare economics.
Social choice theory demonstrates that collective decision mechanisms have deep structural problems.
Majority rule can cycle.
Agenda setters can influence outcomes.
Strategic voting changes results.
Different voting systems produce different winners from the same underlying preferences.
There is no neutral mechanism for converting individual rankings into a single collective preference under all desirable conditions.
A libertarian conclusion follows naturally: if collective choice is structurally problematic, reduce the number of decisions imposed collectively. Leave more decisions with individuals, families, firms, voluntary associations, insurers, cooperatives, charities, and contractual communities.
Social choice theory often asks, âoeHow should everyone collectively choose one option?â
The anarcho-capitalist asks, âoeWhy must everyone choose the same option?â
That question cuts much deeper.
The deepest conflict concerns consent.
Mainstream welfare economics often focuses on outcomes.
Anarcho-capitalism focuses heavily on means.
Suppose forced redistribution produces a statistical improvement under some selected welfare function. The anarcho-capitalist still asks whether coercion became legitimate because an economist assigned weights to different people's utility.
From this perspective, the central problem with much welfare economics is not bad arithmetic. The problem is a category error.
Economics studies choices, scarcity, exchange, prices, production, and consequences.
The moment an economist says, âoeThis distribution is socially better,â a moral judgment has entered the analysis. The economist should identify the ethical assumptions instead of presenting them as a technical output.
The harsh Austrian verdict would be this:
Welfare economics starts with subjective individual preferences, admits they cannot be directly measured or meaningfully added across people, constructs a mathematical social welfare function anyway, inserts political judgments into its parameters, and then announces an âoeoptimalâ social outcome.
Social choice theory is more interesting because much of its best work demonstrates why the phrase âoesociety prefers Xâ is often logically unstable.
The anarcho-capitalist alternative is less ambitious and more disciplined: voluntary exchange, private property, freedom of association, decentralized decision-making, and liability for harms. Instead of trying to maximize an imaginary aggregate welfare number, allow people to pursue different goals and coordinate through consent.
The strongest criticism is not âoeall welfare economists are socialists.â Many are not. The stronger accusation is that the framework gives technocratic politics a scientific-looking vocabulary. Words such as optimization, social welfare, efficiency, and compensation criteria often conceal the real political questions: whose property is taken, who decides, who pays, and whether refusal is permitted.

that phrase has no meaning, especially in this context. Who is dying of thirst in a desert and is forced to pay a huge premium not to die? Samsung should absolutely get as much money now as it possibly can, eventually the profits will reduce to a trickle, they will need all of this extra fat to survive, good for them. You can build your own memory manufacturing plant if you don't like the prices and think you can sell memory cheaper in this current market, go, do it.

The ONLY problem is that not everyone else has done so yet. Government shouldn't be allowed to tax income and profit.

Sure. The reason for stupid ideas, like Lysenko, taking over is lack of competition, which is inherent to communism, In a capitalist system people are searching for ways to make money for themselves, so there are enough competing ideas being tried out with private money. If the money runs out before profits are made, the ideas stop. When government can keep subsidizing bad ideas they don't stop, they just keep getting bigger and more stupid.

Obviously. I am currently looking for a data provider for various IOT devices, talked to all major providers, talking to ton of others. Major providers demand that equipment is approved by their networks, in conversations this is all about keeping cheaper equipment out of the country, that's all.

sure, these are choices that stem out of another choice, namely out of the choice to have private ownership and operation of property. If the factory is private property, then it is operating in an environment that promotes and defends private property rights. This means nobody us forced to work there also, not just that nobody is owed a job there. In this environment competition is inevitable and it is competition for the purchasing power of individual buyers. So the demand and purchasing conditions are at least partially dictated by the totality of individual choices of all market participants. This is a policy choice, this is the choice I personally prefer as well.

I don't even understand what died in Britain this time. Surely even before today it was up to the parents to purchase a phone or a tablet or any type of a computer and give it to their children. There is no way for google or anyone to know who is using a phone or a tablet. Today with AI I suppose it is possible to use filters to attempt automatic detection of the person who is livestreaming and allow AI decide if this person is old enough and if not the livestream will then be terminated (or prevented). This will teach children a few things. First of all it will teach them about VPNs, it will also teach them about disguising their identity to the computer, who is looking at them, while they are showing themselves off to the world. They will find new and creative ways to get around these restrictions, they will not 'innocently play', as politicians are promising. There will not be a return to the "good old days". Parents will set up phones and tablets for their offspring because it is easier than to parent and that will be that.

You are suggesting quite a few things, except you don't like to actually say directly what it is that you want to happen. Here is one thing you said: "Elon Musk should be a wealthy man, no doubt about it but a trillionaire or hell even a $100B is a failure of our economy, our culture, our society or our politics." - 100B is not Musk anymore, it's more than Musk, who I consider to be a con artist.

What you are implying to calling 100B owner a failure of economy and culture and society and politics is that it should be impossible for some reason for a person to accrue enough ownership of private resources to be at that level. It is your inadequacies that are showing here and it is your word play that we are debating. What you are suggesting is oppression and tyranny, nothing less, which is what is required for a person not to be able to accrue any amount of wealth regardless of how it is obtained.

How about this: "I mean, he does. He also still is one person with 24 hours a day, does he actually provide enough productivity to justify tens of millions every day?" - nobody has to justify anything, if they are able to accrue some wealth beyond your imagination does not make it wrong that a person should be able to do so.

To this I have already answered: "Explain this (i am fully anticipating Libertarian-Randian gobbledygook)" - obviously a large amount of accumulated wealth is represented by a business and this business clearly benefits the society much more than the individual who runs it, otherwise the company wouldn't be valuable enough for you to pay attention how wealthy the owner of this company becomes.

This: "Everything you said would equally apply if he was worth $1B as it does $1000B so what does he need the extra 999B? His lifestyle changes 0%. He can still own and run companies." - implies that a person shouldn't be able to have ownership in a company that is growing in value, Musk or anyone else. So if you build a company that becomes so valuable people invest into it enough that its market share, its profits are so large that the value exceeds 100B (on paper, doesn't matter). If you are the single largest owner of the stock in this company your shares go above and beyond 1B.

You are pretending that you are not suggesting confiscation (oppression by the voting majority) yet what else are you suggesting? Be clear, what are your demands and goals? I already see the reasons, jealousy and ideology with a strange belief that a person shouldn't be able to own something of serious value for some reason.

This: "And I would ask just the same what the unhealthy fixation on defending the massive wealth inequality?" - I am FOR wealth inequality, it's the only thing that actually motivates people to move forward with business ideas in the first place. If wealth equality was the goal, nobody would be ruining their lives trying to run a business.

This: " I'll guess if I ask for the alternative you'll point to "communism" and I will just say you are not a serious person with a serious position. Like I said, Randian nonsense." - you are the one bringing up communism and Randian ideas, whatever, you are fixated on the nomenclature.

This: "You say you want to "protect private property" as if what I am suggesting eliminates private property in any fashion." - of course you are. You are suggesting this exact thing, you wouldn't be happy until there wouldn't be "wealth inequality". This requires that people cannot own things cannot operate things as they see fit, cannot go beyond some artificial number that is stuck in your head. You think 1B is plenty and 100B is too much, whatever that is all about. In reality it's all garbage. A person who made a billion dollar company can use the money that he makes to start more companies and eventually go much further than 1B dollars and this bugs the shit out of you because you are on a mission.

I am 100% certain you were the one bringing up communism, I was not. I am against destruction of private property rights, which is what you are suggesting.

what is unsatisfying to you? I am absolutely against majority oppressing a minority via government intervention, a minority in this case is people with more money than most The tyranny of majority leads to redistribution of resources. Communism is not even supposed to have a government. As someone born in the former USSR half a century ago I can point at that system and absolutely refuse it. I can also point at any oppressive system and refuse it. You are proposing an oppressive system, oppression by the force of government backed by the tyranny of majority. I am against it, it leads to destruction of freedoms, economic freedoms being the only ones that matter.

inequality is the resulr of ability to own property and I want this to be protected regardless how much property because I have seen the alternative and it is misery.

What is this unhealthy fixation on what someone is "worth"? It is not a billion tons of gold, it is not a quintillion tons of grains. It is a fiction, a fleeting number on paper that signifies current valuation of a business. Musk does not have a trillion dollars under his mattress. Not even 2 billion.

I think Musk is a con artist, but why is it difficult to wrap your head around a person benefiting less from his billions than the society? Society gets to use these billions in many ways more than the person himself. Society gets the products made by the businesses that are valued at billions, society gets the jobs and paychecks from all of this money. What does the person get except for a headache of dealing with the norms and rules and taxes imposed by the society upon his business? He really doesn't eat much more than the next guy, though his meals will be more expensive because they are cooked by some private chefs. But the cost of the food, chefs, housing, airplanes, whatever is negligible compared to the value of the company that society gets to enjoy. Even just the trading of the stock market allows people to have something to invest into, there are jobs, there are products, then there are various contracts required to maintain this business, so there are other side businesses that rely on the gigantic companies owned by the billionaire.

Again, a billionaire personally can use maybe a few hundred million dollars, maybe even a couple of billion (if he buys a couple of yachts and a few mansions). The gain to the guy is completely negligible compared to the gain to the society. It is like infrastructure in itself, that's what these huge businesses are. To say that this is 'Libertarian-Randian gobbledygook' is simply to use a personal attack in place of an argument.

But again, I am fully convinced Musk is a gigantic fraud, running his empire almost exclusively on vaporware.

Women do not want children in more numbers than ever because they are not marrying, because they follow each other on instagram and other mass hysteria sites where they promote hedonistic living to each other and yes, much of it requires resources and time that otherwise would be allocated to rearing children. Unmarried women rely on the government systems that women (and womenized men) have promoted and voted for over decades. This promoted disconnect between generations, grandparents and other family members are not involved in helping with the kids as previously. Two income household means women are working (because of inflation caused by the women as a voting block people are forced to pay insane percentage of earnings as taxes). Taxes used to subsidise classes of people, especially single women require so much more money that women im families have no choice but to work. Their husbands' earnings are more than halfed by the taxes, so need 2 people to work where previously 1 would have sufficed.

So women as a voting block created the environment of high taxation and subsidization, this in turn requires that more women entered the workforce than ever before. None of this is child friendly, women as a block are truly pushing towards childless society. This is self defeating, the people with more children will inherit the world, which will roll back most of these anti child policies. This will require a demographic collapse first, which is coming within a few decades. Within just 2-3 decades most of the world that has anti child policies will be very old of-course. The age of single childless people will cause an age of single old people. Their policies will die off with them giving apace and rise of various fundamentalist cultures, for example Islam. The only hope is that Israel also keeps their births up and somewhat balances out the Islamists. If not, then the few remaining non muslims will feel very lonely on this planet indeed.

I have no idea what your point is at all. Seriously, are you OK? Just to make it clear - I am against governments, I am against governments using any technology to make it easier for government to oppress people and this is one instrument of oppression.