The Intersection of Efficiency and Equity in Market Dynamics
Delve into the debate surrounding whether society prioritizes efficiency or equity in market systems. Explore how both principles can coexist and the importance of finding a balance between them. Learn from discussions on achieving social justice and antitrust perspectives, examining the faces of efficiency, inclusive development, and the challenges faced by developing economies.
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Professor Eleanor Fox New York University School of Law New Delhi 18-19 Nov. 2013
In matters of markets, does society want efficiency? Or does it want equity? Does the pursuit of equity inevitably undermine efficiency, and can we/should we tolerate the trade-off? Should we really forego a 10% increase in growth if the rich get 8% and the poor get 2%? This was the debate that CUTS-CIRC hosted on the web in the summer of 2013 These are the oft-posed questions, and they set us on a wrong path. Markets can give us both equity and efficiency. We need to set our minds on where equity and efficiency converge.
The book launch of Growth and Equity in honor of Pradeep Mehta Dr. C. Rangarajan: Growth cannot be chased at the cost of equity The lunge of Jeffrey Zuckerman a very curious proposition The retort We cannot live by efficiency alone Stories from the Arab spring the turmoil felt by a great majority of the population that has seen for years some people getting ever richer and some getter ever impoverished Khalifa Tounakti
But how to achieve social justice and equity? Should antitrust say: not our problem? The three positions 1 Yes, it must or we undermine efficiency, make everyone worse off 2 No. The equity demands are compelling. We must do what is fair and just, lest the efficiency principle perpetuate severe injustices keeping the rich rich and the poor poor and unempowered 3 We have been socialized by a conservative antitrust to confuse powerful business interests with efficiency Take back efficiency
The many faces of efficiency The faces of efficiency for a poor developing society/economy that has systemically excluded masses The idea of efficient inclusive development The unknowability within a range of how to design competition law to achieve a more robust economy U.S. assumptions/perspectives compared with EU U.S. the forgotten power of paths for the outsider
1. It would reach the worst restraints These are often by the state 2. It would be friendly to enforcement and not require armies of experts; be simple E.g. what is dominance? 3. Every law has a leaning U.S. leans towards trust the market Pro-poorer lean towards inclusion, no fencing out Cf emerging principles on loyalty rebates: no case unless the conduct excludes an equally efficient competitor 4. Poor need low prices; protect discounting 5. But protect hard competition No quarter for protectionism; adjust, adjust, adjust 6
There is a large space in which efficiency and a vision of a more equitable world co-exist Especially in poorer developing countries with economies monopolized by elites, with large excluded masses from the economic enterprise The country s economy needs the energy and the talents of the people The society and the economy are undermined by the entrenched exclusions THERE IS NO EFFICIENCY WITHOUT EQUITY
