Calabresi V. Pareto. Preferences, Harm, and Efficiency

Calabresi has developed a powerful critique of Pareto’s efficiency in the field of law and economics. Among other things, he has shown that Pareto improvements require the unanimity of the relevant preferences (because they require, at least, that someone is better off and no one is worse off). The present work aims to defend Pareto’s test for efficiency, with an argument built upon Mill’s ‘Harm Principle’ and thanks to the analytical distinction between self-regarding and other-regarding preferences, which, for short, I will call internal and external preferences. If the core of Calabresi’s critique is the unanimity condition required by Pareto’s test, this requirement can be better satisfied by counting only internal preferences and justifying this with Mill’s Principle. At the same time, the work explores the limits of the redefined Paretian approach.