Justice vis à vis welfare: how Austrian welfare economics should fit in the Austro-libertarian framework

Abstract

The present work calls for a modification of Austrian welfare economics so that it should be given a distinct role within the Austro-libertarian paradigm. To this end, we clearly distinguish between justice and welfare. We proceed by trying to stick to the spirit of Austro-libertarianism as firmly as possible. In particular, we operate within the universe of voluntary (viz. rights-respecting) exchanges, having assumed the libertarian absolutist side-constraints view of rights. Furthermore, we take for granted the Austrian actual preference satisfaction view. The specific purpose of the present paper is two-fold. First, we subject Austrian rights-based welfare economics to critical scrutiny. Concluding that the above theory begs the question in favor of free market, we assert that to gauge market efficiency we need to resort to some descriptive criterion, which could reasonably be deemed constitutive of welfare. And it is only then that the question of market efficiency is an open question.