Abstract
It is argued that in strictly egalitarian economies, there is an equilibrium in which social well-being is maximized and that this is so whatever the nature of returns to scale and whether or not the economy is characterized by elements of monopoly, externalities of consumption or production, commodity taxes or subsidies, or the private provision of public goods. As a corollary, the implications of distortions and increasing returns can be effectively studied only in a context of inequality.
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