Maximizing Gains

This section presents one of the three core analytical tools in ENL: the maximization of human gains from economic activities.

The others are the environmental constraints on production and consumption, and the appropriate population level.

Each of these subjects builds upon the framework and the basic concepts of production and cost and consumption and value as defined in ENL.

Because there are strong interactions among gains, environment, and population, a systematic approach is necessary to avoid errors and confusion. With this in mind, this section deals with gains in isolation from the environment, and assumes that the population level is fixed. Its conclusions are therefore tentative.

ENL's treatment of environmental limits modifies these conclusions by taking the environment into account, but it retains the assumption of a fixed population.

The section on population finalizes the conclusions by considering the effects of population changes.

Needless to say, real-world economies will not follow this artificial pattern: its only purpose is the logical development of ENL's analytical components.

The maximization of gains is a broad topic that includes two specialized areas that are given more extensive treatment separately: labor productivity and trade.

Contents of this section:

Aggregation and Equality Estimating aggregate health effects is indispensable if we are to understand the broad human consequences of economic activities. Read on…
Economic Efficiency Economic efficiency (Ee) is a summary measure that combines production efficiency and consumption efficiency, thus reflecting the economy's overall success in transforming inputs into health. Read on…
Inequality ENL's ethical posture, which is based on the equal worth of human beings, does not preclude inequality if this increases health for all. Equality (sameness) is not synonymous with equity (fairness), and that the two must be distinguished if we are to rationally apply ENL’s ethical position. Read on…
Long Run Optimization In ENL's treatment of the optimization of output quantities it is assumed that value and cost remain unchanged. In graphical terms, this means that the value and cost curves are fixed. Read on…
Optimization In general, to "optimize" means to achieve the best possible outcome, based on the stated objective and any restrictions that apply. Read on…
Optimum Quantity for a Final Output: How Much Bread? If we are trying to maximize gains, the most basic task is to determine the optimum quantity for a single final output, such as bread. Read on…
Optimum Quantity for a Harmful Output: How Many Cigarettes? Some outputs, such as cigarettes, result in sharply negative effectual value because of the severe health problems they cause. Even if such outputs are produced under excellent conditions, allowing workers to gain health during production, the value derived from their consumption will likely be lower than production cost at all output levels. Read on…
Optimum Quantity for an Intermediate Output: How Many Trucks? A transport truck, when used for its intended purpose, is an example of an intermediate output. Such outputs are distinguished from final outputs in that they are not consumed as end products, but are instead used in the production (including transportation) of other outputs — either intermediate or final. Read on…
Optimum Quantity when Value is Zero: How Many Concerts? In many cases, especially in the rich countries, an economy will produce numerous outputs that are non-essential in that they satisfy wants instead of needs. Such outputs either generate no positive health effects when they are consumed, or the health effects are so diffuse or difficult to identify that they cannot realistically be quantified. Read on…
Optimum Scale for the Economy: What Level of Total Outputs? Before addressing an economy's total outputs analytically, it must be introduced as a broader topic in economics. Lumping outputs together has long been a troublesome issue for economic thinkers because it is difficult to measure, or even to properly define, the total quantity of non-homogeneous outputs. Read on…

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