Predation, Efficiency, and Inequality
This paper shows how predation breaks the links between an economy's aggregate resourceendowment and aggregate consumption and between the interpersonal distribution of endowments and the interpersonal distribution of consumption. We construct a general-equilibrium model in which some people (the privileged) are well endowed with resources and other people (the unprivileged) are poorly endowed with resources and in which each person can choose to be either a producer or a predator. Here, the choice by some to be predators decreases decreases aggregate consumption, both because the predators' resources are wasted and because producers sacrifice production by allocating resources to guarding against predators. Analyzing this model we find that the minimum equilibrium ratio of predators to producers depends on the technology of predation. Also, the equilibrium ratio of predators to producers equals its minimum value if and only if the ratio of unprivileged to privileged people is not larger than this minimum value. These properties imply that, in contrast to a model that abstracts from predation, the fully egalitarian distribution of resources does not satisfy the Rawlsian criterion of maximizing the consumption of the person with the lowest consumption. (In fact, the fully egalitarian distribution is not even Pareto efficient). Instead, the Rawlsian criterion selects an unegalitarian distribution of resources in which the ratio of unprivileged to privileged people equals the minimum ratio of predators to producers and in which unprivileged have only the minimum possible endowment of resources. In the resulting Rawlsian equilibrium, only unprivileged people choose to be predators rather than producers and because both the ratio of predators to producers and the amount of resources predators waste are minimized aggregate consumption is maximized.
|Date of creation:||Dec 1997|
|Publication status:||published as Herschel I. Grossman & Minseong Kim, 2002. "Predation, Efficiency, and Inequality," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(3), pages 393-, September.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-1288, December.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:6301. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.