Social Welfare and

Social Justice
Chapter III
Unit I
Presented By
Asst. Prof. Kavita Dive
Indore Institute of Law
Social welfare & social Justice
Social Justice Social Welfare
 Marshall

Economics is to study human activities which
are conducive( Encouraging) to human
welfare in its material aspect
 Economic as a social justice
The Concept of social and economic justice
is a living concept of revolutionary importance
it gives sustenance to the rule of law and
meaning and significance to the idea of
welfare
 Article 39
1. Equal rights of men & women to adequate
means of livelihood
2. Distribution of ownership and control of the
material resources of the community to the
common good
3. equal pay for equal work for both men &
women
4. To ensure that the economic system should not
result in concentration of wealth and means of
production to the common detriment
 5. To protect of health and strength of worker
and tender age of children and to ensure that
they are not forced by economic necessity to
enter avocations unsuited their age of strength
6. That children are given opportunities and
facilities to develop in a healthy manner and in
conditions of freedom and dignity and that
childhood and youth are protect against
exploitations and against moral and material
management
 State under action programme
article 39
Monopolies and restrictive trade practice Act.
MRTP 1969
Development regulation Act. 1951
Land ceiling Acts by state govt.
Equal remuneration Act. 1976
The child labour Act. 1986
The Employment of children Amendment Act.
1985
The employment scheme 1995
The family pension scheme 1971
Social Welfare
 Economics as a basis of social
welfare
Welfare economics is a branch of economics that
focuses on the optimal allocation of resources and
goods and how this affects social welfare. Welfare
economics analyses the total good or welfare that is
achieve at a current state as well as how it is
distributed. This relates to the study of income
distribution and how it affects the common good.

Welfare economics is a subjective study that may

assign units of welfare or utility in order to create
models that measure the improvements to individuals
based on their personal scales.
 Individual Welfare & Social Welfare

Individual welfare refers to the sum total of

satisfaction derived by an individuals from the
consumption of economic goods.

Social welfare is an aggregates of the utilities

or satisfaction of all the individuals in the
society.
 General welfare & Economic welfare

General welfare of an individual refers to the

state of mind or happiness which an individual
enjoys due to number of factors such as
economic
Economic welfare a function of the
satisfaction derived from the use of
exchangeable material goods and services
almost confine with real national income of
the community.
Pigovian welfare economics (Old)
Each individual consumer acts in a rational
manner he attempt to maximise his satisfaction
out of his expenditure
Utility can be measured cardinally and can also
compared interpersonally
Men belong to the same community and to the
same country derived equal satisfaction from real
income
The marginal utility of money to a man goes on
diminishing as his stock of money increases.
 Criticism
The presumption of mans equal capacity for
satisfaction is not scientifically tenable and
cannot from the basis of inter personal
comparisons of utility
 Paretian welfare economics (New)
Any change which harms no one and which
make some people better off must be
considered to be an improvement
 Assumptions
There exists perfect competition
There is perfect knowledge about both the
future and the relevant activities of other in
the present
All the producers are genuine cost minimizers
as well as profit Maximizes
There exist no external effects.
 A Pareto chart is a bar graph. The lengths of the bars
represent frequency or cost (time or money), and are
arranged with longest bars on the left and the shortest to the
right. In this way the chart visually depicts which situations are
more significant.
When to Use a Pareto Chart
When analyzing data about the frequency of problems or
causes in a process.
When there are many problems or causes and you want to
focus on the most significant.
When analyzing broad causes by looking at their specific
components.
When communicating with others about your data.

 Pareto Chart Procedure

1. Decide what categories you will use to group items.
2. Decide what measurement is appropriate. Common measurements are frequency, quantity, cost and
time.
3. Decide what period of time the Pareto chart will cover: One work cycle? One full day? A week?
4. Collect the data, recording the category each time. (Or assemble data that already exist.)
5. Subtotal the measurements for each category.
6. Determine the appropriate scale for the measurements you have collected. The maximum value will be
the largest subtotal from step 5. (If you will do optional steps 8 and 9 below, the maximum value will be
the sum of all subtotals from step 5.) Mark the scale on the left side of the chart.
7. Construct and label bars for each category. Place the tallest at the far left, then the next tallest to its right
and so on. If there are many categories with small measurements, they can be grouped as other.
Steps 8 and 9 are optional but are useful for analysis and communication.
1. Calculate the percentage for each category: the subtotal for that category divided by the total for all
categories. Draw a right vertical axis and label it with percentages. Be sure the two scales match: For
example, the left measurement that corresponds to one-half should be exactly opposite 50% on the right
scale.
2. Calculate and draw cumulative sums: Add the subtotals for the first and second categories, and place a
dot above the second bar indicating that sum. To that sum add the subtotal for the third category, and
place a dot above the third bar for that new sum. Continue the process for all the bars. Connect the dots,
starting at the top of the first bar. The last dot should reach 100 percent on the right scale.
Pareto Chart Examples
Example #1 shows how many customer complaints were received in each of five
categories.

Example #2 takes the largest category, documents, from Example #1, breaks it down
into six categories of document-related complaints, and shows cumulative values.

If all complaints cause equal distress to the customer, working on eliminating

document-related complaints would have the most impact, and of those, working on
quality certificates should be most fruitful.
 Pareto social optimum
Where it is impossible to make a small
change of any sort such that optimum limits of
all the individuals, excepts those that remain
constant, either all increased or all
diminished
 Conditions of paretian optimum
Optimum allocation of products
Optimum degree of specialisations
Optimum factor utilisation
Optimum allocation of factor
Optimum allocation of production
Optimum allocation of a factor units time
Inter temporal allocation of assets