The Value of Wealth: A Comment on Dworkin and Kronman

THE original plan of this Symposium called for Professor Kronman to comment on Professor Dworkin's paper. But Kronman later decided that what he had to say about the subject matter of Dworkin's paper-that is, about the theory of wealth maximization-warranted independent treatment. His comment, therefore, became an article, and the task of commenting on both papers' devolved on me: their principal target. As Dworkin explains, wealth maximization is "achieved when goods and other resources are in the hands of those who value them most, and someone values a good more if and only if he is both willing and able to pay more in money (or in the equivalent of money) to have it."2 The difference between wealth and utility is that wanting something very much, but not being able to pay more for it than its owner or competing demanders, does not establish a claim to a good in a system of wealth maximization, although it might do so in a system of utility maximization.3 Wealth maximization thus excludes claims based on pure desire-claims not backed up by willingness (implying ability) to pay. Resources are efficiently allocated in a system of wealth maximization when there is no reallocation that would increase the wealth of society. I and other economic analysts of law have argued that efficiency in this sense provides a good explanation of many common law rules and principles.4