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It is not the case that Kaldor's compensation criterion has dubious ethical value when compensatory transfers are not actually performed
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Reasons For
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Reason for
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1.
If compensatory transfers are not performed, the losers remain losers
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2.
The mere possibility of compensation does not constitute actual welfare improvement for the losers
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Reasons Against
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Reason against 1 of 2
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1.
Rawls's difference principle requires that inequalities benefit the least advantaged in actuality, not merely in hypothetical possibility.
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2.
A criterion permitting uncompensated losses treats persons as means to aggregate welfare, violating Kantian constraints on using individuals instrumentally.
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3.
Hypothetical consent to losses one never actually recovers from cannot ground distributive legitimacy under any contractualist framework.
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Reason against 2 of 2
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1.
Sen's capability approach holds that justice must be evaluated by actual freedoms achieved, not potential states that remain unrealized.
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2.
Kaldor-Hicks efficiency permits outcomes where identifiable individuals bear permanent welfare losses, making it structurally indistinguishable from exploitation.
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