Hi Simon, I want to push back on your claims about markets a bit.
Markets are great, especially when there are minimal market failures. I love them. They are responsible for a lot of good things. But the first and second fundamental theorems don’t conclude that they maximise social welfare. That is a widely held misconception.
The first concludes that they reach a point on the Pareto frontier, but such a point could be really quite bad. e.g. a great outcome for one person but misery for 8 billion can be Pareto efficient. I’m not sure that extreme outcome is compatible with your specification (as without market failures, perhaps one can say everyone will also be at least as well off as now), but a world where billions are still living in poverty as they are today is definitely compatible with the 1st theorem plus no market failures, yet is definitely not maximising social welfare.
And the 2nd theorem says that a massive transfer plus markets can reach any Pareto optimal outcome (including a genuinely socially optimal one). However, it is often the transfer that is doing most of the work there, so the conclusion would not be that markets maximise social welfare, but that in combination with a potentially radical redistribution they do.
Thanks for the clarification, and apologies for missing that in your original comment.