There is a certain amount of truth in that characterization. By “utopian economics,” Cassidy means, in the first instance, the careful elaboration of the precise scope of Adam Smith’s Invisible Hand. It turns out to be a lot more complicated and attenuated than sloganeering can afford to acknowledge. To begin with, if a market economy is to be advertised as doing an acceptable job, we need a definition of a good economic outcome.

The standard version says that one allocation of goods and services to individuals (call it A) is better than another (B) if everyone is at least as well off (in his or her own estimation) in A as in B, and at least one person is better off. So there is to be no trading off of one person’s well-being against another’s. That sounds fair; but notice that judgments about inequality are ruled out: if everyone is equal but poor in A, and B differs only by making one person fabulously rich, B is better than A. That sounds a little less appetizing, but this extreme case underscores the individualistic nature of the whole exercise: nothing is supposed to matter to anyone but his or her own access to goods and services. Notice also that, by this definition, most As and Bs simply cannot be compared: some people are better off and some worse off in A than in B, so neither is “better” than the other.

The next step is to say that such an allocation is “efficient” if no feasible allocation can leave everybody at least as well off as they were and make somebody better off. In other words, there is no “better” allocation. You would like your economy to lead to an efficient outcome. There are many efficient allocations, some egalitarian and some just the opposite, and none of them is better or worse than any of the others. They cannot be said to be equal either; they are simply not comparable in this language.

It is important to understand what this definition does not mean: it does not say that any efficient allocation is better, more desirable, than any inefficient one. Why not? Suppose you happen to gain from the inefficiency and I happen to lose. Then eliminating the inefficiency does not meet the test for a “better” state: you lose and I gain. More concretely: suppose your favorite plumber would gladly work an extra hour for $50, and suppose that you would gladly pay $50 for the work that she would do in that hour. It would be a socially useful transaction, if no one else were affected. But if your plumber pays a 20 percent marginal tax rate, she would clear only $40, and then this socially useful transaction does not happen. An income tax is “distortionary.” It creates an inefficiency. But now imagine that the tax revenues are used to provide education or health care or other benefits to poor or disabled or otherwise deserving people who would otherwise have to do without. Then one cannot say that the no-tax efficient allocation is better than the inefficient one. Some other criterion has to be invoked.