In the 1940s the Russian-born British economist Abba Lerner (1903–82) formulated what he called the ‘first fundamental welfare theorem’,13 which basically states that competitive markets lead to ‘optimal’ outcomes for all. Once market exchange at equilibrium prices has taken place, no one can be made better off, or, in economic parlance, have their ‘welfare’ increased (for example, by accepting more work) without making someone else worse off.
