On a fallacy in the Kaldor-Hicks efficiency-equity analysis

This paper shows that implicit assumptions about the numeraire good in the Kaldor-Hicks efficiency-equity analysis involve a "same-yardstick'' fallacy (a fallacy pointed out by Paul Samuelson in another context). These results have negative implications for cost-benefit analysis, the wealth-maximization approach to law and economics, and other parts of applied welfare economics-as well as for the whole vision of economics based on the "production and distribution of social wealth''.