IN a recent paper, Richard Posner' argues that "wealth maximization"'2 serves as an appropriate principle for social choice. Perhaps his most striking claim is that wealth maximization is not dependent on any initial distribution of resources among individuals but rather determines what such a distribution must be. In this paper, I take the view of modern economic theory and argue that Posner's optimism is misplaced; questions of social choice cannot in general be adequately resolved by the apparently objective criterion of the maximization of real income. However, it is known that if one starts from a socially correct position the criterion of value maximization rightly indicates where one should continue in response to small changes in the state of the world. Thus, it will be seen that the value criterion can be of use when the correct distribution has already been attained by other means. The appropriateness of value maximization is of considerable importance to the recent literature on the economic optimality of legal processes, since the arguments developed there typically make use of the value criterion.3 Compared to Posner's discussion, the concerns of this paper will be narrow, being confined to the traditional point of view of welfare economics with its emphasis on consistency of choice. Nonetheless, the real-income criterion is clearly of great interest to economists, and a considerable literature assessing its usefulness already exists. Most of this discussion arose from the great debate over the compensation principle of the new