The Economics of Welfare (book by Arthur C. Pigou)

"The Economics of Welfare" by Arthur C. Pigou explores how markets can sometimes lead to outcomes that do not maximize social well-being, due to external effects like pollution or public health impacts. Pigou argues that government intervention, such as taxes or subsidies, can correct these market failures by aligning private incentives with social welfare. The book emphasizes analyzing economic activity to ensure resources are allocated efficiently, ultimately improving overall societal well-being. It provides a framework for understanding how policies can address externalities, leading to a more equitable and efficient economy.