 Let us first define the Pareto criterion. Consider a society of n individuals, each of whom has a well-defined preference over all possible states of the world. The Pareto criterion states that a state of the world x is socially better than a state of the world y if and only if each individual considers state x at least as preferred as state y and at least one person strictly prefers x to y. It follows from this definition, of course, that, if each individual prefers x to y, then x is socially better than y. 