Question

During the late nineteenth century, the Marginal Revolution transformed economic theory by substituting the classical labor theory of value with subjective utility. Early marginalists conceptualized utility as cardinally measurable—a quantifiable magnitude akin to physical mass—which theoretically permitted interpersonal comparisons of utility. This cardinalist framework offered a robust formal justification for egalitarian redistribution: premised on the assumption that the marginal utility of wealth diminishes as wealth increases, transferring resources from the affluent to the impoverished necessarily expands aggregate societal welfare.

However, the subsequent ordinalist paradigm, formalized in the 1930s, contended that utility reflects merely an individual’s internal ranking of preferences. Because ordinal rankings lack a uniform metric extensible across disparate individuals, the ordinalist shift rendered interpersonal utility comparisons epistemologically invalid within formal economics. Consequently, welfare economics retreated to the Pareto criterion, which posits that an economic state is definitively superior only if it improves at least one individual's position without worsening anyone else's. By adopting this stringent condition, the discipline effectively abdicated its capacity to unequivocally validate any redistributive policy that imposes an involuntary cost on one party to benefit another.

Based on the passage, an economist adhering strictly to the ordinalist paradigm formalized in the 1930s would be most likely to reach which one of the following conclusions regarding a tax policy that significantly elevates the subjective preference rankings of the impoverished while slightly lowering the subjective preference rankings of the affluent?