o economists, efficiency is a relationship between ends and means. When we call a situation inefficient, we are claiming that we could achieve the desired ends with less means, or that the means employed could produce more of the ends desired. “Less” and “more” in this context necessarily refer to less and more value. Thus, economic efficiency is measured not by the relationship between the physical quantities of ends and means, but by the relationship between the value of the ends and the value of the means.
Terms such as “technical efficiency” or “objective efficiency” are meaningless. From a strictly technical or physical standpoint, every process is perfectly efficient. The ratio of physical output (ends) to physical input (means) necessarily equals one, as the basic law of thermodynamics reminds us. Consider an engineer who judges one machine more efficient than another because one produces more work output per unit of energy input. The engineer is implicitly counting only the useful work done. “Useful,” of course, is an evaluative term.