Equity is a fundamental concept for the efficient functioning of the market mechanism. The minimum and maximum limits of distributive equity are analysed on a theoretical level to demonstrate how the functioning of the market requires a minimum threshold of dignified subsistence, while the maximum limit is more difficult to locate in terms of theory. There is no incompatibility between equity and efficiency in most cases. Higher wages increase efficiency if the initial level is very low, while wage increases along a career path boost worker motivation and group efficiency. The market mechanism can satisfy the arguments relating to the merit but does not respond to the arguments concerning the need, except instrumentally in terms of merit. However, the need without merit is the central characteristic of those whose lives depend on others, as in the case of children in relation to their parents or the elderly who are not self-sufficient. The modern Welfare state is a social institution that reflects the reciprocal obligations of equity, from individual family units, all the way to the national, European, and humanity ‘family’. In the European experience, the Welfare is a central institution that reflects reciprocal social obligations and has proven to function effectively in times of crisis, supporting the weakest categories.