Right there with you on the point about how single-minded focus on efficiency is going to lead to negative consequences in the long run. And especially related to your other piece on effective altruism, I remember reading somewhere that clothes donation to certain African countries hit hard with economical trouble actually ended up destroying local textile industry. On the point about inheritance being inefficient, I think I should have better phrased it as irrational, because it involves externalities (love for one's children) that are not accounted for in the assumptions of free market capitalism.

Back on the topic of efficiency, I do believe that one can have an adjusted metric of efficiency and circumvents this problem. As you mentioned, 'making people feel good over all time' is a better metric. There's this valuation method commonly used in finance called Discounted Cash Flow, where you project the utility of an asset over time, and multiply future utility by diminishing coefficients (accounting for uncertainty and time decay). I think the essence of this concept should be applied at every level of decision-making, be it politics, tax laws or charity