me: >>> As I said, we should see costs and benefits as both being _vectors_ >>> (arrays of numbers) rather than as being _scalars_ (single numbers >>> created via bogus aggregation). The individual numbers in the two >>> vectors are the relevant data, not the sums. The only way to deal with >>> competing goals, imperfect information, and subjectivity is to ground >>> all decisions in democracy to the extent that it's possible. We cannot >>> "solve" this political problem by simply assuming that market prices >>> (or some other arbitrary set of prices) represents "true" costs and >>> benefits and thus can be used to aggregate. Instead of solving the >>> political problem, it's hiding it and sneaking in an agenda that >>> involves market-worship.
David B. Shemano: > How is a citizen in your democracy supposed to make a decision? You would > want the citizen to be informed, would you not? Is not a cost-benefit > analysis information that a citizen should have in reaching a decision? < To repeat myself (again!) in different terms, it's not the (usual) cost-benefit analysis that's worthwhile. Rather, it's the details, i.e., the _list_ (or vector) of various costs and benefits that result from a product or choice. These details, not the over-all analysis, are what should inform the citizen under democracy. The usual c/b analysis is of the sort that Michael Perelman cites: they find or cook up some market prices and then use them to add up costs and benefits. The problem is that market prices -- and such "shadow" or cooked-up prices as the "value of human life" -- reflect the currently-existing distribution of wealth and power, along with the overall structure of the society. For example, in Michael's real-life example, the "value of human life" was guesstimated using the (Adam Smithian) theory of compensating wage differentials as its basis. This theory assumes that in order to get an underground coal miner to do such a dangerous job, he or she must be paid an hourly bonus in compensation relative to the wage paid to a safe job done by a person with equal skill and experience (and the job has equal responsibility, etc, so that the only difference between the two jobs and the two workers is the degree of peril that the coal-miner is under). The problem with this theory is that (in addition to the fact that there are no two jobs that are exactly the same except for the degree of danger) is that workers are not totally mobile between jobs. In addition to various institutional and natural barriers to mobility, life under capitalism almost always involves persistent and significant unemployment (hidden or overt). This means that coal miners do not simply look at the imaginary peril-free job as the alternative. They also look at the risks and costs of being unemployed and needing to seek a new job to pay the bills, etc. That is, like the men in the 1953 film "The Wages of Fear" by Henri-Georges Clouzot (redone poorly by William Friedkin in 1977's "Sorcerer"), desperate people will take jobs like trucking nitroglycerin through windy mountain roads in order to pay debts, etc. The Smithian world of the compensating wage differentials totally lacks elements of the human condition such as desperation and the lack of decent choices. It's an imaginary world. The research I've done indicates that workers receive compensating wage bonuses only when they're unionized. That suggests that implementing these bonuses involve the familiar collective action problem: paying such wages is good for workers as a group but (likely due to desperation) there are some "free riders" who are willing to take a risky job without any kind of extra compensation, thus driving wages down to the lowest common denominator. Pen-l alumnus Peter Dorman has done a lot of work criticizing the compensating wage differential theory. > Clearly, the cost-benefit analysis will necessarily include the subjective > valuations and assumptions of the person preparing the analysis, and the > citizen will have the right to reject those valuations and assumptions and > substitute his own when making the decision. But that reality only > highlights the limitation of the analysis, and does not contradict that the > analysis is valuable information that the citizen should have in making the > decision. < Unfortunately, the subjective valuations -- such as assuming that market prices equal true costs -- are usually not made obvious. C/B analysis is almost always dressed up in fake-scientific garb, with false pretensions of objectivity. The authors know that they're making sausage and they don't want people to know what went into it. > I am trying really hard to understand your point (and Michael's point), but I > don't see anything other than criticism of specific analyses when they reach > conclusions you don't like.< I guess my prose isn't good enough. I'll have to restate my opinion in another way (some other time). But here's a summary: Cost/benefit analysis can be okay _in theory_ (when it provides new information that citizens can use) but it almost always is bogus _in practice_ (especially as practiced by orthodox economists). -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
