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To show the terrors of cost benefit analysis we must perform a cost benefit analysis

Summary:
There could be a reason why this gentleman is a Media Studies professor, not one of economics or logic:In the late 18th century, Malthus warned that the poor would breed at a rate that would outpace the resources necessary to sustain a growing population, resulting in famine and misery. His predictions failed but were still deployed for decades to limit public amelioration of poverty.Well, no, Malthus showed that they had and up to the point he wrote he was right too. It was capitalism and the Industrial Revolution that changed that historic truth. But leave facts aside and consider the logic here:In the late 18th and early 19th centuries, Bentham promoted the idea that public moral decisions should be made to foster the greatest good for the greatest number, forging the calculus that has

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There could be a reason why this gentleman is a Media Studies professor, not one of economics or logic:

In the late 18th century, Malthus warned that the poor would breed at a rate that would outpace the resources necessary to sustain a growing population, resulting in famine and misery. His predictions failed but were still deployed for decades to limit public amelioration of poverty.

Well, no, Malthus showed that they had and up to the point he wrote he was right too. It was capitalism and the Industrial Revolution that changed that historic truth. But leave facts aside and consider the logic here:

In the late 18th and early 19th centuries, Bentham promoted the idea that public moral decisions should be made to foster the greatest good for the greatest number, forging the calculus that has pushed policymakers and economists to invoke simplified “cost-benefit analyses” to decide if a measure is worthy of consideration.

Overall, this approach is a stark example of a troubling ideology that grips too many of those with power and influence in the world. Economism is a belief system that leads people to believe that everything can be simplified to models and curves, and that it’s possible to count and maximize utility in every circumstance. What economism misses includes complexity, historical contingency and the profound, uncountable power of human emotion.

To set up a false choice between driving the economy into the ground while saving millions of lives or reviving the economy while sacrificing millions of lives ignores a core fact: the global economic depression unleashed by the deaths of millions in the United States, millions in Europe, millions in Asia, millions in India, millions in Mexico and millions in Brazil would be beyond our experience or imagination.

No one would trade with anyone for years. Trade would grind to a halt because of mourning, fear of infection, society-wide trauma and social unrest.

Those last three sentences detail the costs of allowing the pandemic to rip through the population. We don’t agree with that analysis of what would happen for Spanish ‘Flu did exactly that, killing those numbers and more, and the 1920s were a great flowering of trade and economic growth. No, we would not justify Spanish ‘Flu on those grounds.

But look again at the logic there. We must not use cost benefit analysis, economism, to inform our decision making. For here is a cost that is very large, which outweighs the benefits of the decision being taken.

That is, we’ve just performed a cost benefit analysis to claim that we must not perform cost benefit analyses.

To retreat to economism once again, Adam Smith’s division and specialisation of labour. We might be better served if journalism on particular subjects were done by those who understood particular subjects rather than by those who understand journalism.

Only a thought.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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