"Many difficult conceptual issues such as externalities, consumer surplus, opportunity costs, and secondary benefits that had troubled earlier practitioners were resolved and other unresolved issues, such as the discount rate, were at least clarified." -- Maynard M. Hufschmidt, "Benefit-Cost Analysis 1933-1985"And they all lived happily ever after... (in the Cost-Benefit fairy tale, that is).
What are secondary benefits? What are opportunity costs? How did the difficult issues get resolved? And who cares?
What if I told you -- just for argument's sake, mind you -- that "secondary benefits" was a cipher for "wages of labor" and that "opportunity costs" was code for "return on investment"? What if I pointed out that the "difficult issues" were "resolved" by declaring that wages were of little concern to public policy making but that profits were paramount? Would you care about secondary benefits, opportunity costs and how those difficult issues were resolved?
Economists generally don't. At least not until now anyway.
The Sandwichman has scheduled an EconoSpeak blog post for Wednesday, November 5, titled "Unemployment, Interest and the Social Cost of Carbon" that doesn't quite go as far as the "what if" scenarios above [pssst: sneak preview at Ecological Headstand]. It explores highlights of the untold story of CBA from the New Deal to today's climate change policy "Integrated Assessment Models."
But keep those "what if" scenarios in mind. Cost-Benefit Analysis is about class struggle, the rules for conducting that struggle and which class makes the rules.