48:1 Rationality or Rationalism? The Positive and Normative Flaws of Cost-Benefit Analysis

Commentary

Abstract

Richard Revesz and Michael Livermore argue that environmental, health, and safety advocates’ traditional hostility to cost–benefit analysis is misplaced; instead, they say, proregulation advocates should embrace the interventionist potential of cost–benefit analysis. Their argument is both political (proregulation advocates should do cost–benefit analysis because it’s “here to stay”) and intellectual (cost–benefit analysis gives us the right answers).

On the intellectual level, I argue that cost–benefit analysis may well be incoherent, unimplementable, and morally unattractive. On the political level, cost–benefit analysis might fare better. But if Dean Revesz and Professor Livermore are right that, properly done, cost–benefit analysis might be proregulatory, their appeal to environmentalists has a corollary: perhaps it’s time for free-market advocates to reconsider their traditional support of cost–benefit analysis.