True costs without numbers

A constant problem when you’re a conservative-minded environmentalist is being embarrassed by some of the people you find yourself on a side with. Today it’s Sarah Rich of WorldChanging and the people behind the newish “True Cost Clearinghouse,” a site aimed at collecting “an extensive archive of articles, studies and reports about the hidden ecological and social costs behind pricetags and standard cost-benefit analyses.”

It’s an excellent idea with a cockamamie explanation. They hope to:

Correct some of the huge distortions of current cost-benefit analyses. These new studies give weight and reality to the costs and benefits that fall to the public and to the commons, as opposed to industry and developers. They put numbers where there have been none before, or where they have been ignored. We don’t want to get trapped in trying to prove everything by the numbers and assigning a price to things that are beyond monetary value, like health and life. But avoiding economic analysis can lead to the assumption that all economic arguments favor industry and economic enterprise as we know it. And they do not.

Get the attention of those who listen to economic arguments. That includes not only policymakers but also large segments of the public who are resistant to changes to the status quo. Studies that put numbers to the cost of harm and the benefits of precaution can give policymakers a rationale for rejecting arguments that privilege “the economy” over health and wholeness. They can help communities get a handle on the real choices they face in economic development.

Begin to break the stranglehold of money as the sole measure of what we value as a society and how we make our decisions. The precautionary principle directs us to go ahead and take necessary protective action based on the best available information, not to wait for science’s standards of proof. That doesn’t mean ignoring science; it means incorporating science into our decisions but not backing off and letting science decide. Nor does it mean ignoring economics; it means incorporating what we value into our decisions, and monetary value is only a part of this. We cannot let monetary values alone make the decisions.

There’s good and useful stuff in the archive already, research papers and news stories reporting on efforts to put firm numbers on the financial costs that policymakers and captains of industry have gotten to share out to the rest of us without our permission. This stuff is very important.

But I put it to you that you can’t make convincing economic arguments while declaring openly that economic arguments are bull and not apparently understanding what economic thought is even really for.

Economics are, to be clear, not just about money, as the True Cost Clearinghouse people imply they are. When I buy a sandwich, money changes hands — but so does a sandwich. After I eat my new possession, I’m slightly poorer, but I’m no longer hungry, and that’s worth more to me than the money I handed over. The lady selling the sandwich has the money, but I figure we’ve both come out ahead. If I didn’t think that, I wouldn’t have bought the sandwich. I’ve made an economic decision to forgo money for something I value more. People do this all the time.

It is, however, difficult and often inappropriate for governments to decide that their people would rather have sandwiches than money. Difficult because you can’t survey everyone on every policy decision. Inappropriate because after all, if people had money, those who wanted to could buy sandwiches for themselves, leaving those who had a late breakfast to either keep the money for later or buy something else. Who am I to say you need a sandwich more right now? Where there are no sandwiches or suitable substitutes, we have a problem, but not the one the True Cost Clearinghouse is talking about.

I suppose it shouldn’t be a surprise that the archive seems to privilege stories I’d generally characterize as anti-The-Man. There’s one on the costs associated with an ADHD diagnosis, for instance (the page is built with a Javascript hierarchical menu widget, so I can’t link to the section directly). It does seem that ADHD is overdiagnosed, particularly in young boys, but whether it is or not has nothing to do with what an ADHD diagnosis costs. The costs of being diagnosed with cystic fibrosis are very high, too, but that tells us nothing useful for policy purposes. Similarly, they archive some famous work showing that ethanol costs more to make than it gives up when you burn it, but that’s very, very far from a settled fact. Indeed, there’s a lot of research showing the opposite. Not archived.

I’m also troubled by the True Cost Clearinghouse’s explicit rejection of “science’s standards of proof” as a key instrument in making policy decisions. I don’t understand what governments are supposed to use instead, if it’s neither science nor economics, even broadly understood. Hunches about what will best promote “wholeness”? Doesn’t work.

Cost-benefit analysis that ignore some of the costs or some of the benefits of a particular course of action are useless. Systems that let people get away with hurting other people for free need fixing. But arguing that our world would be better if we ignore economic and scientific thought that doesn’t match up with our personal gut feelings is nonsensical.


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