The basic premise behind what cost-benefit analysis, also known as CBA, represents is based on a rejection of ethical evaluations that have been based upon the assumptions of abstract moral principles. In this sense, CBA presents a differentiation from those ethical intentions that are underlined by principles based in logical argumentation, rather than experience based in the real world. Furthermore, these notions present an assumption that there can, indeed, be a morally guided justification that is based in relevant interpretations of those events that have been presented as such.
What sets cost benefit analysis apart from other forms of ethical frameworks is, in part, its presentation of ethics based on a model that takes into account applied investments, and is driven by the basis of the decision making process. This framework presents ethical inquiries on the basis of observations and predictions based on information that has been attained from the real world. In this way, the objectives of CBA are motivated by the necessity to present an ethical theory that is based in the realities of necessity.
For this reason, the tents of cost benefit analysis are not only based in notions of feasibility, but also viability. In terms of feasibility, the circumstances that are presented in decisions made through CBA must have an outcome that is possible to achieve. In other words, it is not based in abstract notions of justification such as virtues or ideals. Rather, a cost benefit analysis will be presented through notions that are viable to the natural world, which can be measured or understood in a real way.
Cost benefit analysis, in essence, attempts to create an established way to make a decision. In other words, it provides a basic structure to compare two choices. This is with the purpose of creating a more informed decision that can allow a more efficient system of judgment concerning wide-ranging circumstances. These circumstances are thus carefully considered, and essentially weighed to come to a conclusion concerning whether the effectiveness of each decision is worth the individual risk.
Therefore, the idea of cost benefit analysis is basically a consideration of which option in any dilemma will have the most desired outcome. The idea behind this is that the cost must be worth the desired benefit that the outcome results in. In this way, it is separated fundamentally from other forms of ethical inquiry. Rather than being fundamentally concerned with what is considered to be right or wrong, it is concerned with what the outcomes of certain actions will be.
These systems of ethical inquiry are often utilized in order to logically solve complicated options in regards to ethical opinion. Governments, as well as businesses, use the system in order to analyze the potential outcomes of certain policies or procedures. Therefore, the representations of these ideas are primarily concerned with attaining an outcome that is as best as it could possibly be, rather than being concerned with what should be considered perfect, or absolute in all cases.
For this reason, issues concerning a broad range of circumstances that are difficult to be considered in any case prefer the ability of cost benefit presentations in order to come to a more informed and accurate conclusion on the subject that is being addressed. In this sense, there are various ways that the system itself can be utilized. The fundamental characteristic of a cost benefit analysis is that it allows the group or organization to approach the issue with a systematic way to find a resolution that can then be reworked, compounded upon, and adjusted to create the most effective solution for future problems that might arise.
Within the context of business, cost benefit analysis is a fundamental notion. Within the context of philosophy, in particular ethics, the ideas of cost benefit analysis is considered consequentialism. This is an idea that is at odds with various others, in light of its involvement with considering notions of right or wrong in the realms of politics or law. For this reason, there are various philosophic ideas that give rise to the idea that this is a more complicated subject than otherwise considered.
Rather than appealing to a sense of morality or virtue, which can be considered abstract, these theories attempt to relate ethical inquiries to the real world and material things that can be measured. This creates a notion that there can, indeed, be an objective moral decision made concerning various issues. These issues must, in this way, be informed by these real world circumstances, which can be measured and understood.
In this way, the merits of cost-benefit analysis are informed by experience rather than by logical inquiry. These inquiries are fundamentally related to the social issues that are being considered. This presents a moral context that can then be utilized in order to present notions of judgment concerning real world issues.
These systematic interpretations are often performed by both businesses and governmental agencies. “In a typical cost-benefit analysis, the social questions are framed in terms of a “social decision” — whether to institute a regulation, how much pollution to allow, whether to lease certain offshore oil tracts — understood in strict analogy with an individual decision.” (Langois 1982) This presents an experiential consideration that can be used in order to make a decision.
This has given rise to notions that have led to some of the criticisms of CBA from an ethical as well as an environmental perspective. Not only has the basis of Cost benefit analysis been considered in relation to its inability to consider ideas that are considered fundamental to humanity, but also due to its inability to present these ideas in a way that can be considered informed by any basic humanitarian notions.
In other words, cost-benefit analysis has the criticism of attempting to place value on things that should be considered beyond that. This includes both animal and human life. In this way, those have implemented these polices have done so in a way that treats life as though it is a material commodity. This has led to a great deal of criticism towards those who favor the tenets of cost benefit analysis. This criticism is based on the grounds that there are fundamental values that are inherent to all of humanity, and that cannot be quantified and understood in a simple cost-benefit rationale.
Another fundamental argument that has been formulated towards cost-benefit analysis is that it is not necessarily fair towards those who have been wronged in the distribution of its justice. This system functions under the idea that a wrong committed towards one individual can be made right by providing compensation to another. In this way, it becomes difficult to present the idea in a way that allows for basic human issues to be considered through the lens of its systematic perception.
Many have argued that it is a system that should be reserved for business interests, and not put forth in the realm of social ethics. In this sense, it can be seen as an economic rather than an ethical framework for decision making. For this reason, there have been criticisms of the ideas that are presented under CBA, which have an impersonal way of dealing with the ethical issues of society. This inability for the cost benefit analysis to take into account the needs of individuals, rather than the needs of many in contention with one another, has been one of its strongest issues.
Therefore, the interests of business related matters are well informed by these ideas, while those for social matters should be informed by only those that are based in virtue, or inherently focused ideals. While it is useful for decision making regarding investments, there are questions concerning its applications towards real world ethics. This presents an argument regarding the application of these ideas on the stage of world politics or social implementations of them.
Finally, the basis of the values placed on commodities within the framework of CBA is difficult to establish. In other words, any value placed on something such as life, or personhood, within this framework would be, in fact arbitrary. “Since the price one puts on the value of a thing is presumably guided by the value one takes it to have, it becomes a crucial question how it is to be decided which value or values are appropriate in the case of natural goods.” (Holland 2009) This presents one of the strongest criticisms of the basic tenets of cost benefit analysis.
It is difficult to determine how detrimental these ideas are to the basic tenets of cost benefit analysis. However, whether these criticisms are actually fatal for CBA is doubtful. While there are many fundamental issues that present challenges to these arguments, the basic understanding of the system should be considered based on the implementer’s intent. While there are many considerations that can possibly be utilized towards the unintended consequences, there are circumstances in which the system is actually implemented. “Many accept the moral justification of allowing certain sorts of social decisions to be decided by a majority vote.” (Huban 1994) In other words, there are essential issues that CBA can resolve, although it should not attempt to resolve those it was not intended to.
References
Holland, Alan. The Assumptions of Cost-Benefit Analysis - A Philosopher's View. Four Essays
on Ecological Economics. BANC. 2009.
Huban, Donald C. The Moral Justification of Benefit/Cost Analysis. Economics and Philosophy.
The Ohio State University. 1994.
Langlois, Richard N. Cost-Benefit Analysis, Environmentalism, and Rights. CATO Journal.
1982.
