We've had a tiny bit of success, in Johannesburg, trying to use broader (including social) aspects of cost-benefit analysis simply to raise consciousness about the importance of internalizing externalities, by for instance keeping municipal water supply within the public sector because it is only as a public good that a water distribution and pricing system can be devised that reduces public health expenses (associated with not having water) or that equalizes gender imbalances. It is only, in short, through extensive cross-subsidization and other non-/anti-economic methods, i.e., the opposite of the marginal-cost pricing implicit in the incentive structure set up by private suppliers. We can't acurately measure those negative externalities or how much a lifeline dose of water will counteract them, of course, but in the process we occasionally have the effect of putting a slight break on privatization, as their team goes and reworks their sums... and we strengthen the deeper argument for the decommodification of such goods and services. Simple stuff compared to College Park seminars, but enough to publicly battle and sometimes even baffle the World Bank mission in Pretoria, a crew of rabid privatizers.
> From: sawicky at epinet.org (Max Sawicky)
...
> In our instruction, the economy was understood
> as potentially rife with externalities, and
> efficiency was understood as socially derived.
> In addition, it was understood that broader
> criteria for social welfare could appropriately
> modify 'socially efficient' outcomes achieved
> by government intervention in markets. There
> was little talk of "government failure."
>
> >From a social standpoint, in this sense, indeed
> more is always better than less. More means
> the benefits (or lack of harm) to all parties
> affected by production or consumption.
>
...
> I take the point that if we pretend to measure
> things that can't be measured, we introduce
> misinformation to a decision. But in such
> cases, we are still obliged to make a judgement.
> The alternative to a judgement that is informed
> of the inadequacies of measurement technique seems
> to be closing ones eyes and throwing darts. This
> reality seems to be glossed over by references to
> humane considerations or democratic participation.
> But these just evade the economic problem, far as
> I can see, even if economists do not ultimately
> decide the outcomes in the political world.
>
> MBS