Cost Benefit Analysis : The Cost Of Tragedy Essay

Cost Benefit Analysis : The Cost Of Tragedy Essay

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Cost-benefit analysis is an economic approach decision making that compares the strengths and weaknesses of each choice in order to determine which option will provide the most amount of benefits and the least amount of costs. This method is often applied to decisions that concern the environment as an attempt to determine the value of the environment before following through with decisions to preserve or utilize the environment for resources. Although many economists believe that cost-benefit analysis is an efficient way to make most decisions, some philosophers suggest that certain things, including the environment, have innumerable values, therefore, cost-benefit analysis may not be a reliable method to make decisions regarding these things. In “The Cost of Tragedy,” Martha Nussbaum differentiates between what she calls an “obvious question” and a “tragic question,” and argues that all decision makers must ask the “tragic question” in order to determine if any or all options violate some moral principle. Depending on whether the answer to this question is “yes” or “no” will determine how much one should rely on cost-benefit analysis to determine the best option and prevent tragedies from reoccurring the future. Another perspective of the reliability cost-benefit analysis is presented in Andrew Brennan’s “Ethics, ecology and economics,” where he argues that cost-benefit analysis and economism in general cannot determine the true value of the environment, and thus cannot provide adequate environmental philosophy. Along with this, in “A Place for Cost-Benefit Analysis,” David Schmidtz argues that although it is not perfect, if cost-benefit analysis is applied with consideration to externalities beyond just the economic costs of de...

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...arantee that we have considered everything. In the real world, we must acknowledge that for any actual calculation we perform, there could be some cost or benefit or risk we have overlooked” (162). Schmidtz acknowledges that human decision makers cannot possibility account for every single external cost, but he does claim that this limit can be accounted for if the decision is opened to the public for scrutiny. For Schmidtz, public deliberation of a decision is a practical way for a decision maker to account for the most externalities to avoid moral violation of many people (163). Although cost-benefit analysis is not a perfect formula that can always determine morally perfect decisions, choices will always have to be made, and Schmidtz argues that cost-benefit analysis—when it accounts for external costs—is the most practical method to determine the best option.

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