Comments on economics, mystery fiction, drama, and art.

Monday, December 06, 2004

Posner and Becker

Richard Posner and Gary Becker have begun a joint blog and the first two posts deal with the concept of preventive war. Posner's post, in particular, is a prime example of the misuse of economic arguments. He writes: "A rational decision to go to war should be based on a comparison of the costs and benefits (in the largest sense of these terms) to the nation." Well, yeah. But so what? As Publius at Legal Fiction points out, this amounts to saying, "Wage preventive war when it's a good thing. Don't wage preventive war when it's a bad thing."

To make a benefit-cost analysis of preventive war work, it's necessary to assume that one can (a) identify all the things that constitute costs and benefits and (b) place values on them that render them capable of being compared (money values can do as a measuring rod).

Psoner goes on to write: "The benefits are the costs that the enemy’s attack, the attack that going to war now will thwart, will impose on the nation." This may not be immediately clear. The proposed benefits of preventive war, to Posner, are that damage that we prevent. He goes on to say that he is concerned with "future costs that are largely nonpecuniary" and that if "the threat of attack lies in the future it is difficult to gauge either its actual likelihood or its probable magnitude."

But on Posner's own terms we are now prevented from doing benefit-cost analysis. The benefits of preventive war have an unknown probability of coming to pass and cannot be measured in a way that meets the test of inter-subjectivity. So it does not matter what we say or do, we cannot compare the benefits and costs in any way that approaches objectivity.

So if I think the war is a good idea, and you think it is a bad idea, benefit-cost analysis is incabable of converting either of us. The idea of benefit-cost analysis, applied in this realm, is intrinsically unconvincing.


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