English: The French economist Jules Dupuit (1804-1866), credited with the creation of cost-benefit analysis. (Photo credit: Wikipedia)
We often hear of deciding an issue by considering the costs versus the benefits. In many cases, this offers a good basic system for deciding an issue. However, when it comes to making a decision about a person, the term starts to take on a different meaning and a different intent. In the UK Supreme Court judgment: R (MacDonald) v Kensington & Chelsea (2011), we see the brutal consequences of a cost benefit approach to justice and society. In this case, a local council made the cost benefit decision that an elderly woman would have to sleep in her faeces, as it was too costly to provide night-time assistance. They offered the less expensive option of incontinence pads. The justices supported the council’s decision except for Lady Hale. She argued that the logic used by the council, and the court, to reach this decision was flawed. A good analysis of the legal issues can be found on Carl Gardner’s Head of Legal post here. The Supreme Court ruling can be found at this link.
Is our life now reduced to a cost benefit calculus?
The case reveals the consequences of a cost benefit approach to politics and life. If our decisions, our very existence, are reduced to a cost-benefit analysis, what does it mean to be human? Are we to die or suffer because we “cost” too much? Who decides that someone “costs” too much relative to the “benefit” they provide? Whom are they providing the benefit to? Is it society, the person who applies the decision, or the person subject to the decision? These are not idle or speculative questions. They are literally life and death questions. They are also the question between human dignity and its alternative.
How do we distribute scarce resource without raising taxes?
Many people accept the cost-benefit model to distribute scarce resources. If we consider the trade-offs, we can decide between competing demands on the same budget. The implicit logic is that the decision is zero sum. If one gains, another has to lose, as the budget remains unchanged. The service budget may be affected, but the service budget exists within a larger organisational budget. What the decision did not explore is how the care budget is decided within the organisation’s budget. The implicit question is how the organisation has decided the budget for that service before the cost benefit decision had to be applied. What we find, though, is that organisations rarely apply a cost benefit analysis to themselves. They apply it to the service users. The organisation uses other criteria than cost-benefit. At the level of society, the cost benefit approach does not appear to be used as taxes that provide for the common good can be changed. They usually focus on the strong, those able to pay, and delivered so the weak and the vulnerable may live with the remaining shreds of dignity that their weakness and vulnerability deny them.
Does cost benefit analysis let us avoid political decisions?
The “cost benefit” approach to decisions is an analytical model to justify decisions.[1] As an analytical tool, it serves a purpose. The issue here is what its use tells us about the way society employs it. The cost benefit analysis is crude, but very subtle way, of demonstrating that selfishness is what we want. We do not want to pay more if the costs of such programmes outweigh the benefits. We believe that the resource envelope’s limits determine where and how the money should be spent. We do not want more taxes, where the strong help the weak; instead, we want to retain our taxes for our purposes. In that scenario, the weak and vulnerable are left to their devices. We do not want to make the envelope larger nor do we want to change its shape if it requires us to pay taxes. We defend the shape of the envelope by arguing that it reflects the best “cost-benefit” trade-off. Yet, we want to comfort ourselves in the notion that we pay our taxes and we already “do so much”. In that belief and that choice, we do not privilege the weak and the vulnerable. The powerful and the protected make the decisions, who will be a cost and who will be a benefit, which we accept it claims to deliver the greatest benefits at the lowest cost. The cost benefit analysis thus creates an artificial necessity, we have no more money and we do not want to pay any more taxes, that justify the decisions.
To raise taxes is to make a political decision.
We could raise taxes; we could choose to spend differently on different programmes. Those choices reflect the society we want. The programmes are the bureaucratic expression of our political wishes. They are not an economic or financial decision; it is a political decision. It is a political decision by the community to have the choice framed in this way. What is particularly troubling is how this is applied to the individual. The argument within the Supreme Court is that the community cannot privilege the individual at the expense of the community. We have to make choices and some individuals will be worse off. The goal is to make the number of people hurt by the change as small as possible. Yet, that argument raises a disturbing question about the limits of our rights as an individual.
Does an individual have any value if society decides they “cost” too much?
As Lady Hale explained, the issue is whether the individual has a right within the context to have her views considered. How does such a system take into account the individual in such a scenario? Contrary to what the Court argued, the question was not simply about an absolute entitlement. Instead, it is about the rationality of the decision by the council that is being challenged. Is their reliance on a cost benefit justification rational? What this suggests is a deeper problem within Western political systems.
Natural scarcity required justice for decent politics, what does artificial scarcity require?
The modern era, the rise of the modern nation state and modern natural science, is one where natural scarcity is no longer a threat. The state by providing a stable and prosperous society and a market can ensure that modern natural science will deliver the food to keep people from starving. By contrast, the ancient world was marked natural scarcity. Yet, we see that scarcity has returned. We have localized scarcity, where the organisation decides. Alternatively, we have macro scarcity where states make decisions based what they perceive as global scarcity. Without acknowledging it, we seem to be shaped by an ancient worldview. In that sense, cost benefit analysis shows illiberalism that reminds us of ancient world’s brutality.
Has justice been replaced by expediency? At what cost?
The applicant has been given justice. It has revealed an ugliness that haunts our society. We have reduced the human person to an economic cost. Is our claim to have a just society and one that respects the individual an empty one? Our justice appears to depend on an artificial necessity stricter than the natural necessity found in the ancient world.*** Perhaps what makes it stricter is that our politics, despite its claims to champion the individual and the rights of man, delivers an outcome, which relies more on what is expedient rather than just.
[1] For more on cost benefit analysis and welfare economics, see for example, http://www.sjsu.edu/faculty/watkins/cba.htm
And
http://en.wikipedia.org/wiki/Welfare_economics
These are useful tools within a certain context. However, they are now used in place of political judgement and as an artificial necessity to force a political choice. We have not more money so programme x must go. The reality is that more money can be found, raise taxes for example, charge for services, or reduce other programmes. Thus, a strict reliance on cost benefit analysis to make the political decision subsumes an economic logic for a political decision.
*** “Modern philosophical thought has all too often weakened the effectiveness of this sense, thereby permitting mere technological considerations and the economic and other so-called practical considerations closely allied to technology to dominate communal developments.”
https://anastaplo.wordpress.com/2011/05/11/heidegger-and-the-need-for-tyranny/
Philosophical Politics 