Book 664: The Cost-Benefit Revolution – Cass R. Sunstein

What. A. Doozie. Seriously, why do I decide to read the densest books EVER at the holidays and the beginning of the year? Really, I should’ve read this last year when I requested it from the publisher after seeing an advertisement for it on the train, but I kept pushing it off until now.* I requested this because having read Nudge, I assumed all his works were super approachable, but that wasn’t the case for this incredibly dense book.

Honestly, this compares more to last year’s kick-off read, Crashed: How a Decade of Financial Crises Changed the World. I mean just reading that title makes me exhausted again (it was 700+ very dense pages). This year’s kick-off, though roughly 1/3 the size, was just as dense and basically tried to look at how to make government regulation more even and effective by removing politics and opinion and replacing it with cost-benefit analysis. It’s no wonder it took me roughly three weeks to actually get through this one.

I’m not even going to try and summarize the book because there were so many complex theories and examples that I’m sure I would mess them all up. Let’s go with the Wikipedia definition of cost-benefit analysis:

a systematic approach to estimating the strengths and weaknesses of alternatives used to determine options which provide the best approach to achieving benefits while preserving savings (for example, in transactions, activities, and functional business requirements).

What Sunstein did was show where it has been applied historically in the US government and where it could be much better used as well. I really appreciated the general apolitical writing and subject matter that he chose to profile. He discussed how both republican and democrat presidents and administrations have used it going back to George W. Bush and how they’ve all enhanced it in various ways and by using cost-benefit analysis some even approved legislation/regulation that was counter to their “party principles” because the benefits so far outweighed the costs.

I got a good chuckle out of his coining of Cheynism and Snowdenism to show the juxtaposition of thought on cost-benefit analysis no terrorism and surveillance in America. I can’t even begin to say I understood a lot of it, but his making it more approachable via those two individuals at least helped me understand the gist of it. I also appreciated how open Sunstein was about the limitations of cost-benefit analysis when it comes to the influence of morals on cost-benefit analysis and how costs are/should be determined (i.e. the cost of a human life is valued at $9 million, but should that be the same for children or the elderly? should it be based on life expectancy?)

Recommendation: It’s hard to say. If you’re REALLY interested in government regulation or non-partisan ways to look at legislation/regulation then this is definitely a good book to read, but it’s very dense. If you’re just interested on a whim (like I was) I’d probably say pass. I actually found myself nodding off on occasion while trying to read it because many of the examples were pretty dull or minute.

*I received a copy of The Cost-Benefit Revolution from the publisher in return for my honest opinion. No goods or money were exchanged.

Opening Line: “People often have clear intuitions about social problems.”

Closing Line: “There will be dancing at the revolution, and I’m coming.” (Not whited out as this is a work of nonfiction.)

Additional Quotes from The Cost-Benefit Revolution
“Willingness to pay is based on a prediction and at least some of the time, people make mistakes in forecasting how various outcomes will make them feel. You might think that if you don’t get a particular job or your favorite sport team loses a crucial game or even someone you really like refuses to date you, you’ll be miserable for a good long time. Chances are that you’re wrong—and that you’ll recover far more quickly than you think.” (77)

“If we exclude moral commitments, we make cost-benefit analysis a lot easier. It is true that we will end up excluding values that ought to count (because they matter to welfare). But if we include moral commitments, we might end up including some values that should not count (for welfarist or other reasons; consider the examples listed above). In the end, the best approach might be a simple rule: do not include moral commitments in cost-benefit analysis.” (115)

“In 2017, the Environmental Protection Agency under President Donald Trump proposed to depart from the previous decision to use the “global” figure for the social cost of carbon (approximately $40, consisting of the damage done to the world from a ton of carbon emissions in the United States) in favor of the domestic figure (between $1 and $6, representing damage done only in the United States). That decision may or may not be justifiable. But it was not justified. No explanation was given. That is the height of arbitrariness, and it should be invalidated in court.” (164)

“The most general point is that the Precautionary Principle seems appealing and workable because and when people use narrow viewscreens, focusing on a subset of the risks at state rather than the whole.” (179)