Here’s a old passage from the Guardian newspaper in the UK (it’s quite a good article from George Monbiot, another one of those folks with whom you might expect me to butt heads with regularly:
The cost-benefit analysis (which the government calls “the business case”) produces benefits of £32.3bn. The department concludes that the scheme has a benefit-cost ratio of 2.7. But where did the £32.3bn come from?
Almost all of it is money deemed to have been saved by reducing travel times. Business customers, it says, will save £17.6bn by getting there faster; leisure customers £11.1bn. Nowhere in the documents are these figures explained or justified.
Right – so a benefit of high-speed rail is that is saves consumers (especially greedy business-people and bankers) time. I totally get that. What I find unusual (not from Monbiot) is that I often see elaborate defenses of recycling initiatives (almost wholly devoid of good cost-benefit analyses) that make no mention whatsoever of the time costs of people sorting their trash, or workers sorting it. In fact, the implicit time costs to execute a recycling program are often touted as a benefit.
Recycling programs benefit the local economy by creating jobs and supporting the tax base. A report by the Institute for Local Self Reliance (ILSR) found that 15,000 tons of solid waste creates an average of one job if landfilled, two jobs if incinerated, seven jobs if composted, and nine jobs if processed for recycling.
Not only does this passage ignore the fact that jobs themselves are a cost of getting the things we want, it also commits the “apple-core to orange-peel” comparison that the article complains about earlier. Extra credit to any “student” who can correctly identify what the major flaw is.
That article is a good example of using a few thousand words where a couple hundred would do just fine. His clever apple cores and orange peels metaphor required this impatient reader to read through several paragraphs before I realized it was an inside joke among the professional garbage disposal community. Maybe the fumes had finally got to him, thinking nine times the cost is beneficial. Where does he think the money is going to come from — the US Mint?