Is Cost-Benefit Analysis the Only Game in Town?

69 Pages Posted: 7 Dec 2016 Last revised: 3 Nov 2018

See all articles by Gregory C. Keating

Gregory C. Keating

University of Southern California Gould School of Law

Date Written: November 2, 2018


Standards which prescribe more than efficient precaution against physical harm and health injury are commonplace in American environmental, health and safety regulation. The safe level standard, for example, requires the elimination of all significant risks. The feasibility standard requires the elimination of significant risks to the extent insofar as it is possible to do so without impairing the long run survival of the activities which give rise to the risks. These standards reach back more than a generation to the founding of the EPA and OSHA. You might think that they are too well-entrenched in American law to be subject to serious dispute. Yet these standards are now routinely decried as irrational or incoherent. Cost-benefit analysis, we are told, is the only game in town for determining appropriate standards of conduct for socially useful but risky acts. In a nutshell, the conventional wisdom is that cost-benefit analysis is rationality incarnate and the cost-justified level of precaution is the rational level of precaution. No matter how highly we value safety, the benefits of achieving a particular level of safety must be traded off against the costs of doing so. The rational way to trade costs off against benefits is to balance them so that we maximize net value and thereby make ourselves as well off as we can be. Taking more than efficient precaution yields less — not more — value. Preferring less value to more value is flatly irrational.

This paper argues that the charge of irrationality is mistaken. The feasibility and safety norms are directed against very serious harms — the kind of health injuries that deal out death and disability. Costs and benefits may be symmetrically important but harms and benefits are not. By virtue of its intimate connection to autonomy, the avoidance of harm has a special priority. There is nothing special about harm from an efficiency perspective; harms are simply costs and all costs are comparable at some ratio of exchange. Harm’s moral significance is connected to our separateness and independence as persons, and with our interest in securing the conditions necessary for us to be the authors of our own lives. Serious physical harms impair the pursuit of a wide range of human ends and aspirations, and deny normal human lives to those whose powers are impaired. Very few benefits, by contrast, are comparably essential conditions of effective agency. Benefit, like happiness, is mostly for each of us to pursue as best we can. In the domains to which they apply, the safety and feasibility standards are plausible expressions of the priority of avoiding harm.

Suggested Citation

Keating, Gregory C., Is Cost-Benefit Analysis the Only Game in Town? (November 2, 2018). 91 Southern California Law Review 195 (2018), USC CLASS Research Paper No. CLASS16-33, USC Law Legal Studies Paper No. 16-37, Available at SSRN: or

Gregory C. Keating (Contact Author)

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