Though I generally avoid disclaimers, since Bryan Caplan calls my latest claim that econ efficiency is a good tool for finding win-win deals “complete nonsense,” let me try to clarify: We have many purposes when we talk about “what to do”, and making deals is only one of our purposes.
the whole point of a money economy is that accounting in money is trivial. accounting in social capital is impossible, and with a lack of transparency comes corruption, as we see in economies that run on such systems.
Might not be the sexiest post but I think its great.
i) Continuing my criticisms of efficiency analysis from the prior thread, "Efficiency isn't Moral," the problem with cost-benefit analysis is that its accuracy can never be tested. You can only test the accuracy of a cost-benefit analysis by doing another cost-benefit analysis, but all cost-benefit analyses are based on the assumption that prices reflect efficient tradeoffs, which means ipso facto that the previous decisions must have been right.
ii) Given the deep methodological problems with efficiency, what’s wrong with just using intuitive moral concepts, ones for which we’re wired, to help us make deals: fairness, reciprocity, honor, etc.
It would have been sufficient if you said: "When I said 'everyone,' I meant 'most everyone.'" I'm not jumping on you for lack of disclaimers, but for stubborn overstatement.