[Cost Benefit Analysis] leads to serial decision-making, precisely because it is a method based in the “marginal revolution” — that’s what’s good about it, but also what limits its methodological scope. That’s part of what makes it so “relentlessly tactical,” as I have quoted Philip Bobbitt (one of the grand strategists, one of the few who can strategically link military history and strategy, diplomacy, and law). As my colleague Jonathan Baker — now chief economist of the FCC — remarked to me (I don’t think he’ll mind me quoting him), cost benefit analysis is a method of analyzing and reacting to proposed courses of action, it is “not a method of generating them in the first place.” Not merely inadequate to the analytic task, which requires forms of thinking that go beyond serial “sunk costs” and marginality — but in some way allergic to the idea of strategic forms of thinking that encompass the ideas of line-drawing, initiating action, gambit, and envelopment.

Posted on January 1, 2010