Back To CourseUS History 2 Study Guide
29 chapters | 187 lessons
Chris has a master's degree in history and teaches at the University of Northern Colorado.
Let's do a little role-playing. We loosely refer to any decision that will impact the political, economic, or social lives of citizens as public policy, and today, you are a city-council member for your hometown, responsible for policymaking. The city council is currently debating a law that would make it legal to keep dolphins as pets. Sounds cool, but is it really a good idea? As a policymaker, it's your job to decide.
Public policymakers, like yourself, are often faced with tough decisions. In this case, you've got to decide if dolphin ownership is beneficial to the people. But where do you begin? One place that many policymakers start is with a benefit-cost analysis. This is an economics term in which benefits from a policy are balanced against the financial, social, and political costs of that action. It's like making a pro/con list, but with a specific focus. It should be noted that not everyone agrees on the usefulness of cost-benefit analyses in all situations, but for our problem it's a great place to start.
So, how do you begin to evaluate costs and benefits of something like a dolphin law? An obvious place to start is with the actual financial implications. Let's start with the costs. Buying a dolphin would be very expensive; you've got to install a massive tank, import crates of herrings for food, and pay for medical bills. However, those costs are something the pet-owner takes on voluntarily. Since we believe in individual liberties, we have to respect their right to assume that cost, and therefore we don't need to worry about it in our analysis.
However, could there be financial costs for people who don't voluntarily buy a dolphin? Well, if we legalize dolphin ownership, then the municipal government becomes responsible for enforcing pet ownership laws. This means that we have to inspect dolphin tanks, as well as create our own facilities for abandoned or abused dolphins. We have to pay city attorneys to persecute irresponsible pet owners. All of these costs will fall back upon taxpayers, so there could be a cost to individual citizens; even those who didn't choose to buy a pet dolphin.
Now, how about benefits? Legalizing a new pet would create opportunities for people to open businesses selling tanks and dolphin food or offering dolphin-training classes. There is a potential for financial benefit here to individuals and to the community, but the extent of that benefit depends on how many people actually end up buying dolphins.
Financial implications are a good place to start, but a benefit-cost analysis needs to be more than that. Every action does have its benefits, as well as a cost in terms of time, effort, or quality of living. In our situation, are there non-financial costs of making dolphins pets? Again, we want to focus on the costs to people who are not voluntarily taking on the assumed risks. For example, if a person buys a dolphin, they voluntarily live with an animal that spends most of its time splashing around. However, their neighbors did not sign up for that. Neighbors could experience water damage to their property.
It's also important to think about the big picture. If dolphin ownership becomes common, it could lead to a reduction of the wild dolphin population and throw ocean ecosystems out of balance.
But what about the benefits? Dolphins are cute, and having one for a pet could make people very happy. Pets help children become more responsible, and having highly intelligent pets could create deeper bonds between people and animals. If a great number of people petitioned for this law, then passing it would also show that the political process is working, respect the liberties of our citizens, and build trust in the government.
We've laid out our costs and benefits, so now it's time to compare them. If the benefits are greater, we can pass the law. If the costs are greater, we'll reject it. One of the best ways to look at this is to ask these two questions: Who benefits and who bears the cost?
If we make it legal to own dolphins as pets, who benefits? We've already established that it would be expensive to buy a dolphin, so really only the upper-middle and upper class citizens could own a dolphin. Local business owners could benefit if the demand for dolphin-related products is high enough. If the people really want this law to pass, then there is a chance that both the citizens and government benefit by building up a political relationship.
Now, who bears the cost? The costs of this law would almost certainly lead to higher taxes. Communities may have new issues to deal with thanks to the introduction of large aquatic pets, and future generations could see negative environmental impacts from the law. In this case, a few individuals may benefit, but a large number of people bear the cost for something they did not voluntarily assume risk. If the costs were limited only to dolphin owners, I'd say we pass this law, but since so many other people may be negatively impacted and see no direct benefit, the costs outweigh the benefits. Sorry folks, no pet dolphins today.
Policymakers are often responsible for decisions that impact the political, economic, and social lives of the citizens, which we loosely term public policies. These decisions can be tough to make, but many people find benefit-cost analyses to be very helpful. This is based on an economics idea that all actions have financial, political, and social impacts. Negative impacts, costs, can be compared to positive impacts, or benefits. An easy way to weigh costs against benefits is to ask the questions: who benefits and who bears the cost? Policymakers have a hard job to do, but benefit-cost analyses can help ensure that we don't do things to help a few and hurt the rest. Like making dolphins pets.
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Back To CourseUS History 2 Study Guide
29 chapters | 187 lessons