Strategies in relation to complexities: From neoclassical Cost-Benefit Analysis to Positional Analysis
Please cite the paper as:
Peter Söderbaum, (2017), Strategies in relation to complexities: From neoclassical Cost-Benefit Analysis to Positional Analysis, World Economics Association (WEA) Conferences, No. 2 2017, Economic Philosophy: Complexities in Economics, 2nd October to 30th November 2017
In this essay neoclassical Cost-Benefit Analysis (CBA) is criticized as beinng too simplistic and also too specific in ideological terms. Positional Analysis (PA) is advocated as an alternative based on a definition of economics in terms of multidimensional analysis and democracy. Non-monetary impacts are regarded as being as ’economic’ as monetary ones and decision-making is seen as a multiple stage proces where issues of inertia, path dependence and irreversibility can be considered. While PA is still based on some simplifications, it is argued that the approach is closer to the complexities of the real world.
Sustainable Development is presented as a multidimensional issue where mainstream neoclassical theory has failed. A degree of pluralism in economics is needed to overcome some of the present unsustainable trends. As an example CBA-analysts cannot dictate correct values for assessments in a democratic society. In relation to decision-making, different and competing ideological orientations have to be considered.