Sagoff, Mark. The Economy of the Earth
New York: ISBN 0521341132
Suppose a corporation proposes and an environmentalist group opposes the building of a shopping center in a rural area just outside of town. An economist might make a recommendation based on prices assigned to the various wants or preferences of relevant interest groups. This would effectively limit conflict to the immediate parties who know about and are affected by the project. The genius of democracy, however, is to let the conflict spread to a larger audience.
The institutions of democratic government—legislatures, agencies, parties, courts, and the press—depend and thrive on the potential for conflicts of this kind to widen beyond their original bounds. This happens when one side— usually the side that otherwise would be defeated—finds a public issue (e.g., a “snail darter”) and moves the conflict into the press, the legislature, and the courts. The decision-making process then may become a kind of public good, since it allows everyone who participates in it the feeling of relevance, importance, and community-consciousness flowing from that participation.
This might seem grossly inefficient, and perhaps it is, but it is what democratic government is all about. An alternative—technocracy quarantines or localizes conflict so that it can be resolved by the application of some mechanical rule or decision procedure. Cost-benefit approaches to public policy, if taken to their extreme, would do this, and thus they would substitute themselves for the processes of democratic government. The genius of cost-benefit analysis is to localize conflict among affected individuals and thereby to prevent it from breaking out into the public realm.