I could not agree more with Schmidtz’s view that cost-benefit analysis (CBA) is necessary but not sufficient to determine morally permissible policies and decisions. As a “framework,” CBA would serve as a starting point for an open dialogue as to deciding what policies to enact. If a policy should fail the CBA, in that its costs would outweigh its benefits, it should be sent back to its makers for revisions or be discarded in its entirety. But, should a policy pass the CBA, it should necessarily not be automatically assumed that the policy is reasonable and should be enacted. Instead, we should conclude “that the policy has passed one crucial test and therefore further discussion is warranted.” Using CBA for the sheer sake of having full information of all benefits and costs a specific policy may cause is logical and necessary, in my opinion. It does well to guide our discussion, but CBA should not be used to decide policy alone.

Unfortunately, it is past this point at which I became stuck. In describing the limitations of CBA, Schmidtz emphasizes the importance in respecting people’s rights, certainly an important and admirable action. However, to illustrate his argument, he introduces Peeveyhouse v. Garland Coal (1962). He notes that Garland Coal refused to perform its contractual obligations in their entirety by not restoring the Peeveyhouse property back to its original condition after completing a strip-mining operation on it. Restoring the land would cost Garland Coal $29,000, while the restored land’s value would have be worth only $300. Referring to the Supreme Court of Oklahoma’s decision to award Peeveyhouse $300 in damages as “generally…regarded as utterly mistaken,” Schmidtz explains that the court reached its decision because the restoration would not be cost-effective. Though quite biased, nothing Schmidtz stated was false. Still, I feel need to offer defense to the court’s decision. To do so, I used the case law - http://academic.udayton.edu/CasesLawEcon/Contracts/Peevyhouse%201962.pdf.

One aspect ignored by Schmidtz was the actual contract itself. In exchange for royalties on the extracted coal, Peeveyhouse allowed Garland to strip-mine a section of their land for five years. A provision of this contract was that Garland was expected to return the land to its original condition. Although the major terms of the contract were upheld by both parties, Garland did breach the contract by not performing the provision. However, there was substantial performance of the contract. Although it can be argued that $300 in expectancy damages (the value of the land had Garland restored it) was not sufficient, it is also not unreasonable to argue that $300 is an equitable remedy. For instance, the economic waste doctrine holds that “if granting repair costs to the owner would result in ‘unreasonable economic waste,’ then the proper measure of the owner's damages should be the difference between the value of the project as promised in the contract and its value as delivered” (https://litigation-essentials.lexisnexis.com/webcd/app?action=DocumentDisplay&crawlid=1&doctype=cite&docid=43+DePaul+L.+Rev.+185&srctype=smi&srcid=3B15&key=5c38a755056f84a867ca8216380126c8). As a main rule of contract law, a party should not be awarded more damages than she would have anticipated had the contract she was a party to had it not been breached. In an ideal world, Garland would owe Peeveyhouse specific performance, or at least enough compensation for Peeveyhouse to find an outside party to hire to fix his land. In such an ideal world, the court would consider the subjective value of the land to Peeveyhouse, and not just its monetary value. But, such a thing as expectancy damages is necessary in the realm of contracts.

As discussed in my business law class, consider my making a contract with a builder to build my dream home. I stipulate a specific placement of the windows in my house. Upon completion of my home, I see that my windows are placed in wrong positions by a matter of inches. The builder did in fact breach our contract, and I want him to correct his mistake, which would indeed involve a great sum of money and seems on the whole, an unreasonable remedy for the builder’s innocent mistake. Protecting the builder from such a commercial impracticality, the court would consider any loss of value to my home due to the different placement of the windows. Although the placement has important subjective value to me, it would not change the monetary amount my home is worth. As such, no action would be taken against the builder.

This tangent was probably not worthwhile, in that I still find myself agreeing with Schmidtz’s core points. Maybe it could illustrate the complexity behind decisions and policies in that cost-effectiveness must at least be a consideration in addition to morality. But overall, I just found myself irked at Schmidtz’s quick dismissal and simplification of the Oklahoma court’s conclusion.