This paper analyzes cost-benefit analysis from legal, economic, and philoso
phical perspectives. The traditional defense of cost-benefit analysis is th
at it maximizes a social welfare function that aggregates unweighted and un
restricted preferences. Professors Adler and Posner follow many economists
and philosophers who conclude that this defense is not persuasive. The view
that the government should maximize the satisfaction of unrestricted prefe
rences is not plausible. However, the authors disagree with critics who arg
ue that cost-benefit analysis produces morally irrelevant evaluations of pr
ojects and should be abandoned. On the contrary, cost-benefit analysis, sui
tably constrained is consistent with a broad array of appealing normative c
ommitments, and it is superior to alternative methods of project evaluation
. It is a reasonable means to the end of maximizing overall welfare when pr
eferences are undistorted or can be reconstructed. And it both exploits the
benefits of agency specialization and constrains agencies that might other
wise evaluate projects improperly.