Mazzonomics does seem to ignore opportunity costs

And, as the saying goes, if you’re going to ignore opportunity costs then whatever it is you’re doing it’s not economics:

The festivities are open to everyone, thanks to the community-led, non-commercial efforts of the Carnival Village Trust (CVT), a registered charity, with funding from the Greater London Authority, the Royal Borough of Kensington and Chelsea, and Westminster Council.

That funding of the Notting Hill Carnical is a cost. Obviously.

Like other cultural events and community initiatives, however, the Carnival has increasingly faced difficulties securing funding. This is part of a broader crisis. The arts and culture sector contributes more than £125 billion to the UK economy and employs more than 2.4 million people, yet it has faced severe funding cuts, and public spending is far below that of Britain’s European neighbors.

All of that funding is a cost, obviously. At which point we want to know what are the benefits? Sure, a great party, that’s a benefit. But among those things being counted:

Performing in the bands, building the floats, designing the costumes, cooking the food, and contributing in other ways generates roughly £100 million in economic value.

All of those are costs, not benefits. They are the effort that has to be put into having a damn good party. Those efforts could also be directed elsewhere - opportunity costs. It may well be that the party is worth those costs, that the other opportunities produce less value from those inputs. But we really must - because opportunity costs - insist upon counting inputs as costs, not benefits.

One million working hours are devoted to designing and hand-making the 15,000 costumes on display and rehearsing the performances of more than 80 bands.

One million working hours at minimum wage is what, £12 million? About? That’s a cost of the carnival, not a benefit of it. Those million hours - worth that £12 million - could be devoted to weeding the parks, caring for the old, finally building a ferry for Scotland or lauding La Mazza. Any of which might have greater value - opportunity costs - than the grand party. They’re a cost, not a benefit.

The festival creates a hive of productivity that

Labour spent upon something unpriced, by definition, reduces labour productivity.

The Notting Hill Carnival is a perfect example of why we need a new narrative for policymaking and economic development. The arts should be seen as a core governmental responsibility, with the long-term finance it requires viewed as an investment, not a cost.

As ever we tend to think that before designing a new economics we should understand the old. Inputs into a process - labour, say - are a cost of that process, not a benefit.

Actually, that’s not even economics, is it? That’s just basic accounting.

Tim Worstall