It is a principle I set down with some care in the Wealth of Nations that public works ought to be erected and maintained only when the benefit to society exceeds what any private undertaking could supply, and when the revenues arising therefrom are sufficient, or nearly so, to defray their expense. The third runway proposed at Heathrow aerodrome has been commended to the nation on precisely this reasoning for the better part of two decades, and it is therefore a matter of no small consequence that the Department for Transport has now produced analysis suggesting the economic benefit previously advertised may exceed the actual benefit by a proportion of nine to one.
Let us sit with that fraction a moment, as a merchant might sit with an invoice that does not reconcile. The argument advanced in favour of this great work of public improvement was, in material part, an argument from national wealth: that the expansion of the capacity to receive and dispatch flying-machines would enlarge trade, stimulate commerce, and produce for the sovereign and the labouring population alike a prosperity sufficient to justify the considerable outlay. That argument, on the Department's own revised reckoning, was constructed upon figures which now appear to have been overstated by something approaching ninety parts in every hundred.
The net cost of the undertaking, when all factors are brought to account — including those externalities which my Theory of Moral Sentiments would counsel us never to set aside merely because they resist easy valuation — is placed by the same analysis at as much as sixty-two thousand and five hundred millions of pounds sterling. This is not a sum that recommends itself to quiet acceptance. It is a sum that, distributed among the labouring families of these islands, would constitute a very material addition to their circumstances. Set against the revised benefit, it represents an exchange of a character that would give pause to even the most enthusiastic projector.
The projectors — and I use the word in its proper sense, meaning those who devise and promote schemes of great apparent promise — have long argued that national prosperity requires this additional strip of ground and macadamised surface. The nation's legislators were, it seems, furnished with estimates of that prosperity which the Department's own officers now regard as considerably too generous. The mechanism by which such figures are produced, revised, and then quietly replaced by smaller figures is one that students of political economy will recognize as a pattern not confined to the aerodrome.
It is worth observing, without further embellishment, that sixty-two thousand and five hundred millions of pounds is sixty-two thousand and five hundred millions of pounds. A properly constituted system of public accounting, which I advocated and which remains as necessary as ever, would have required that this figure, and the uncertainty surrounding the benefit figure, be placed before the sovereign and the public before the decision was taken rather than some considerable interval after. That it appears now, when foundations may already be drawn, is a feature of public finance that no revision of the arithmetic will correct.