The basic social cost–benefit analysis model builds on standard commercial,
financial cost–benefit analysis. Financial cost–benefit analysis is what a
commercial enterprise would use to appraise or evaluate an investment activity.
The model for financial cost–benefit analysis assumes that the enterprise accepts
market prices (including interest on borrowing), pays the taxes it cannot avoid
(or evade) and welcomes any subsidies. The model also assumes that if the
enterprise can displace or externalize costs onto other economic agents
(producers, consumers, government, neighbours, the human species), it will. The
end result is simply financial profitability for the enterprise as a single
institution. Neoclassical economists would claim that this is necessary and
sufficient for appraising activities, and that free markets will deliver the best of
all possible economic worlds as part of a wider neoliberal developmental agenda
(Lipton, 1987).