“How can you talk economics when we’re talking about people’s lives!”

It never fails.  When I (or a lot of other people) talk about the economic cost of some policy we always get “how can you think of economics when we’re talking about people’s lives here” or “you can’t put a price on human life” or the big one “if it saves just one life, it’s worth it.”  “If we don’t do this, people will die!”

The problem is that economics translates into lives.  And while whatever folk want to “solve” with their economically unviable proposal might “cost lives” impoverishing people, either as individuals or as the economy as a whole also costs lives.

Consider, that an Earthquake of a severity that might kill a dozen people in California, would kill hundreds, or even thousands, in someplace like Bangladesh.  Wealthier societies are more likely to have buildings built of sufficient strength to withstand earthquakes and, thus avoid crushing their inhabitants.  Wealthier societies are more likely to have networks of roads that allow sick and injured to reach hospitals or aid stations quickly–and the more quickly you can treat, the better the chances for recovery.

Or, never mind Earthquakes.  In wealthier societies more people have shelter from weather that can threaten their health, and not just against storms, but heat is a known killer, as is cold.  Having a draft-free dwelling with adequate heating and cooling for the weather saves lives.  Sure, for a lot of people it’s about comfort but many of the very old and very young, or the sick and injured, are less able to deal with temperature extremes.  Heat waves and cold snaps are invariably accompanied by rising death rates (with cold being by far the worse killer of the two).  Adequate heat and air, and modern, high-tech clothing meant to protect the wearer from temperature extremes make a big difference.

Ordinary illnesses and injuries?  People have accidents, get sick.  Once again, that extensive network of roads–a feature of wealthier societies–allows people to get their sick and injured to doctors and hospitals quickly.  And not just via ambulance.  That might be arranged by some government program which allows people to…

Oh, I can’t do it.  The simple fact is that many times, a person can get a sick or injured loved one to the hospital faster than an ambulance can get to them.  At least they can if they have their own car, which is something that is not common except in wealthy nations.

Look, some economists have tried to study this, to try and figure how many dollars (or whatever monetary unit you care to use) of GDP equates to how many lives saved.  Because of the complexities of such analysis results vary.  After all, there are other things that affect death rates than just the wealth of society.  The basic principle, however, is so universal that it’s not even controversial–people live longer, and better, in wealthier societies.

gdp-life-expectancy
The source for this is a site that does data visualization, but the data is very much real.

The results of all this is that you cannot dismiss economic realities–the cost of doing whatever “good thing” you want to do via government comes at the expense of no longer being able to do something else with those resources.  After all, Economics is the study of cause and effect relationships in the allocation of scarce resources that have alternative uses.  Scarce, meaning you never have enough for everyone that wants it.  And so, use them for one thing and lose the ability to use them for something else.

In politics, people tend to make categorical decisions.  We must do this, regardless of the cost.  And doing “this” means we don’t do “that.” Political solutions tend to miss the incremental tradeoffs.  How much of “that” are we willing to give up for how much of “this”?

And when the “that” is something as nebulous to most people’s thinking as a Gross Domestic Product, particularly when a lot of that product is in other people’s hands rather than ones own, the very real effects of trading “that” get lost in the shuffle.

It’s very short-sighted and we need to work hard to not do that.

Unless, of course, you want people to die.

14 thoughts on ““How can you talk economics when we’re talking about people’s lives!””

  1. I suppose that socialists would say that they care about economics, ie., socialism, because they’re talking about human lives.

    “I don’t know how to make you care!”

    It’s not “caring” if it doesn’t work. It’s the opposite of “caring” if it doesn’t work.

    “Too many people figure, well, I’ve got mine.”

    I’d say too many people figure “I want yours.” But even so, removing people’s ability to “get mine” doesn’t make things better, it makes society impoverished. Someone who’s “got theirs” does an amazing thing… they buy stuff. If “theirs” is a sufficiently large number… they hire people.

    People complain that libertarians are selfish. I’d say this… a system that allows me to “get mine” also allows you to “get yours.” The only way to have a system that prohibits some people from the opportunity to “get theirs” is to put government in charge of who gets what.

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  2. From February of ’70 to near the end of December ’78 I was either in training to be a missile launch officer, or was on duty as a missile launch officer. Quite happy to have never had to launch missiles.

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  3. One thing about “what’s it going to cost” is it gives incentives to actively look for unintended consequences. This question has often been used to stop the malicious meddling of the Good Idea Fairy.

    Likewise, cost gives an incentive to discard things that just aren’t working out.

    If New Coke or Crystal Pepsi were government programs, both would still be in production (at a loss), with a subsidy to give it to schools and poor families (following an expensive and inconclusive study), and with another expensive program to try to help those same people overcome the effects of excess caffeine and sugar.

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    1. Yep. That’s why the market far outperforms the government in the vast majority of things. People talk about the market being “impersonal” yet it’s entirely personal. It is nothing more than the sum of each individual out there making their own personal choice. If a lot of people want something, they tend to bid the price up. If nobody wants something, it sits unsold and the seller is driven to drop the price in the hope of getting something for it. And if it costs more to produce than people are willing to pay, then the producer either needs to find cheaper ways to produce it or stop (willingly of forced through bankruptcy), freeing those resources for something people value more. It’s actually a remarkably efficient system.

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  4. It’s not just the network of roads (and vehicles to travel them) that makes survival of natural disaster, accident, or illness easier in the more developed countries. They also have more hospitals and clinics, and those hospitals and clinics are better equipped, better staffed, and have more supplies and resources on hand.

    Wealthier countries can also maintain their infrastructure better (though they don’t always *cough* Flint, MI, *cough*). With clean drinking water and proper waste disposal, people stay healthier.

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    1. Absolutely. The examples I gave were just that, examples, not a comprehensive list. And as the chart shows there can be places that are wealthier with lower life expectancies–although it would seem that there are none of the very wealthiest with low life expectancies–there are none with lower wealth and high life expectancy.

      Remove the wealth and you remove the possibility of people living longer.

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  5. When talking about the economics required to save people’s lives, one number we used to use was a QALY (rhymes with Wally, stands for Quality-Adjusted Life Year). If we decide to pay for this, how many years of life with this give the beneficiaries?

    Seat belts on school buses? $2,000,000 per life-year for the kids who wear them.

    Testing babies with recent African ancestors for sickle cell anemia? $47.

    Cardiac surgery for a 63-year-old woman? About $8,000.

    A 3rd liver transplant for an active alcoholic? Better to buy seatbelts for a school bus. Plus there’s the issue of the person who dies because they didn’t get that liver – transplantable organs are scarce.

    Dialysis for kidney failure? Currently around $100,000. America couldn’t afford this for everyone until around 1970.

    Since we can’t afford everything, we make choices.

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    1. And economic growth, a wealthier society, allows us to afford more things. It also make more things available so we continue to not be able to afford everything and having to make choices but the old choices become more affordable as the economy grows leaving a net gain.

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  6. Economics is not some separate thing that we can do or not do. Economics is how we live, how we organize ourselves, how we reward productive behavior. The better your economy, which is to say the more capitalist your economy, the more money is washing through your population, and the better and more resilient everything works.

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    1. A person can only do three things with his wealth- hoard it, spend it, or invest it.
      Spending is super good for the economy- even yacht builders and greenskeepers need to eat.
      Investing is even better. Money has the potential of turning into more money via giving people jobs.
      Hoarding isn’t as good, and usually people are forced into it via high taxes and so on. When the government is on the prowl to take people’s money, people spend time and effort in hiding it and hoarding it.

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