What Is The Value Of Life, Pt. 2: Economics

Summary: We’re picking up on the topic we started last week asking <a href="https://www.oldmantalking.xyz/what-is-the-value-of-life-pt-1/">what is the value of life</a>? For many, Life is priceless. At least, that’s what we’ve been telling ourselves and telling our children for the past couple of centuries. The concept was codified by Immanuel Kant in 1785 when his book, <a href="https://www.earlymoderntexts.com/assets/pdfs/kant1785.pdf">Foundations for the Metaphysics of Morals</a> (also published as Groundwork for the Metaphysics of Morals) presented the idea that not only was there not a monetary value sufficient to exchange for life but that there was no other form of trade or presumed equivalent. In short, the only thing that could replace a human life was another life, and even that comes with some difficulty in terms of equity. That kind of statement is easy enough to make if one is a philosopher. Statements like that make us feel good, it aligns with our religious beliefs and an overall general sense of morality. Most contemporary religions suggest that every life is sacred, making it theoretically impossible to place a price tag on any life. Sounds simple enough, doesn’t it? But not everyone is a philosopher. Specifically, economists have not only disagreed with Kant’s premise but held that the monetary valuation of human life is necessary for certain risk assessments and in determining things such as accident liability. One of the most famous instances of such valuation comes from a <a href="http://www.cnn.com/US/9909/10/ivey.memo/">1973 internal memo</a> developed for General Motors as they considered the cost of “automotive fire-related fatalities” in GM vehicles. At that time, the value of human life, at least the life of a person owning a General Motors vehicle, was determined to be $200,000. That would be the equivalent of about $1,223, 855 today when <a href="https://www.in2013dollars.com/us/inflation/1973?amount=200000#:~:text=%24200%2C000%20in%201973%20is%20equivalent,1973%20inflation%20rate%20was%206.22%25.">adjusted for inflation</a>. As one might imagine, once the GM memo was made public as part of a lawsuit over the placement of gas tanks in the ill-fated Pinto, public opinion was not terribly supportive. Whether we’re talking about $200,000 or a million dollars more than that, both seem incredibly insufficient, and more than a few people will argue with Kant that there is no amount that sufficiently compensates for the loss of a parent, spouse, child, or friend. Defense of Kant’s philosophy loses in terms of practicality, however, when courts are forced to decide restitution, insurance companies are asked to offset risks, or when we start talking about reparations for the lives of enslaved and indigenous peoples. These are situations that cannot be resolved unless we give in to a limited value justified, for the most part, by subjective opinion. There are dozens of forms of valuation with varying levels of complication. But for today’s conversation, let’s look first at the literal value of the elements composing the human body, an actuarial accounting of human value, and the economic impact of an individual living in the United States. When we’re done, I think we’ll find that the value of life is much more complicated than what we extracted from Kant’s thesis. Tell yourself whatever you must to maintain a positive sense of self-worth, but at the end of the day, priceless is not a concept that fits well with contemporary economics, and that, ultimately, changes the conversation. Let’s Get Literal

What Is The Value Of Life, Pt. 2: Economics

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