During discussions around coronavirus, I have sometimes seen people claim that it is fundamentally wrong or abhorrent to try to value life in monetary terms. But from the perspective of government decision-makers, one thing worse than explicitly assigning a monetary value to life would be to not do this. Why?
Well, if you aren’t explicit about the value of life, then you are implicitly doing one of three things:
(1) Assigning zero value to life
(2) Assigning an infinite value to life
(3) Assigning some arbitrary but hidden value based on your intuitions and emotions at a particular point in time
I don’t think most people who object to the valuation of life actually believe and support (1) or (3). Instead, they believe (2), and that life should be priceless and prioritized above all else. While this is intuitively plausible, what would be the consequences of this?
Crucially, it implies that quality of life is irrelevant. Governments, when weighing up what decisions to make, would compare the costs and benefits of various options, and always choose the option that saved the most lives. That’s because the ‘benefit’ of such an option would always be infinite and therefore outweigh any costs: even if the costs of that option, in terms of reduced quality of life, were extremely high.
Governments would ban all activities that had any risk to life associated with them. We would not be allowed to socialize again – ever. Even post-coronavirus, there would still be the risk of other infectious diseases that can be fatal, including seasonal flu. Many sports and outdoor activities would be banned, as would driving, alcohol, and eating unhealthy food.
Economic activity would be allowed only to the extent that it helps generate funds to increase spending on life-saving treatments.
There would be no government spending on mental health, other than where it prevents suicides. Anxious and depressed but not suicidal? Tough luck. Your suffering is irrelevant. Same for physical health – if you’re in chronic pain, you’ll only get treated if it’s a risk to your life. And the same would be true of all other government spending elsewhere, whether that’s education, housing, welfare, or culture.
It’s because we care about quality of life as well as length of life that we must assign a value to life. It’s the only way we can make appropriate trade-offs between them. Now, we don’t literally have to assign a monetary value to do this, but to compare costs and benefits you really need them to be in the same unit. You could use potatoes as your unit if you really wanted. But from the practical perspective of how to allocate resources, using money as your unit seems sensible.
Despite the clear need to value life, it’s far from clear what the most appropriate method is to do this. This document from the organization Social Value UK summarizes a range of approaches, including the human capital method, contingent valuation studies, looking at labour markets, and looking at consumer preferences. Each approach has strengths and limitations, but any of them is more appropriate than avoiding the issue altogether.
Experiments of Living 