On Social Costs and the Value of a Life

My musings for the day on social costs, the value of a life, and the influence of faith.

There’s a reason economics is called the “Dismal Science.” At first, it was because economists were so adamant about the equality of all mankind.

Nowadays it’s because we often have to talk about tradeoffs, among which is the ever-present debate about healthcare.

End of life care especially is expensive, and often cannot truly prolong a life, but simply makes the end more comfortable. This type of care is the most expensive and a primary driver in all healthcare spending across the United States. At some point, family members are often faced with the question: “When do we stop?”

Economists determine, by various means, how we as human beings value a human life in economic terms. This is called the statistical value of a life, or the value of a statistical life. You may ask “Why are we even doing this kind of calculation?”

In a world with a limit on natural resources, time, and energy, there is one universal truth that will always exist in this life: scarcity. It’s what makes supply and demand work. It is also what makes each moment special, in that every moment is unique to itself, and some moments are so scarce that we remember them forever. The same goes for resources to devote to those who are on their way to the next life. Resources devoted to the service of one person are resources that aren’t given to another. Scarcity in life means making some really hard choices, including how much to compensate the families of those who have lost a loved one to replace the economic security they are now missing. Although a seemingly heartless calculation, economists do it because it is important for us socially, and in some moments, for those who are incredibly vulnerable. It is quite the opposite of heartless.

These types of calculations and tough choices are a part of the “greater good” that we are always talking about in our culture obsessed with heroes and comic-book movies. The “greater good” can be anything from using tax money in the most efficient way possible so that we can make room in the budget for other social programs we have set to the family who decides to forgo prolonging the beautifully lived life of a grandparent with a terminal illness so that the family can afford to support the life of a child.

There will always be tradeoffs.

There is one cultural driver that seems to exasperate these tradeoffs.

For those who believe in an afterlife and feel well prepared for it, the prospect of death is not so terrifying as it may appear to others. For family members assured that their relationships will be perpetuated beyond the grave, death is a doorway through which we can allow loved ones to walk without having to clutch at the threshold.

But the more society (which consists of individuals) turns away from the surety of life after death and sees death as an inescapable end of all existence, the more we tend to fear it, push back against it, and seek to delay it. Such a cultural shift changes the way we make the tough choices, and may push us to devote more and more resources to those last few moments that delay the inevitable. The more we view death as an enemy, the more resources we devote to fighting a war we inevitably will lose. In a world of scarcity, that leaves less for the rest.

What does that mean for society? I haven’t quite figured that out. But maybe some day.


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