At What Price?

The renowned medical historian C. E. Rosenberg describes epidemics as dramas that unfold, with remarkable consistency, in three acts. The first features denial, not so much because of a failure of imagination as because epidemics always represent a threat to our interests. Merchants fear for the loss of trade, politicians fear for their electoral prospects, governors for their capacity to manage, and all of us for our customary ways of living. But this first act inevitably ends with reality intruding, as sickness and death penetrate our reluctance to see. The second act, then, is the negotiation of our private and public responses as we reconcile competing values, interests, and ways of seeing to impose some sort of order on the threats. The final act, when containment has been achieved, often ends with a whimper, though evidence suggests we may be permanently changed.

Beyond immediate health concerns, epidemics may simultaneously make visible and upend the assumptions we’ve taken for granted about the world and what’s important. The resulting drama, Rosenberg tells us, serves as a test — a test of the relationships among our “social values, technical understanding, and capacity for collective and private response.” Epidemics test our individual and collective character.

Two recent books by economists, one published in the early days of COVID‑19 and the other just before, offer direct and indirect insights into what this current pandemic reveals about us — about how we deal with crisis and how we choose between competing priorities.

Economics in the Age of COVID‑19, by the University of Toronto economist Joshua Gans, is the first in what MIT Press envisions as a series on what economics can teach us about the coronavirus pandemic and, presumably, what the pandemic might teach us about economics. In this first contribution, Gans imagines what the drama of COVID‑19 might have looked like if we had simply followed the math and the science. His bottom line is captured in the title of his first chapter: “Health before Wealth.”

Combining aspects of epidemiology and some core principles of economics, Gans makes a convincing case that what needed doing was an immediate lockdown of much of the economy, keeping people and businesses afloat with income-contingent loans, while seeking a vaccine and building a “testing economy” that would guide a carefully targeted and phased reopening. In a pandemic, he explains, the usual trade-offs just don’t work; we can’t simply choose a little more health for a little less economy. Either health trumps economy or we pay a heavy price in both; we must come to this understanding and act quickly, he warns, as delay or drift exponentially increases costs.

This is not simply hindsight. Gans wrote all this at the start of the lockdown — in haste, he acknowledges — so that his insights might be available in time to make a difference. We would undoubtedly be better off if his advice had been consistently followed.

The haste with which Gans wrote does show, especially in later chapters where he considers what lessons should be drawn for the future. He imagines a global approach to pandemic prevention and management that seems somewhat naive, as does his uncritical admiration of the Bretton Woods institutions, particularly the International Monetary Fund. Gans fails to address what global cooperation might look like in this “America First” moment or to explore the consequences of global cooperation organized around competing poles. And while he recognizes that market incentives will have to be adjusted to get the innovations we need for effective prevention and mitigation, the idea of public enterprise seems to reside outside his window of possibility.

The strength of this book, however, is in its first chapters, where Gans sets out what smart decision making would have looked like in the early months of 2020. But how do we explain the gap between how governments actually behaved — the lack of preparedness, the dithering, the inadequate testing, the premature reopening of the economy — and the economic principles he proffers? The only hint of explanation is his suggestion that most of us just don’t get pandemic math (he actually provides an optional math lesson for those of us bold enough to wade in).

There is something almost quaint and certainly revealing in the implication that if we — individuals or the state — only got the math, we would know how best to pursue our interests and would therefore make the right choices. It’s quaint in that Gans suggests we would all be better off if only economists were freed from the pressures of politics and could just make the decisions for us. It’s revealing in that his version of economics seems to blind him to the questions of who benefits, who pays, who chooses. It’s not just bad math or incomplete information at play when the right-wing pundit Glenn Beck says, “I’d rather die than kill the country.” Or when Dan Patrick, the Republican lieutenant-governor of Texas, says that losing a generation of grandparents (the seventy-year-old himself included, presumably) is a price we should be ready to pay to keep the economy open: “If that’s the exchange, I’m all in,” he told Tucker Carlson in late March. There’s something else, something sinister going on. Just who is being sacrificed here and for whose benefit? Of course, competence, knowledge, and a bit of math matter. But bad math and incompetence alone cannot explain what’s happening in Trump’s America.

What seems to be playing out, rather, is what happens when the economy is treated as something separate from society and culture, when people are valued on the basis of how they contribute to or benefit from it, when we conflate wealth and worth, price and value.

COVID‑19 is a combined health, economic, political, and social catastrophe. The virus has preyed on pre-existing inequities and has revealed and amplified cracks in our systems and institutions. And amid the death and havoc, it has created some big winners. This is Rosenberg’s drama of competing interests, conflicting ideologies, and uneven power. But in Gans’s version, the social and the political disappear. He gives us a plan to get back to the normal pre-pandemic trade-offs and market mechanisms without considering how that normal might have contributed to both the disaster and our uneven responses to it in the first place.

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Howard Steven Friedman’s Ultimate Price, written with exquisite timing just before the pandemic, helps to fill in some of what is missing from Economics in the Age of COVID‑19. Friedman, a statistician and health economist at Columbia University, asks, How do we put a price on human life? What is human life worth, in dollars and cents? He understands that many of us find the idea of pricing human life repugnant, but he warns that it’s important to recognize that this is something that happens routinely: for example, when governments determine the costs and benefits of regulations, when courts assess compensation for victims or their families, when insurance companies set premiums and benefits, and when businesses weigh the risks and liabilities of investments. We had best understand how this is done, and why it matters, he tells us, so that it might be done better.

In meticulous detail, Friedman shows that not all lives are valued equally, that social and economic inequalities are often reproduced and compounded in how we calculate the value of any one life. Some measures incorporate factors such as income or expected lifespan, and thus they reproduce gender and racial wage gaps and disadvantage those who engage in unpaid labour and, as always, those who live in poverty. To be valued less is to be protected less. If we must “monetize” human life, he argues, let’s do so transparently and fairly.

With Ultimate Price, Friedman demonstrates how even measures that purportedly treat all life equally are influenced by ideology and economic interests. Friedman explains how the most basic calculations are fraught with theoretical and methodological — not to mention moral — complexity. For instance, the “value of a statistical life,” a measure commonly used in Canada and the United States, sometimes relies on surveys in which people are, in effect, asked how much they would pay for an extra year or so of life. Other approaches use information about risky work, specifically how much employers have to pay to get people to do those jobs. The survey approach is highly subjective, while the supposedly more objective measure assumes that the people who take those risky jobs have a choice, which is often not the case. Such imprecision and uncertainty are fertile soil for politics and power to play out, as competing interests try to influence how life is costed. Some players are simply better equipped and better resourced to get their way. Friedman describes, for example, how corporate lobbyists often push to lower the value attached to life so that in any given cost-benefit analysis, regulatory costs will swamp the benefits.

Some calculation techniques do this work more subtly. For example, discounting, a standard technique for assessing investment options, is often used in cost-benefit analysis. In investing, it refers to reducing the value of returns the further out in time they are. When used to price life, however, it means giving less value to lives in the future than to those in the present. And that means, in turn, that the benefits of environmental regulations, which play out over the long term for future generations, are routinely devalued.

Friedman draws a vivid picture of how uneven power, competing interests, and social and economic inequality influence how we value life — a picture that can help us understand why we are almost always unprepared for the next crisis, how short-termism is built into our policy processes, and how trade-offs make sense only when we also ask who wins and who loses. At the same time, he doesn’t want to throw out cost-benefit analysis altogether. It can help, he argues, to make the tough choices.

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With all the crises coming at us, how do we determine those that deserve our attention now? At the end of Economics in the Age of COVID‑19, Gans makes the cost-benefit case for investments that could help us prevent and manage future pandemics. Assuming a price tag of $10 million per human life — which he says is the going rate — investing a few billion now is a “no‑brainer.” As we contemplate such investments, however, Friedman wants us to understand the limits, inequities, and spurious precision of cost-benefit analysis, to put it in perspective, to make it fairer, and to ensure the price we attach to human life is high enough so that the environment gets a fair shot too. But his proposed reforms, as important as they are, don’t really get at the larger question of whether putting a price — whatever the figure — on a human life or even on human health might actually do damage. He does not envision a more equal society; he just doesn’t want to make things worse.

Both books, taken together, offer important insights about how we think, and about how we ought to respond to this crisis and the next. But they also illustrate how quantifying or monetizing all values can obscure or even diminish what’s important — burying in mathematical equations the debates about values and priorities we ought to be having. Surely, there are some values that trump others, some things that money can’t buy. Human rights are not to be traded off, for example, and the environment ought to be protected through some minimum standards not subject to cost-benefit analysis.

Gans and Friedman, each in his way, want us to be savvier about how we count, to be better at calculating costs and rewards, to be equipped for the tough trade-offs we must make as we pursue our self-interest in a world of scarcity and limited possibilities. Of course, that’s to the good. But the lens through which they view the world offers only a partial and therefore distorting view of what it is to be a human living in society with other humans.

In this current crisis, we have seen self-dealing but also bursts of solidarity, with some willing to sacrifice others but some ready to sacrifice themselves. We have seen the importance of science but also how power and science can collide, with truth the victim. We have seen how scarcity for the many can coexist with abundance for the few — often with disastrous, even fatal consequences. We have seen that self-interest and the common good may be at odds, and how societies that value cooperation seem, in this moment, to have outperformed those that favour competition.

Some decades ago, I was trained as a sociologist, and perhaps my readings of these two books and these past few months have been influenced by my ongoing disappointment that economics, rather than sociology, has emerged as the mother discipline of the social sciences. Having said that, it seems clear that the view of humans as profit maximizers or cost-benefit calculators in a world shaped by competition takes us only so far. To understand how we got here and how we might get to a better place, we need to get at the ideas people hold about what’s important, how the power to shape the future and even “the truth” is distributed, how much we trust one another, and how able we are to align our actions in pursuit of the common good.

The great sociologist Zygmunt Bauman once lamented that in this age of crisis, when our collective challenges — climate change, nature loss, inequality, insecurity, racial injustice — are so threatening, our collective tool kit is at its weakest. If we are to meet the challenges around the next corner, we will need multiple lenses, -multiple disciplines, and a true rebalancing of the individual and the collective.