Abstract
The fact that numerous institutions valuate human life monetarily on a regular basis has long achieved the status of a well-known secret. Yet the technical details of how institutions carry out such valuations are obscure to nearly anyone outside of a small circle of experts. When such technicalities are exposed, the well-known secret suddenly appears far less known, far less obvious, and far more controversial. After all, how should one react when learning that experts determine the acceptable levels of arsenic in our drinking water by comparing the price of cleaning the water to the dollar amount they assign to the deaths the arsenic is predicted to cause? At this point, monetizing life’s value becomes stunning, outrageous, and very upsetting—yet another puzzling case of public apathy toward an issue that should draw everybody to the streets.
Howard Steven Friedman’s most significant achievement in Ultimate Life: The Value We Place on Life is laying out—in an accessible, clear, and engaging way—the numerous technical details of how statisticians and economists put prices on human life. The book covers multiple cases and areas: the 9/11 compensation fund, court rulings on cases of wrongful death, environmental protection regulation, automakers’ decisions on recalls for safety issues, life insurance, health insurers’ valuations of medical treatment, decisions on whether to have children, and more. Many of these cases have already been studied by sociologists of valuation, who discussed them with more emphasis on their cultural, social, political, and historical dimensions (Fourcade 2011; Livne 2019; Quinn 2008; Zelizer 1979, 1985). Still, Friedman’s sensitivity to detail and his reasoned methodological critique of valuation and cost-benefit techniques is useful in revealing the numerous assumptions these techniques make. The book is testimony to the fact that valuation methods face much criticism and doubt from within the very circle of experts that design and apply them, and it provides a very good introduction to major concepts in the field, such as statistical life and contingent valuation.
Writing the book for a general readership, Friedman deliberately tries to provoke unease toward the very idea of putting a price on something as sacred as human life. His argument is most powerful, however, when it goes beyond this basic provocation. Throughout the different chapters and cases that the book presents, Friedman delivers three major critiques toward monetary valuation methods: they involve many arbitrary decisions, they abstract value to the point of becoming meaningless, and they generate and reproduce racial, gender, and class inequalities and biases.
Each of these critiques is of much interest to sociologists. Arbitrariness and abstraction are, according to Friedman, endemic to virtually all acts of monetary valuation. In his chapter on pollution, for example, Friedman discusses at length the principle of discounting. As a rule, economists treat $100 in the present as more valuable than $100 in the future. In line with this approach, when weighing the immediate benefits against the future damages of present actions, statisticians discount the future damages’ value just because they lie ahead. Small changes in the discount rate may lead to very different results: if one sets the discount rate at 3 percent annually, a $100 dollar gain today would justify a damage of about $56 in twenty years, whereas a 1 percent annual discount rate would make today’s $100 comparable to a damage of about $69 in twenty years.
This approach is disastrous when applied to cost-benefit analyses of industrial pollution. Because the health and environmental effects of current pollution will only be felt in the future, statisticians regularly discount the damages that contemporary industries inflict on the population and the environment. Friedman points out that the discount rate has profound impact on such calculations and by consequence on environmental regulations, which underscores the necessity of eliminating the discount rate altogether. He does much service in revealing how much people should care about obscure technicalities such as this one—and how the application of abstract economistic logics and arbitrary decisions on the level of the discount rate may send long-term policy-making in calamitous directions. The argument is even stronger as Friedman discloses the social inequalities embedded in this and other calculations—for example, the fact that the cost-benefit evaluations of environmental impact are applied indiscriminately even though poor and minoritized populations are far more likely to be exposed to pollution and bear its consequences. The reproduction of racial, gender, and class hierarchies in monetary valuations of life occurs in other areas as well. Most obvious are court rulings on wrongful deaths, in which judges determine the value of lost lives by the victims’ future earnings, which effectively reproduces the extreme wealth and pay gaps that have characterized the U.S. economy throughout its history.
Friedman is a statistician and health economist, which makes him a member of the very expert community that he criticizes. This accounts for his in-depth knowledge of the methods in question, yet comes at the price of him accepting many of the field’s assumptions uncritically. The book lumps together cases where institutions and experts valuate life formally and mathematically (e.g., cost-benefit analyses of environmental impact) with other cases where no such valuation takes place (e.g., decisions to terminate a pregnancy). The connection between calculative valuation methods and these cases is not an empirical finding, but a problematic assumption Friedman makes: in some way or another, everybody prices life and calculates accordingly. Similarly, assertions such as “No health system could function without considering the costs and expected health benefits of care” (p. 4) illustrate that cost-benefit analysis has become naturalized to the point that even the most critical statisticians cannot imagine a world without it.
This is particularly puzzling given that Friedman acknowledges that the goal of many monetary valuations of life is not generating an accurate price but reaching a result that will be socially acceptable. To take one example, a major goal of the 9/11 compensation fund was protecting airlines from lawsuits that threatened to drive much of the industry into bankruptcy. Families had to waive the right to sue airlines as a condition for receiving compensation from the fund (p. 10), and compensation was set at rates high enough to attract families to the fund and not the court. Similarly, even in the United Kingdom’s highly rational and bureaucratic health care system, cost-benefit calculations have been amended under public pressure. As Friedman himself shows, when the social situation so requires, numbers, variables, and formulae can always be tweaked and amended, so that they become less contested.
Much of the social power of monetary valuation methods and cost-benefit analysis lies in a combination of their opacity to the general public and the appearance of objectivity that they create (Porter 1995). Friedman’s book is important in undermining both and potentially making the discussion about the pricing of life more democratic and inclusive. It is important, however, that this discussion will go beyond the boundaries of statistical and economistic discourse, because these methods are never applied outside of a social and political reality. A full understanding of how various monetary valuations of life operate in our society—and how they should be questioned, reformed, and perhaps even eliminated altogether—requires incorporating insight from areas beyond statistics and economics. Unfortunately, this important book does not fully venture into this realm.