From now on, I’m going to assign Mike O’Hare’s essay every time I teach policy analysis. If you haven’t read it, I suggest that you stop and do so now; what follows is just a pair of footnotes to it.
1. It’s not necessary to invoke “compassion” to justify redistributive measures. Diminishing marginal utility means that great inequality is almost always inefficient. Insurance markets have their own characteristic failures, and it will often be the case that the market can’t sustain some risk-spreading arrangement that would be mutually beneficial. That’s what the idea of “social insurance” is about. (See Richard Zeckauser, “Risk Spreading and Distribution,” in Redistribution Through Public Choice, Harold M. Hochman and George E. Peterson (eds.), New York: Columbia University Press, 1974, 206-28.)
2. The principle of benefit-cost analysis is pretty bullet-proof: it merely insists that public choices be efficient, substituting for the market as a mechanism for ensuring that resources aren’t wasted. The practice of benefit-cost analysis is more problematic; since hard-to-measure and hard-to-value benefits and costs are often omitted, thus effectively valuing them at zero, it’s likely to be somewhat biased against intervention.
But the supposed moral outrage against valuing lives (properly, valuing the prevention of statistical deaths) reflects mere confusion. As Schelling pointed out a long time ago (see “The Life You Save May Be Your Own” in his Choice and Consequence), in making private decisions we don’t put an infinitely negative value on every risk of death, so why should we do so publicly? In practical terms, using the right value – $7M-$10M under current U.S. conditions – will identify lots of opportunities to save lives.
Now that the Obama Administration has decided to reverse the Bush Administration trend of de-valuing statistical deaths, the business community has suddenly decided that benefit-cost analysis – which it loved when the result was anti-regulatory – is far too “subjective” for daily use, and wants the decisions returned to its tame politicians.
If I said that the main difference between liberals and conservatives (as those terms are used in contemporary political discourse in the U.S.) is that liberals value human life more than conservatives do – especially, but not only, if the human lives in question belong to poor people – that would be rude. So I won’t say it.
Footnote Naturally, the “Right-to-Life” folks, including the Catholic Bishops, have nothing to say on the topic. It seems that “life” is infinitely valuable only when ending it might relieve suffering, but not if saving it would cost money. Or, as Barney Frank said, they believe in a right to life that begins at conception and ends at birth.