Non-economic damages

The use of the term “non-economic damages” in the “tort reform” movement is thoroughly disingenuous. It’s hard to even imagine what such a loss would be. To an economist, anything that someone values — in the sense of being willing to forgo something else to have it — has “economic value.” If X will pay Y to have Z, or refuse an offer of Y to give up Z, then Z is worth (at least) Y to X, by the only standard that ought to matter.

What’s at stake is the status of non-financial losses. The notion that financial losses are real, while non-financial losses are somehow fictitious, must — unless it is merely special pleading — reflect an astonishingly false sense of values. Under what conceivable theory should the loss of a million-dollar house be fully compensable but the loss of one’s eyesight, for example, be treated as worth only $250,000? Would you give up your eyesight for that sum? Neither would I.

UPDATE here.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: