Covid-19: Can - and should - we put a monetary value on life?
With intense debate around the benefits of coronavirus restrictions compared to their costs, Dr Esmond Birnie, writing as both a Christian and an economist, explores the ethical dilemmas around putting a price on human life and the price of public policies
OSCAR Wilde's Lord Darlington famously described a cynic as "a man who knows the price of everything and the value of nothing".
Economics tries to describe how the prices and values of things are determined. It is assumed that as consumers we are engaged in a constant endeavour to increase our enjoyment through consuming various combinations of goods: bread, TVs, cars, coffee etc. This is called utility maximisation.
Take this a few steps further and perhaps it is possible to compare various outcomes in society, such as various government policies, by counting the utility produced.
This isn't just a mathematical game. One of the key political debates across the world at the moment is about the benefits of lockdown versus the costs (especially the economic cost) and hence how much longer lockdown should continue.
More specifically, the dilemma - be it economic, philosophical, ethical or even theological - is this: should we place a cash value on human life?
Here's an admittedly very rough illustration of how we might apply a cash value to life in the context of the Covid-19 response.
Take the Imperial College London epidemiologists' modelling which suggests that without lockdown but using only 'moderate' containment policies, 250,000 people would have died in the UK.
Let's assume that the actual toll from the virus will be about 50,000, including those who die because of less treatment of other conditions. By implication, about 200,000 lives have been saved.
We know most of the victims of Covid-19 have been elderly, so let's assume that on average for each of those 200,000 saved, eight extra years of life were gained.
That figure of eight years is rather approximate. It is based on the English and Welsh data showing that the average age of those dying from Covid was in the early 80s and on average an additional eight years could be expected.
Eight times 200,000 is 1.6 million extra years of life - but how do we value that?
Many readers will believe or have an intuition that human life is of infinite value: it is priceless. There could be a number of sources for that belief - one being the Judeo-Christian doctrine that we are all created in the image of God
The National Institute for Health and Care Excellence (Nice) has operated a policy whereby drug treatment was not approved if it cost more than £30,000 per year of treatment.
In other words, one part of the UK NHS accepted, albeit implicitly, £30,000 as the value of a year of human life: in the jargon, the value of a 'Quality Adjusted Life Year' (Qualy).
If we apply that figure the 'benefit' of the lockdown becomes 1.6 million times £30,000, or about £48 billion. Obviously, a very big number - but what of the costs?
The UK faces a very big recession in 2020. According to the projections of the Bank of England, GDP could decline by as much as 14 per cent.
What remains very unclear is how quickly we might recover from the Covid recession. It could take a while.
Let's assume UK total income drops by 10 per cent and then there is another two years before output returns to its pre-Covid level; the total loss of output could then be as much as £400bn.
What, if anything, should be concluded from this tentative exercise?
On the face of it, doubt might be cast as to the value of the lockdown given that the consequent recession is likely to be many times larger than the benefit derived.
That said, these are not just enormous numbers but also very uncertain ones.
There are, for example, many available figures which attempt to capture the value of a human life.
The Treasury in London use a higher figure: £60,000 per year. There are really big variations internationally.
Numbers used by various agencies in the USA are sometimes about four times higher than that implied by Nice.
Also, very importantly, even if there had been no government-inspired lockdown there would still have been immense economic disruption.
Some economists estimate that a pandemic on par with the 1918/19 Spanish Flu (killing 380,000 in the UK) would cost about 6.0 per cent of GDP, even with no official lockdown measures.
Over and above a debate about the technicalities, there is a deeper question of whether to engage in this exercise at all.
Many readers will believe or have an intuition that human life is of infinite value: it is priceless.
There could be a number of sources for that belief - one being the Judeo-Christian doctrine that we are all created in the image of God.
By implication, a lot could be said against a too utilitarian approach to the Covid response.
Importantly, wealth and health are not in opposition: if a lot more people become poor or unemployed then ill health and mortality will rise
At the same time, there are realities about the human predicament - we live in an imperfect, even 'fallen', world. Resources are scarce, as economists would say.
Society could devote 100 per cent of GDP to health care rather than 10 per cent.
That would save some lives but obviously there would be a lot of other 'costs', including loss of life.
We could invest a lot more into transport safety making cars, trains and planes safer but the cost of that would be fewer houses would be built and there would be fewer factories and jobs.
New York Governor Andrew Cuomo said recently: "I want to be able to say to the people of New York I did everything we could do.
"And if everything we do saves just one life, I'll be happy."
This was a nice piece of political rhetoric but it is much less clear that it represents sound policy.
Both as a Christian and an economist I would say that whilst we should not put a precise cash value on human life we cannot avoid being sensitive to the costs of all public policies.
The initial lockdown decision was justifiable especially given the information available at that time.
At the same time, the longer lockdown continues the danger increases that the costs will become intolerable even given the benefits.
Importantly, wealth and health are not in opposition: if a lot more people become poor or unemployed then ill health and mortality will rise.
Many of the costs of lockdown (less jobs and schooling) weigh most heavily at the bottom of the distribution.
Finally, a word of sympathy for governments. The science informs but doesn't really tell us what we should do. Politicians have to make decisions on our behalf where all the options are agonising.
Dr Esmond Birnie is senior economist at the Ulster University Business School.