In his excellent and thought-provoking 2018 book, Stubborn Attachments, Tyler Cowen writes (on page 93; original emphases):
More practically, the additional wealth that accumulates as a result of economizing on life-saving expenditures does lead people to buy safer cars, to take less risky jobs, and so on. So it can be argued that we will save some number of other lives by invest less in life preservation for the elderly. We don’t know whether an increment of wealth saved will in fact reduce or preserve other human lives, but there is some chance that this might be the case. And this possibility lowers the value of spending a lot of money to extend a human life. So, in a contemporary setting, a human life should probably be valued at less than $4 million, or whatever other sum the willingness-to-pay method, or some other utilitarian calculation is going to serve up.
We may not know the exact correct valuation of an individual life, but we do know that the possibility of commensurability, the pull of the more distant future, the ongoing replenishment of human civilization, and the value of investing in future lives, when considered as a whole exert some downward pressure on how much we should invest in extending the lives of the elderly today. My arguments therefore suggest a lower estimate of the value of a life, including an older life, than most other plausible frameworks, because replacement and replenishment of civilizational flow are considered as one factor among many. Replacement and replenishment should not be taken as the final word, but yes, they do exert downward pressure on our value of life estimates.
To put it more concretely, today in the United States we are spending too much on the elderly and not enough on the young.
I wonder how Tyler would reconcile this point with his rejection of the relevance of the fact that Covid-19 is overwhelmingly a disease that is fatal to old people – especially very old and infirm people. I don’t doubt that some attempted reconciliation is possible, but I do doubt that I would find such an attempt to be persuasive. (Not that Tyler, or anyone else, should care whether or not I would find it persuasive.)
The lockdowns and other restrictions on economic and social activities are astronomically costly – in a direct economic sense, in an emotional and spiritual sense, and in a ‘what-the-hell-do-these-arbitrary-diktats-portend-for-our-freedom?’ sense. Yet this immense cost is being borne chiefly to extend for a few months or, at most, for a few years the lives of the elderly. That the vast bulk of these costs aren’t paid in the form of cash is irrelevant.
But even looking only at cash payments – and only those made by the U.S. government – we get a monetary-cost figure that surely the Tyler Cowen of 2018 would find excessive. To wit –
Let’s say that the net number of deaths avoided, over the course of the response to Covid, by government lockdowns and other restrictions will, in the end, top out at 1,000,000 – which, in my opinion, is wildly excessive (but we’ll go with it here). And let’s take Tyler’s example of an excessive monetary value-of-individual life of $4 million. The result is that the Covid lockdowns saved $4 trillion worth of human life.
As of September 30th, the U.S. government alone had spent, in response to Covid-19, $1.62 trillion. I cannot find a reliable figure that’s more up-to-date. But taking into account all that the U.S. government has spent additionally since September 30th because of Covid – and also into account what it will spend in the future – and adding to this sum the total amount of money spent by state and local governments in response to Covid, surely we’re getting close to – and perhaps much in excess of – $4 trillion.
Worth it? Not in my book. And, I think, not in the literal book of Tyler Cowen circa 2018. And these expenditures in response to Covid are not the major cost. The major cost is the lost production, the disrupted lives, and the reduced rate – perhaps permanently – of economic growth. Given that one of Tyler’s most intriguing arguments in Stubborn Attachments is that we discount the value of the future far too greatly – implying that we value the present far too much relative to the future – I believe that the 2018 Tyler Cowen would be a most intriguing, perhaps even confrontational, guest of the 2020 Tyler Cowen on Conversations with Tyler. It’s a conversation that I’d very much like to hear!
Reprinted from Cafe Hayek