Wednesday, March 12, 2014

How economics can put a price on life

Economics is so mainstream, we can put a value on a kidney, and even the donor’s worth

Friso Gentsch/dpa/Corbis 

In 2006, economist Nicholas Stern made a series of alarming predictions, in a report commissioned by the British government, of the potential results of a worsening climate. Among them were the extinction of up to 40 per cent of all species, 200 million climate refugees—many of them ominously gathered on Europe’s collective lawn—and “an average reduction in global per capita consumption of at least five per cent, now and forever.” Stern has been roundly berated in the media ever since, particularly over the refugee projection, but the actual debate in the media was waged over the five per cent, and whether he exaggerated the cost of acting in the future while underestimating the cost of acting in the present.

For Philip Roscoe, professor of management at St. Andrews University in Scotland and author of the evocatively titled I Spend, Therefore I Am: How Economics Has Changed the Way We Think and Feel, the response to Stern was a perfect example of his book’s target: the triumph of the economic model. Once Stern introduced his own calculator and slide rule into his projections the argument could only be engaged on those terms: There is no market price for species extinction or massive refugee influx, so there was, in effect, no argument to be had. After a half century of measuring everything in dollars and cents and proclaiming how financial incentives control all behaviour, Roscoe says, “We lack the language to understand or even talk about issues in any other way.” What’s more, economic speech brings into existence what it postulates: “human beings as self-interested, calculative and even dishonest entrepreneurs of the self.”

Literally. Roscoe sees the reach of the economic model of humanity in the way suffering dictated by economic policy—the effect of the austerity program in Greece, say—is seen as “the wrath of God—inevitable, and in its inscrutable way, just.” But also, eight years after Stern, in the appearance of theoretical and even actual markets in human body parts.

For the rest of the story: http://www.macleans.ca/economy/when-the-price-is-right/

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