Here we go again–another article about economists measuring uncomfortable things like the value of human life in trying to figure out what our policy priorities should be. This time around, I have more than the usual objection to what my fellow economists have cooked up.

The article is Fixing the world — by the numbers:

Cutting our carbon emissions to reduce global warming? Not a top priority.

Combating terrorism? Not even on the list of priorities.

Zinc distribution, making school cheaper, and preventing heart attacks? Much more important on a global scale.

If the world decided to fund such efforts, the benefits we’d see would be far greater than what we put into climate change and terrorism, which are central to the anxieties of the First World, and dominate its media coverage.

At least, that’s according to some of the world’s greatest economic minds.

The scholars, including Nobel laureates, are part of an exercise in practicality called the Copenhagen Consensus. They’ve ranked 30 solutions to world policy challenges according to the strict criteria that economics provides: costs versus benefits.

While that might seem like a cold instrument to wield, bereft of human emotion, economists say it’s extremely rational and provides an unencumbered view of just what will give us the biggest bang for the buck.

…

After all, the reality is that not everything can be funded. Choices must be made. The Consensus hypothesizes the spending of $75 billion over four years on solutions for those choices.

What would these experts do first with the money? After listening to Horton’s passionate arguments at the Consensus conference, which wrapped up at the end of May, the panel agreed that providing zinc, along with vitamin A, to children who lack them in the developing world, should be the highest priority.

…

Spending just $60 million per year on this program would yield more than $1 billion in economic benefits, Horton argues, in the form of better health, fewer deaths and increased future earnings. Put another way, for each dollar spent on this solution, we’d get $17 back.

…

Benefit-cost analyses, free from emotion, can also lead to some controversial results.

For instance, the Nobel panel didn’t place solutions to terrorism on their list at all. Economists say the costs incurred in trying to stop terrorists are simply far higher than the benefits.

Another issue that is top of mind for many is global warming. But not for economists. Here again, the costs to mitigate climate change outweigh the benefits. Besides, those benefits won’t be accrued until well into the future, a strike against any solution.

“Think about it rationally,” Horton says. “Because our impacts on the environment are so slow to occur, many of us aren’t as avid about undertaking them as we ought to be.”

The panel ranked it at the bottom of the list.

Chris Green, who teaches a course on the economics of climate change at McGill University, has warned in his work that tackling climate change will be much more costly than most of us think.

Green, who participated in the Consensus, says that while climate change is an extremely serious long-term problem, “My view is that we don’t have the means to deal with it, in any meaningful way, without major technology breakthroughs.” He wants to see an “energy technology race” started.

The panel agreed, and placed the development of low-carbon technologies, whatever they may be, at number 14 on the list.

Economists know that their work can appear as nothing more than cold calculations. Even Green concedes, “I’m not sure you want to frame policy directly on” benefit-cost ratios. And Jha warns of listening to expert panels. “They’re only right half the time,” he cautions.

If anything, the Copenhagen Consensus exercise helps us think differently about the problems of the world: That is, what we may think is important may not have the biggest impact on its most vulnerable people.

The article, which I suggest you read in its entirety, also points out other health- and education-related efforts they recommended.

OK, let me deconstruct this just a bit, taking things in (generally) increasing order of friction-causing potential:

• The basic idea of cost-benefit analysis is sound, and is the only rational way to approach these issues. We have limited resources and we need to figure out how best to use them–that’s the textbook definition of economics.
• When you’re talking about human life, things get very uncomfortable very quickly. People go nuts about assigning a monetary figure to a human life, but there is no other choice. We have to measure the cost of the broad palette of steps we must choose from as well as the benefits. That means we have to use a common unit. So whether we measure things in terms of money or some fabricated unit (which then requires us to convert the money costs of things like public policies into quatloos or whatever we arbitrarily decide to use), we’re still measuring human life. It’s extremely distasteful, and economists don’t like it any more than anyone else; we’re just used to thinking in such terms.
• Even more problematic is measuring human life in the future. How much are you willing to pay today to make a better life for people who won’t even be born in the next 25 or 50 or 100 years?
• The basic conclusion of the economists in this article, that global warming isn’t a high priority, is riddled with assumptions that I think are wildly incorrect and serve as a perfect example of how easily such exercises can turn in unintentional GIGO (garbage in, garbage out) demonstrations.

A quick aside: I can almost bet my keyboard that Joe Romm will jump all over the assertion that we need major technological breakthroughs to deal with global warming. Joe has pointed out many times over on Climate Progress that the number one hurdle in the short to mid term is policy, not technology. I agree, even if I don’t match his intensity in hammering the point home.

Back to those assumptions. Clearly they are assuming that either [1] global warming “won’t be that bad”, or [2] if it is, we can delay action now and fix it later. Anyone who thinks inaction on global warming won’t be a catastrophe just isn’t paying attention and should be ignored. I strongly suspect that the economists involved believe global warming will be bad, but that we can deal with it later and spend resources on more immediate problems now. This is a horrible misreading of the situation, in my opinion, since it completely ignores the mounting evidence that not only is global warming progressing much quicker than any science-based assessment predicted, but we could well be at or beyond the atmospheric CO2 concentration needed to trigger reinforcing feedbacks–the tipping point that leads to a runaway effect that we can’t stop.

Even if you don’t think we’re flirting with a runaway disaster, something that I believe no one knows with absolute certainty, despite the growing evidence, it’s even more likely that if we delay action now and it’s still possible to fix this mess later it will likely be far more expensive than if we start now (or started when Al Gore and others started screaming about this, roughly 20 years ago). We will have to take more drastic measures, some with a higher risk of going horribly wrong (i.e. almost any of the geoengineering proposals), and we will have to spend far more to mitigate the growing effects of global warming.

Finally, let me make a public request: Those of you, including many in the peak oil community, who like to treat all economists like your personal punching bags, please stop it and grow up. Lumping everyone into one narrow, negative stereotype like that is something we all should have been taught not to do in childhood. (Do I really have to trot out some cringe-inducing examples of racial, ethnic, religious, and gender stereotyping to make my point?) If nothing else, remember that there are economists out here–including your host on this site–who understand at the DNA level what global warming and peak oil mean, and we’re doing our best to fight the good fight.

And for those who don’t know the background of “dismal science”…

The dismal science is a derogatory alternative name for economics devised by the Victorian historian Thomas Carlyle in the 19th century. The term is an inversion of the phrase “gay science,” meaning “life-enhancing knowledge.” This was a familiar expression at the time, and was later adopted as the title of a book by Nietzsche (see The Gay Science).

It is often stated that Carlyle gave economics the nickname “dismal science” as a response to the late 18th century writings of The Reverend Thomas Robert Malthus, who grimly predicted that starvation would result as projected population growth exceeded the rate of increase in the food supply. Carlyle did indeed use the word ‘dismal’ in relation to Malthus’ theory in his essay Chartism (1839):

“The controversies on Malthus and the ‘Population Principle’, ‘Preventative Check’ and so forth, with which the public ear has been deafened for a long while, are indeed sufficiently mournful. Dreary, stolid, dismal, without hope for this world or the next, is all that of the preventative check and the denial of the preventative check.”

However the full phrase “dismal science” first occurs in Carlyle’s 1849 tract entitled Occasional Discourse on the Negro Question, in which he was arguing for the reintroduction of slavery as a means to regulate the labor market in the West Indies:

“Not a ‘gay science,’ I should say, like some we have heard of; no, a dreary, desolate and, indeed, quite abject and distressing one; what we might call, by way of eminence, the dismal science”

Developing a deliberately paradoxical position, Carlyle argued that slavery was actually morally superior to the market forces of supply and demand promoted by economists, since, in his view, the freeing up of the labor market by the liberation of slaves had actually led to a moral and economic decline in the lives of the former slaves themselves.

Carlyle’s view was attacked by John Stuart Mill and other liberal economists.

So the next time you want to deride economists, please remember that it was an historian who coined the term while arguing in favor of slavery.