The Heterodox Liberal

Friday, January 13, 2006

Money is not the same as Humanity

The pathologies of the right are truly astounding, and apparently they start young. In the most recent Harvard Magazine,* there's an article by a non-rich undergraduate recounting his experiences on the "Dorm Crew." It's worth reading all on its own, but there's one real stunner of a quote which is both horrifying, and, yet, not at all surprising.

The gap between what I know and what they take for granted catches me by surprise, and their frame of mind entirely astonishes me. In my section for Moral Reasoning 22, “Justice,” we were talking one day about city workers who do dangerous construction below ground. Someone suggested that such dangerous jobs should get higher pay, but—because people need those jobs to get by—the wage stays unfairly low. “I dunno,” said a guy across from me. “There are other jobs that are really risky. Like hedge-fund managers.”


My god. And yet... and yet... the same august institution recently "lost" (hopefully with no regrets) a professor who has spent years arguing that the idiot student who thinks that hedge fund managers incur just as much risk as coal miners is actually correct. W. Kip Viscusi, best known for his work as paid expert witness (read: intellectual whore) for the tobacco industry in their attempts to claim that smokers know what they're getting into and don't really mind a horrible early death after all.

[interlude: apt pull-quote from the above:]
"Why would any scientist in his right mind choose to base his entire theory on a survey cooked up by a tobacco-industry law firm?" asks Stanton A. Glantz, a professor of medicine at the University of California at San Francisco. "In my mind, I put Viscusi in this sort of cabal of academics who make a good living off of tobacco money."
Kip "Bennett LeBow" Viscusi also is known for his "research" on something called the "hedonic value of life." The previously linked article sums it up:
His dissertation argued that workers implicitly demand a wage premium for jobs with a high risk of death or injury. That phenomenon was noted by Adam Smith as early as 1776, but Mr. Viscusi tried to advance the theory by measuring the precise size of the premium. He concluded that for each one-in-10,000 annual chance of dying on the job, workers tend to demand an extra $400 a year.

Mr. Viscusi concluded his dissertation with what turned out to be a hugely influential suggestion. If workers make such a wage demand, he argued, then they're acting as if their lives were each worth $4-million -- a calculation similar to those made by insurers in pricing their coverage. Therefore the government should consider $4-million to be the statistical value of a life -- that is, for example, when the Environmental Protection Agency debates whether a given regulation is cost-effective, the answer is yes if the regulation will save at least one life per $4-million of cost.
You can see the evil implications of this approach already. It becomes "efficient" to impose X risk on someone, if you pay them Y miniscule amount of money for it. Tort damages get capped. And the bizarre claims of the undergraduate who says that being a hedge fund manager is as risky as being in a job where you put life and limb on the line are academically validated. Because, hey, life is only worth 4 million bucks, so if a hedge fund manager gambles with more than that...

Anyone with an IQ over 30 (which does not, apparently, include Mr. Viscusi) can see the ferocious and atavistic class bias in this analysis, of course. Bill Gates will not take a life-threatening risk for 4 million bucks, and someone in the upper-middle class is much less likely to take a .0001 risk for 400 bucks than someone who lives in public housing in South-Central L.A. (This, of course, assumes that either risk-taker knows the risks and have any hope of quantifying them -- an assumption which is patently false.) Also, Viscusi is apparently too stupid to see that some classes have a broader range of non-dangerous jobs available to them than others. It gets worse. He goes so far as to argue that people in other countries, because they make less, have lives that "statistically" are less valuable. (Glory quote: "Cigarette smokers and people who don't use seat belts in their automobiles work on risky jobs for less per expected injury than do people who don't smoke and use seat belts in their automobiles." Gee, Kip, obviously these people are making a rational choice to avoid the zero cost of using a seat belt and accept the risk that goes with it. It can't be that you're just tracking stupid people, eh?)

It's this kind of warped thinking that deranges the minds of the young to the point that they can be gotten to believe that, yes, hedge fund managers have risky jobs. People like Viscusi should be laughed out of the public sphere.


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* Coincidentally, in the same issue, there's a wonderful, wonderful article from Elizabeth Warren about the economic risks of the average family. Warren, of course, is the Harvard Law School professor who has emerged as the strongest voice against the savage abuses of, e.g., the credit card companies and their corrupt bankruptcy bill.**

** Huh. I've moved from sex to Harvard. This blog is starting to look like some Tom Wolfe novel.

2 Comments:

  • Awesome post!

    It's very difficult for those that come from loving/affluent families to realize their advantages and priviledges.

    It's also important to point out the same people are extremely dismissive about lives of those that, while less affluent, are the backs on which society and affluent lives function upon.

    By Blogger Cattygurl, at 6:47 PM  

  • This guy is a living reductio ad absurdum for rational choice theory.

    By Blogger djw, at 4:12 PM  

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