Elsewhere I have made substantive arguments for why we are better off without putting monetary values on our lives, but I won’t get into that here. My interest at the moment is the incomprehension on all sides of the VSL debate.
Here’s what I think it comes down to: the metaphor of choice. This metaphor is so deeply ingrained in economic analysis most economists can’t think beyond it, but the moment it is invoked the very notion of what it means to be alive rather than dead is rendered irrelevant.
No need to reinvent the wheel. I discussed the metaphor of choice in my introductory micro text:
What about the metaphors used in economics? First consider choice. Much of what we do in the economy does involve choosing: we choose where to work, where to live, and paper or plastic in the check-out line. No doubt many of the choices we make are unconscious, but it might not be too far off the mark to think about them as if they were conscious and “rational” as we will describe in the following section. Nevertheless, the metaphor of choice can be misleading in some instances. There are two reasons for this.
First, many of the actions we undertake are governed by a process very different from conscious choice....
Second, many activities are not choices at all. You can choose whether to buy white or red potatoes, but cooking the potatoes is an act of (household) production, not a choice. Working, doing the actual tasks that make up a job, is not choosing; it is working. Spending days or weeks searching for a new house is not making a choice; it’s doing a search. Of course, subject to the qualification we made in the previous paragraph, all these activities lead up to or follow from a choice. In other words, what the metaphor of choice is telling us is that what is deemed important about any economic activity is the element of choice connected to it. This is a simplification of great power, because it enables us to make general statements that apply to the many aspects of life through their common element of choice, but it downplays the economic importance of the non-choice element.This applies in flashing neon to the valuation of life. To an economist, it is obvious that the salient moment, the one that determines everything else, is when you make a choice about something that increases or decreases the probability of an early death. The tradeoffs you make in that moment, or that are implicit in it and could be teased out using statistical methods, are the very substance of value. When a normal person—someone who hasn’t been trained to view existence as nothing more than a sequence of instantaneous choices—thinks about life, however, they think about living (and dying). What’s the value of that? It might have something to do with the attitude you felt when you were making a choice that changed your odds of survival, but that barely begins to cover it. The value that matters is the value of being, to you and to those who know and care about you.
What’s the lesson here? It’s not that economists are “wrong” to reduce all of being and doing to choosing; there is great power in this simplification, and few insights of modern economics would be attainable without it. But economists would do well to remember this crucial step and acknowledge it limits the scope and applicability of what they think they know. Allowing that there are values to being alive that VSL doesn’t begin to address would be a useful place to start.