On Friday evening I heard Kenneth Feinberg talk. The administrator of the funds that included the victims of 9/11, the Boston Marathon and the BP oil spill, Feinberg was involved with placing a price on a life. As he explained, the grief, the tragedy, the horror of the catastrophes could not be offset in any way by a payment that was fair or just. Instead, it was about a government or charitable group or a corporate entity displaying mercy.
How to show mercy? With a check.
So, if Mother Teresa and Bernie Madoff had each perished from a catastrophe like 9/11, whose family would have received the bigger check?
Where are we going? To the value of a life.
Created by the U.S. Congress, the September 11 Victim Compensation Fund of 2001 provided tax free compensation for those who had been injured and for the families of the deceased. More than $7 billion was divided among 5,562 people. Because the law said that compensation would depend on financial hardship, salaries helped to determine who got what. Or, we could say that different lives got different prices.
From Kenneth Feinberg’s book, I copied (below) some of the compensation given to survivors of the deceased.
Our Bottom Line: Safety Regulation
Most safety legislation quantifies the value of a life.
A 13 MPH speed limit would have prevented many of 2013’s 32,850 traffic fatalities. We could say the higher the speed limit the cheaper the life. Below, on a production possibilities graph, you can see a time/life tradeoff. The more time saved from a high speed limit, the fewer lives we save.
Similarly, regulators decided against using car seats on planes for babies when they compared the number of lives that would be saved to the amount that would be spent for the car seats and fares if lap babies were not permitted. Saying it would cost $3.25 billion to save one life, they decided against the mandate. In other words, for $3.25 billion they would sacrifice a life.
And that returns us to Mother Teresa and Bernie Madoff. Selecting our criteria, we do decide what a life is worth.