Sticker Shock - What is Life Really Worth - Pravin Mahajan

Sticker ShockWhat is Life Really Worth?

Pravin Mahajan

If a human life is a financial asset• World GDP = $72 Trillion• Population = 7 Billion (labor force = 3.3 Billion)• Each human produces= $21,818 per year• Assuming productive life = 40 years• Lifetime value of a human = $872,720

• Average Joe in US = That seems low.• Average John in Africa = Wow! That’s a lot.

There’s a slight wrinkle though…• World Debt = $72 Trillion• Population = 7 Billion • Each human owes = $10,285 (at a point in time)• This reduces the lifetime value of the human

• Another report put World Debt at $223 Trillion

More numbers…In theory, value of human life is pricelessIn reality,• $50,000 Most insurance plans to cover a new medical

procedure (aka one year quality of life)• $129,000 Stanford study on kidney dialysis benchmark• $500,000 Average death benefit paid to US veteran• $9.1 million EPA estimate

IPCC estimates developed world is 15x developing world• $7.9 million FDA estimate• $6 million Transportation Department

A billionaire insured for $200 million?

Or has the guy who sold the policy just sold ice

to an eskimo?

Calculate your life value atwww.lifehappens.org

How is “worth” measured economically?

Financial Asset

GoodService

Money

Credit

Transaction

∑ Transactions = Economy

The conventional notion of value is $

If a person’s worth is ever-changing,where is it headed?

R > G Thomas Piketty

R = Rate of Return on CapitalG = Income/GDP Growth (Labor proxy)

Demolishing the economic shibboleths

Economics has become the imperial science

Too much emphasis on its Math-driven might defeating other branches of Science

Economics needs to be more real-world, and not just qualitative theorems masking as hard-science.

MidWestern University

Valuing nature (and non-human life)

Zaglossus Attenboroughi

The paradox of value

Nothing is more useful than water: but it will purchase scarcely anything; scarcely

anything can be had in exchange for it. A diamond, on the

contrary, has scarcely any use-value; but a very great quantity of other goods may frequently

be had in exchange for it.

Valuing nature

The rise of ‘Natural Capital’ valuation

Puma counts 3 types of Profit and Loss Accounts (P&L) from 20101. Economic P&L2. Social P&L3. Environmental P&L

Nature has 2 sorts of value

1. Use valueE.g. $29 billion contributed to US economy by bees in 2010

2. Non-use valueE.g. Afghanistan’s Bamiyan Buddhas whose destruction by the Taliban was mourned around the planet

So, what about the Zaglossus Attenboroughi?

• It has no Use value– Well, maybe as a snack

• It has no Non-Use value– Won’t do well in surveys asking people its

value; they always choose charismatic beasts (Lions, African elephants)

• It is only of great ‘Scientific Interest’

Conservationist sentimentalism

• Unspoken assumption that the current state of natural world is the desirable standard

• However it is the nature of Nature to change and evolve…and species to go extinct

• That is called “life”

Back to the human life, what if our worth is beyond the economic?

Some things are not just reducible to money.

It is not that life has infinite monetary value. It is that life cannot be sensibly exchanged for money.

What would you accept as a compensation for 5 years of the most severe form of torture (non fatal)?

From mullet to genius

Surely, Jason is worth more now (and not just in $$)

There are no perfect circles in nature!

So how would I value myself?Moments not just metrics

42

Questions, Kvetches, Irrational Exuberance,

Uncomfortable Excitement?

pravinmahajan@yahoo.com

Further random thoughts• Robots could be basis of a new slave-based economy…does

the value of a human go down? Will it be a new Athens or the antebellum South?

• Moore’s Law for Genetics…Cloning Technology…Movie ‘The Island’

• What is you could swap your body for someone else? http://www.bbc.com/future/story/20140427-i-swapped-bodies-with-someone