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The Value of A Human Life
The first time I
wrestled with the problem of putting a dollar value on a human life
was as an expert witness in a court case. An 11-year-old boy
had had his intestines sucked out of him by a faulty valve in a city
swimming pool. Miraculously, he had survived. He would
need to receive total parenteral feeding through as tube in his neck
for the rest of his life, but he was likely to enjoy a normal life
expectancy since his "diet" was healthier than that of most people,
he was otherwise fine, and he was intelligent about his fate.
The city's insurance company had offered $1 million for the care and
feeding of the boy. I estimated the cost to be $11 million.
The case was settled — literally on the courthouse steps — for $11
million while I was waiting, airplane ticket in hand, for a summons
to testify.
Admittedly, I had focused on the cost of a human life in this case.
What if they had asked me to estimate the value of the boy's life?
This is a much more difficult task, and it goes to the core of our
value system and our sense of fairness. Grief is not proportional
to income. And if, indeed, "… all men [people] are created equal …
and … endowed by their Creator with certain inalienable rights, and
that among these rights are life …," then we ponder if we are all
equal in life.
Every day, doctors and nurses undertake the extraordinarily challenging task of
performing a bedside benefit / cost analysis of the value of a human
life that may be in extreme danger. The decision to give or
withhold treatment in the absence of a patient's known wishes and
the consideration of a loving family, forces caregivers to face this
problem head on. So let's take a look at what the dismal science of
economics may teach us about the value of a human life.
The per capita income of the U.S. today is about $40,000.00. The
equivalent capital amount, invested at 4 percent interest, would
have to be $1 million in order to produce a revenue stream equal in
value to the average human being generating this income. Human
capital theory thus offers this answer: The average American is
worth $1 million.
On May 14, 1896, Senator Knute Nelson of Minnesota gave a speech in the
U.S. Senate. The issue was about whether more restrictions should
be placed on immigration to the U.S., given that before 1890, there
were virtually none. As a part of that speech, Senator Nelson
reviewed the capital value immigrants brought to the nation.
Estimates at that time ranged from $200 to $1,200, plus an
additional $50 average cash-in-hand upon arrival in the U.S. The
nominal GDP per capita in 1896 was $216, so an equivalent capital
value of an average American that year was $5,400, using the same
reasoning that was used to estimate that an American life today is
worth $1 million. But of the 71 million U.S. population at that
time, 41% were either foreign-born or had at least one parent who
was foreign-born. Then, as now, immigrants supplied labor for tasks
that lifted the rest of the population into jobs that paid higher
wages. In light of the facts, it seems far-fetched to value their
contributions as low as $200 per immigrant — or even at $1,200, for
that matter.
The point is that immigrants have always been valued as net positive assets in
the studies that have been made of their total
contribution to a society. The very fact that they are here usually
indicates that they are motivated, decisive and entrepreneurial.
Indeed, school records from their home countries usually bear this
out. The fact that they bring new perspectives and different
cultural preferences to their new country ensures that Minnesota
will not be stuck with lutefisk and sauerkraut as its favorite
foods. The fact that it is initially costly to support immigrants'
children with education and health care ignores the simple fact that
these expenses are investments in human lives —
investments that will pay off handsomely in the years to come.
The U.S. population is projected to shrink dramatically this coming century
if fertility and immigration rates stay at the current level. Eventually,
today's 4:1 ratio of workers to the retirees whom they
support, will shrink to 1:1. Against this, we have only two
principal counter-strategies:
1.Increase productivity so that the one worker in the future is
paid, and contributes, as much as the four workers of today;
or
2.Increase our rate of immigration.
Otherwise, the next few generations may be poorer that the baby-boomer generation,
and we shall have to make dramatic — and probably unwanted —
adjustments to Social Security and health care.
Edward Young, Chief of the Bureau of Statistics in 1896, submitted his estimate of
the value of an immigrant to the United States:
From the foregoing
considerations, therefore, the sum of $800 seems to be the full average capital
value of each immigrant. At this rate, those who landed upon our shores
during the year just closed added upward of $285,000,000 to our national wealth,
while during the last half century the increment from this source exceeds
$6,243,880,800. It is impossible to make an intelligent estimate of the value to the country of those
foreign-born citizens who brought their educated minds,
their cultivated tastes, their skill in the arts, and
their inventive genius. In almost every walk of life
their influence has been felt.
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Alike in the fearful ordeal of war and in the
pursuits of peace, in our legislative halls, and in
the various learned professions, the adopted sons of
America have attained eminence. Among the many who
rendered timely aid to our country during the late
war, it may seem invidious to mention a single name,
except for the purpose of illustration. In the
year 1839 there arrived at the port of New York, in
the steamship British Queen, which sailed from the
port of London, a Swedish immigrant, better known as
Capt. John Ericsson. What was his value to the
country, as estimated on the 9th
day of March, 1863? Was it eight hundred, eight
thousand, or eight million dollars?
On that day, the ironclad Monitor, designed by Captain John
Ericsson, met the Merrimac. They met in decisive
battle — the Monitor to safeguard the ships that were
blockading the Confederacy, the Merrimac to break
the blockade. England, France and Spain had signaled
that their support would be switched to the Confederacy
if the Union could not maintain the blockade's integrity
and the war's momentum.
Captain Ericsson had already made naval history by
inventing the screw propeller. He put his talents as an
innovator and naval officer to work for his adopted
country at the point when her fate was being decided,
and became one of the most important figures of the
Civil War.
So, what was his life worth when he entered the U.S. in
1839? $800? $8,000? $8,000,000?
And what is the true value for the lives of all the other
immigrants who were to follow? Here is a very short
list:
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Albert Einstein |
Elizabeth Taylor |
Carlos Santana |
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Wolfgang Puck |
Peter Jennings |
Sammy Sosa |
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Mikhail
Baryshnikov |
Andrew Grove |
John Kenneth
Galbraith |
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Peter F. Drucker |
André Previn |
Zubin Mehta |
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Oscar de la
Renta |
Itzak Perlman |
Ann Margret |
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Knut Rockne |
Mike Nichols |
Bob Hope |
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Isabel Allende |
Ricardo
Montalban |
Gloria Estefan |
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Liz Claiborne |
Madeline
Albright |
Placido Domingo |
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John
Shalikashvili |
Elie Wiesel |
Elizabeth Kubler-Ross |
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Cesar Pelli |
Hans Bethe |
Billy Wilder |
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Irving Berlin |
Al Jolson |
Henry Kissinger |
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Frank Capra |
Anthony Quinn |
Rupert Murdoch |
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Jennifer
Granholm |
Wayne Gretzky |
Patrick Ewing |
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Alexander
Solzenitsyn |
Isaac Stern |
Esa Pekka
Salonen |
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Werner von Braun |
Michael Fox |
Arnold
Schwartzenegger |
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Cary Grant |
Greta Garbo |
Ole Rolvaag |
I
am an immigrant to this country. I look at the list of
names in the above, and I am humbled by the
contributions they made to their adopted country. There
must have been something about the United States that
lifted their spirits and unleashed achievements beyond
every reasonable expectation.
Moving to another country creates a kind of immigrant
energy — a drive to accomplish and excel. When a new
culture, new customs and new ways surround you, effort
is required of you that natives need not exert.
But there is something else as well.
If
you live in the U.S., you can select the best from a
hundred different cultures, and live a life you could
never have lived in any other country.
That is the power of diversity. That is
the promise of America.
Even if you can't read or write, even if you are poor
and very new to this country, you can feel
this promise. It is embedded in the Declaration of
Independence. We live and breathe what it says:
We hold these truths to be
self-evident, that all men are created equal, that they
are endowed by their Creator with certain unalienable
Rights, that among these are Life, Liberty and the
pursuit of Happiness.
These stirring words may not be the reason why all those
immigrants came.
But it well may be the reason why they stayed.
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