UPDATED 7-28

PRI ran a story on the global asbestos trade that is worth the read – it is a story that runs parallel to that of DDT, long-banned in the US, but still in common use elsewhere.  The DDT issue is quite contentious today, as there are many who argue that removing it from use would do more harm than good, as the number of people impacted by a rise in the mosquito population might be greater than the number of people impacted by contact with DDT.  What I find interesting about this argument, though, is that practically nobody who makes that argument suggests we should start spraying it here in the US again.  This logical inconsistency, I think, has its roots in the differential valuation of human life that operates under a lot of economic assessments of development policy.

The article on asbestos hints at this logic when it quotes John Hoskins, a scientist with The Crysotile Institute (a pro-asbestos organization).  Hoskins

believes that the health dangers are negligible. In fact, he told the CPI that “the people who would like to ban chrysotile asbestos are actually committing economic damage” especially to people in the developing world.

In other words, the cost of other insulators is so much higher that it offsets the cost in human health and mortality incurred by its use.  This, implicitly, raises the question of what a human life is worth – and implicitly suggests that we can ascribe an economic value to that life.  Of course, we do this all the time here in the US – courts routinely decide how much money to award those who have lost loved ones through negligence or other acts, in part making an assessment of what the lost life was worth.  However, when we start talking about using materials in the developing world that we would not dream of using here in the US (i.e. asbestos and DDT), we are implicitly suggesting that human lives here have greater value – for under the logic that not using these products in the developing world is more costly than using them and paying the human cost, if we are not using them here it must mean that the human cost is higher here, thus making these products unacceptable.  Suddenly, we have an economic argument for valuing the lives of the global poor less than our own . . . and we have done so in a manner that seems apolitical and logical.

Larry Summers laid this logic bare back when he was working as the Chief Economist at the World Bank.  In 1991 he wrote (or one of his staff wrote, depending on who you believe) a memo about the location of polluting industries and the value of human life.  It is worth quoting at length:

DATE: December 12, 1991
TO: Distribution
FR: Lawrence H. Summers
Subject: GEP

‘Dirty’ Industries: Just between you and me, shouldn’t the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Least Developed Countries]? I can think of three reasons:

1) The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.

2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I’ve always thought that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.

3) The demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity. The concern over an agent that causes a one in a million change in the odds of prostrate[sic] cancer is obviously going to be much higher in a country where people survive to get prostrate[sic] cancer than in a country where under 5 mortality is 200 per thousand. Also, much of the concern over industrial atmosphere discharge is about visibility impairing particulates. These discharges may have very little direct health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare enhancing. While production is mobile the consumption of pretty air is a non-tradable.

The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization.

Now, this memo has been the subject of a lot of controversy, with some arguing that Summers was effectively a sociopath masking his tendencies in the language of economics.  And on first read, way back when I was in grad school, I had a similar thought.  However, many years down the road, and having seen Summers intentionally provoke controversy time and again (such that he managed to get sacked from Harvard), I have little doubt that Summers wrote (or signed) this with any other intent than to provoke the economists at the Bank who were making less obvious, but equally egregious, assessments of the impacts of structural adjustment.  I mean, honestly, do you really think a man like Summers would ever have WRITTEN THIS DOWN if he meant it?  It screams “leak me!”  He’s not that dumb – he wanted to provoke, and he might have wanted the leak so as to publicly embarrass some of these economists.  Sadly, most people seem to have missed the point.

Salient to this post – Summers is making the same argument about pollution and development, via sarcasm, that I am making about asbestos (and DDT).  If someone is going to suggest that people elsewhere should “be allowed” to use materials that we have banned here for reasons of public health, then they should also have to address the implicit valuation of human life that makes such a political statement appear “logical” and apolitical.

Now to see if the folks at Environmental Economics let me have it over this . . . they are, after all, real economists.

UPDATE: They did not let me have it – and I am almost disappointed.  But I think John ended up agreeing with me that we are indeed valuing human lives differentially in the “developed” and “developing” worlds – further demonstrating Nullius in Verba’s point (in the comments below) that we run into problems when we start using “universal” measures like money in realms where the moral is pretty important.