Discounting life.

• Author: Heinzerling, Lisa
• Position: Response to article by John J. Donohue, III in this issue, p. 1901

Many of the deaths prevented by environmental law are deaths that would have occurred many years hence. This is usually because the disease that would have killed people has a long latency period, or because the people exposed to the regulated hazard did not even exist at the time regulation was imposed. How do these future deaths compare to deaths that occur today? I believe that the resolution of this question depends on our moral commitments to each other's future selves and to future people. It does not turn on financial rates of return, and resort to such figures will obscure rather than illuminate the relevant concerns.

In defending discounting as a means of choosing between present and future life, John Donohue elides the moral issues inherent in discounting by making two assumptions. First, he says, discounting does not devalue future life relative to present life (p. 1906).(1) Second, he believes that there is no difference between discounting money and discounting life (p. 1905). These assumptions are mistaken.

Donohue asserts that discounting in the context of lifesaving regulation is not about valuing future life less than present life, but about the productive capacity of money over time: "[I]f invested, our resources are expected to grow at [the current rate of interest], so that if we forgo spending and invest the money instead, we can save more lives in the future with the amount foregone today" (p. 1905). In his example, we might spend $40 million today to save ten lives seven years from now, or we could invest the $40 million at an interest rate of ten percent and thus have $80 million in seven years, which would enable us to save more than the ten lives we could save today (p. 1905). This assumes that the cost of saving lives increases at a rate lower than the discount rate--a dubious premise that Donohue does not acknowledge, let alone defend.

But just think: If, seven years from now, we invest the money again rather than spend it on lifesaving, in another seven years we will have accumulated $160 million and can then save even more lives. If we then wait another seven years to spend the money, we will have $320 million. And so on. Donohue does not tell us how to decide when to stop investing and when to start saving lives. If his analysis is accepted, we will keep our money in the bank forever.

Others have concluded that the only way out of this spiral is to value future lives less than present ones.(2) They have recognized what Donohue does not: Discounting lives is all about the relative worth of lives today versus lives tomorrow.(3) It is puzzling, then, that Donohue insists that "no one suggests that lives should be discounted in the popular meaning of that term--devalued or disregarded" (p. 1908). This claim is all the more confusing given his belief in the equivalence of money and life. Money is discounted precisely because tomorrow's dollar is worth less than today's. If life is equivalent to money, its value also must decline with time.(4)

This brings us to Donohue's second premise, that...