Priceless: On Knowing the Price of Everything and the Value of Nothing

Frank Ackerman and Lisa Heinzerling's book Priceless takes a critical look at the economic method of cost-benefit analysis which is often used to direct policy and behavioral decisions regarding health, the environment and social values. The authors' primary conclusion is that such analysis is often far too opaque to be relevant. Additionally, most cost-benefit analysis is unreflective of the true values of human health, life, ecosystems and other `priceless' elements these methodologies often deal with. It's argued that using cost-benefit analysis too often leads to sub-optimal and unjust outcomes. These outcomes are rationalized only by an academic exercise where everything is deduced to monetary terms. The book does an excellent job presenting current-day policy decisions and breaking down the assumptions and arguments that led to their adoption. In doing so, Ackerman and Heinzerling show that the `pro-free market' mantra championed by business interests, and gaining popularity in some political circles, is proclaimed a success on the grounds of cost-benefit conclusions. However, the authors dig deeper to examine the questionable methods which seemingly prove that the market creates efficient outcomes and that regulation is often only a costly hindrance. Additionally, Priceless invites readers to consider injustices imposed historically, and in the current-day free market, in the absence of regulation and laws restricting certain activities. Slavery, child labor and toxic pollution are just three examples used in the book where free market efficiency is questioned. Seemingly, "anything profitable that is not prohibited by law is likely to occur" in a free market scenario. Free market efficiency dictates that labor is first directed to produce the most fiscally profitable goods regardless of what's socially optimal or needed. This is one serious danger of relying purely on monetary terms and profit-maximizing behavior to make choices. Similarly, cost-benefit analysis falls into the same trap. Things which are seemingly priceless, such as human life, are given a monetary value to determine whether endangering activities are prudent and/or have the right to occur. Furthermore, the costs and benefits of action are often calculated using questionable methodologies which can be manipulated to justify decisions based on the analyst's preference. One poignant example provided was the federal government's Office of Management and Budget's (OMB's) 2002 estimate that the value of protecting 60 million acres of forest land was a mere $219,000/year. This value was calculated solely by using the cost saved from not building roads in the area and not needing to provide for their ongoing maintenance. Any environmental benefits of the forest's ecosystem and the value it served as a home to plant and animal species were completely ignored. Also disregarded were the future values society might derive from its existence. In terms of cost, th

I think Heinzerling and Ackerman show within their very first chapter that they are totally "on" to the tricks of the "C/B/A" Dick Graham policynakers of our day, that they have a powerful critique of and rebuttal to that technique, and a talent for putting forth some very good, easily-understood examples that enable anyone with interest in the subject and a decent amount of common sense to figure out the great (hmm) game being played "out there." I hate economics jargon, but i really liked this book.

Although sometimes threatened by dry matters of obscure economics, here Ackerman and Heinzerling manage to keep their intriguing moral arguments in full view. The authors convincingly condemn the cost-benefit analysis that has become fashionable for the current administration, and corporations, when evaluating public health and environmental regulations. Such economic practices have resulted in embarrassing, and frankly inhuman, corporate decision making – the most famous example being the case of the Ford Pinto in which the company decided not to fix a minor defect in design because the lives of the people who could potentially be killed were (economically) worth less than the up-front costs. This type of heartless economic analysis is now being used by the Bush administration, and especially the imperious Office of Management and Budget, to "evaluate" all existing and proposed regulations, particularly any advanced by the EPA or other politically targeted agencies. Hence, all regulations are subjected to purely economic cost-benefit accounting. Tellingly, military spending is inherently "inefficient" by this standard, but has never been subjected to such statistical determinism. Ackerman and Heinzerling convincingly demonstrate that this accounting is heavily politicized, with the costs of health or environmental regulations vastly overestimated, and the benefits to society vastly underestimated. This is often because matters of life quality and morality, which are essentially "priceless," tend to be given zero value in these purely accounting-oriented analyses. And in all cases, arcane and shifty accounting methods can further push the results of the cost-benefit analysis in the direction desired by the politicos who are crunching the numbers. The authors tend to shy away from the obvious conclusion that such supposedly impartial economic "science" is really a cover for politicians and corporations to advance their harsh anti-regulatory agenda and ideology. However, they still do a marvelous job of pointing out not just the errors of such accounting methods (via many real-life examples), but also in showing that supposedly "impartial" economics are advanced for immoral, unjust, and even anti-human ends. As Ackerman and Heinzerling conclude, true economic and environmental justice requires holistic thinking about the state of the real world, not atomistic politics. You can't put a numerical price on everything, especially human life and public health. [~doomsdayer520~]

If someone tells you that a regulation will cost $100 million but produce only $50 million in benefits, you'd probably think it was a good example of government bureaucrats running amok. But what if you then found out that what the regulation would really do was force polluters to cut emissions in order to prevent thousands of cases of life-threatening illness over the next three decades? And that the $50 million benefits "pricetag" was developed by a bunch of green-eyeshade types who regard each life as worth about $3 million, and who then use a statistical trick to make 87% of that value disappear? Ackerman and Heinzerling have written a brilliant and scary book that lays out in chilling detail just how widely such techniques are now being used in making decisions about when to adopt health and environmental safeguards - and when NOT to. They also reveal that many of the horror stories repeatedly trotted out by critics of environmental and health standards NEVER ACTUALLY HAPPENED. The authors' prose is engaging and their arguments are compelling. Essential reading for anyone who cares about health and the environment - and who thinks that industry shouldn't be blindly trusted to do the right thing in safeguarding them.

This book will truly open your eyes. This book presents a rare chance to peak behind the curtain and see how our government goes about making life and death decisions.