Everything has its price (1970)

From the July 1970 issue of the Socialist Standard

One fact which is made very clear by the operation of things like the welfare state, social aid agencies, criminal records, is that a capitalist state simply cannot function without some means of identifying people. There are of course simple ways of doing this— the policeman asks you your name and address—and there are more complex and refined methods, like matching fingerprints.

Another method, which has only recently come onto the scene, is by referring to speech patterns. This works on the theory that each person speaks to an individual style, has a personal vocabulary and uses some words and phrases persistently while others hardly at all. (Professional footballers on television seem quite unable to utter more than a couple of words without interjecting “y’know” but perhaps that is a social, rather than an individual, fashion.)

Now there is no reason to confine this method to the identification of people. If we apply it to society, it has its uses in telling us something about a social system. One word, for example, which is in constant use under capitalism is “market”. We hear about the Common Market, market economics, market research and so on. What does that tell us about capitalism ?

A market originally meant a gathering of people for the purpose of buying and selling goods. Time has rather modified this; a market need not now be a place where people gather but it is still, in some shape or form, a place where goods are sold. So one fact from capitalism’s constant use of the word is that it is a system of buying and selling where the dominating motive for production is profitable sale. It follows from this that everything must have a price and that there are laws and principles and procedures which operate to arrive at that price.

This may seem like labouring the obvious, were it not that there are unpleasant implications to the pricing of everything and that lots of people who think that capitalism and its market economy are examples of eternal sanity often find themselves protesting at the way the economy has to work. For example there is the case of Stewkley Church.

This is a church in Buckinghamshire with enough ancient material in it to justify the description 12th. century; in fact it is said to be among the finest Norman village churches in England. The mediaeval craftsmen who built the place, who knew nothing of modern technology or market research, were unwise enough to put it down in a place which may be needed for the third London Airport. If the airport is built at nearby Cublington, Stewkley Church will be destroyed.

The location of the airport is at present being considered by the Roskill Commission and one of their jobs is to put a price on each of the four possible sites. This price will be made up of the costs of such as new communication systems, the loss of agricultural land, the destruction of buildings. So it came about that, about six months ago, a firm of business consultants made what is called a cost-benefit analysis of Stewkley Church. The euphemism is itself enough to illuminate the function of the consultants. They costed the church at £51,000.

This figure, however represents only the fire insurance value and some local people don’t think this covers the situation. The chairman of Buckingham County Council has said that the three Norman arches in the church are worth, as works of art, about £1 million each. The secretary of the church preservation committee thinks it is impossible to put a value on the place; he probably agrees with the chairman of the group who are resisting the airport, who says “It is like trying to put a value on a summer’s day.”

In fact, capitalism does put a value on a summer’s day. And on a work of art. On a church. A social system which works by profit, whose wheels are lubricated by money, must put a price on everything. It bruises many sensitivities in the process, but capitalism can work in only one way. That is why vandalism is part of its history. Stewkley Church would not be the first bit of history to be trampled under in the march for profit.

Then there is the case of the judge’s life. A couple of months ago, a High Court action began, in which an American rubber company sued three other firms for alleged infringement of a patent on a production process. One judge heard the case for 30 days and then died before he could give judgement, which of course was not only inconvenient but also very costly.

The original hearing cost about £60,000 and the repeat, before another judge, was expected to come to about another £50,000. So all four of the companies united to take out a joint insurance policy on the life of the judge, for the estimated cost of the retrial.

One can imagine the judge—and judges are not notoriously slow to react to any slur on their dignity—fuming at the thought of a bunch of accountants coldly assessing the price of his life, even if it was rather higher than the price they put on the lives of most of their employees. But of course it was not the value of his life which was being insured—only the price it had in relation to the use the rubber companies were hoping to make of it. Or perhaps that only makes it more of an insult.

Yet insult or not, this is all perfectly natural under capitalism. Since the judge would hear the trial, and assess the rival cases, in terms of the system’s profit motive and the protection of property rights, he cannot logically complain (not that he probably wanted to) if some of the essential degradation of the system rubs off onto him.

The judge does not stand alone in this; the valuation of human life is commonplace. One impetus which has been given to this is in the building of new roads, which may make transport cheaper—and so bring more profit to the industries using them — and save some lives, but which also costs a lot of money. How to decide, then, between building a motorway or leaving the old road to carry on ?

One factor which counts in the decision is the price put one each human life which a new road may save—what is it worth? A recent (31 March) article in The Guardian said that the Ministry of Transport has fixed a value at £8,800; they are thinking about raising this figure to £9,800 because after all wages have gone up and there is the higher cost of training and replacing workers to be considered.

There are pressures for other ministries to join in this inhuman, unavoidable piece of calculation and for the whole thing to be tidied up in that thing beloved of the profit-conscious accountant—a standard code of costing. Professor Alan Williams of York University has done some calculations on this and has come up with the notion that ". . . every year of life is of the same intrinsic value to the community" although he hints at what he means by “community" when he adds “This sum will then be added to the economic benefits of providing various facilities" and that "certain weightings" could be applied to increase the price of people of "greater value to the community.” The same Guardian article says that a senior civil servant has actually suggested a figure to suit the "typical" man in England and Wales—£30,000, based on his potential earnings. The usefulness of all this research is that, if an agreed figure can be put on the worth of a human life to capitalism, the accountants and the cost benefit analysists and the planners would know where they stand when they are considering the economics of things like preventive medical services, new transport systems, industrial safety measures. In other words, the capitalist class would know, before they invested in a new road or a hospital, whether they were putting their money into saving lives which would bring them a return on their investment.

This may make the blood run cold yet it is all very necessary, and sensible, once we accept that capitalism must continue. Capitalism exists by profit; its wealth is made to be sold; under it everything must have its price and, as human beings provide an essential part of the productive process, they too must be costed and valued like nuts and bolts and raw material.

Too bad for anyone who comes out on the wrong side of the balance sheet and whose wellbeing, comfort or even whose life, may be written off as uneconomic. Too bad if something which might be worth keeping stands in the way of profitable progress. If capitalism is to be assessed and identified by its characteristics—by its market economy—then it is an inhuman, degrading system whose concern for human life and dignity is ever diminishing. There are plenty of other reasons for getting rid of capitalism, but that on its own is enough.

Ivan

The Price of a Life (1978)

From the May 1978 issue of the Socialist Standard

Anyone asked to think of a product of capitalist society that is designed to kill would probably think of armaments, in all their many forms. But if it were suggested that capitalism also produces quite ordinary products such as motor cars, deliberately calculating that they are going to kill a certain proportion of their users, most people would not believe it. But it happens to be true.

One thing most workers would agree on, though, is that everything has its price; work, play, necessities, luxuries, food, drink etc. — all have this in common. Although most workers don’t realise it, above all capitalism prices a worker’s labour-power; the price being of course, wages. But capitalism does not stop at pricing a man’s ability to work, it also prices human lives themselves. In a remarkable legal case in the USA the horrifying fact was revealed that the Ford Motor Company decided it was cheaper (more profitable) to kill and maim people than incorporate a small design change in one of their models; a design change which would only cost something between $9-11 for each model.

The full details of this story of capitalism’s gross inhumanity in the search for profits was revealed in a report of the case in The Sunday Times (12/2/78). The Ford Pinto is one of a number of smaller American cars. It appears that the fuel tank for this car was (and in the case of those cars already on the road, still is) placed right at the rear. This meant that if hit from behind, even quite gently (a common accident) there was a strong chance of the petrol tank buckling, the petrol spilling out and the car bursting into flames. Several reports in the 1970s had pointed this out, and Ford were well aware of the risk. The car in which 13-year-old Richard Grimshaw was travelling was involved in just such an accident. The vehicle was hit from behind, the petrol tank exploded, and the driver was burnt to death. Richard however was “lucky” — he survived. Now 52 operations later (with more still to come) and horribly scarred for life, he has won his court case against Ford.

The jury in the case awarded Richard $128 million (roughly £66 million), punitive damages. That is, they not only gave Richard compensation for the injuries he suffered; they also punished Ford, imposing specially heavy damages. They did this because it was shown that Ford had killed and maimed deliberately. The Californian jury were presented with some shocking evidence, the results of detective work undertaken by Richard’s lawyers. In order to obtain this huge sum of damages it was not sufficient to show that the car had a design fault. Ford knew all about this and anyway they had a defence — the car met all government safety standards at the time. (This would not have been sufficient to prevent Richard getting a more normal level of damages — the current rate against Ford in the USA for this sort of horrible injury seems to be between $500,000 and $1 million). But Richard’s lawyers discovered that not only were Ford aware of the potential hazard of the car, but that they deliberately calculated the cost involved in altering the design, and the cost involved in terms of personal suffering) if they did not alter the design.

Ford’s calculations were that approximately 180 deaths and 180 serious injuries a year would result from the faulty design (though some estimates put the figure nearer to 1800 deaths a year and one journal estimates the death rate at 5000 a year). They then worked out the likely “cost” of each death or injury. They did this by adding up such items as victims’ pain and suffering ($10,000) fatal burn injuries ($67,000) medical expenses, loss of future earnings etc. Based on these grisly figures (and not forgetting the costs of damage to the car!) Ford put the total benefit (“savings”) of a design change at slightly less than $50 million. Let The Sunday Times take up the story of how this particular capitalist enterprise calculated from there:

 The figure of $50 million was set against the costs— $11 million worth of modifications per Ford vehicle sold—of $137 million. That, Ford engineers observed, was almost three times greater than the benefits, even using a number of highly favourable benefit assumptions! They could not envisage any development which would make compliance . . . cost effective.

The further evidence that Richard’s lawyers were able to produce to support their claim for punitive damages came from — a “star witness”. This was H.F. Copp, a retired senior design engineer, who had worked with Ford for 20 years. (The fact that he had retired was rather important — otherwise presumably he would not have dared give evidence against Ford for fear of being unemployed for life). This is how the Sunday Times continues its report

  Copp had worked on Ford’s successful Capri range in which the petrol tank rode, saddle-style, above the back axle; he was certain this was the safest design. . . . What could a designer like him do, Richard’s lawyers asked, if “corporate management” specified the location of the petrol tank? “Follow corporate policy” Copp replied. Had Ford’s top management, in fact, issued a design directive for the Pinto’s tank? "Behind the rear axle, beneath the floor.” Could he estimate how much extra it would have cost to place the Pinto’s tank above the axle? “About $9 more per car."

So why didn’t Ford introduce the safer design that Copp (and others) advised? Quite simple really — a Ford engineer explained that in the “ferociously competitive small-car market” Ford had to be extremely price-conscious (price here referring to cars of course — not human lives). The car was governed by the 2000 limit: “. . . it was not to weigh more than 2000 pounds and not to cost more than $2000 . . .  An increase in production costs could price a compact car out of its market”.

So there are the simple economics; no frills, no attempts to hide it, no subtlety. Naked concern for sales means that the price of a human life is weighted in the scales against the price of a car; in this instance the human life is found to be the lighter.

Of course the very heavy damages awarded are little comfort to Richard. As poor Richard himself said after the case: “If I had a choice of whether to take this money and go through all those burns and stuff or just lead a normal life, then I’d lead a normal life”. The lesson for the world working class from this story is obvious. A society that coldly evaluates the cost of killing or maiming a human being (quite apart from the horrors of war) and decides that it is more profitable to do so than to spend a miserable $9-11 a car is no society for human beings at all; it is a society OF human beings FOR profits. If the tragedy of Richard Grimshaw and many others teaches this lesson, then perhaps his sufferings have not been totally in vain.

Ronnie Warrington

The Costing of The Earth (1994)

Book Review from the September 1994 issue of the Socialist Standard

Ecology, Policy and Politics: Human Well-Being and the Natural World. by John O'Neill (Routledge. £11.99.)

This book is an attack on the philosophical basis of so-called "cost-benefit" analysis as a method for deciding whether or not some project with consequences for the environment should go ahead. Cost-benefit analysis involves giving a monetary value to the costs (e.g. loss of amenities, destruction of wildlife habitats, pollution) and benefits (e.g. some new amenity, more jobs, journey times saved).

What price the market?

The value of a landscape or habitat is calculated as what people would be prepared to pay, either directly or in terms of monetary benefits forgone, to retain it. If, in the end, the monetary value of all the benefits is greater than the monetary value of all the costs, then the project should go ahead. This in fact is how such decisions are made today.

O'Neill argues that such a method does not protect the environment as it takes people's preferences as they have been shaped by capitalism which encourages us to judge everything in terms of how much money it brings or saves us as individuals. Given this, cost-benefit analysis will always reflect the fact that most people prefer to have more money over all other considerations and often have no real choice in the matter. Much of O'Neill's book is written in the technical language of moral philosophy and so will be of interest mainly to students studying that subject. A couple of chapters, however, in respectively, "pluralism, incommensurability, judgement: (Chapter 7) and "market, household and politics" (Chapter 10), will be of wider interest.

In the first of these O'Neill argues that cost-benefit analysis is misconceived in seeking to reduce everything to a single common unit (monetary value). The anti-socialist von Mises even argued that, unless everything had a price tag, it would be impossible to make a rational choice between two alternative projects or methods of production. O'Neill replies that this is nonsense: comparisons and choices can be made on the basis of other considerations than monetary costs, as had been pointed out by the Austrian Marxist (and later logical positivist philosopher) Otto Neurath: 

"For Neurath, a socialist economy, since it was to consider the use-value of goods only, would have to be an 'economy in kind'. In such an economy, while physical statistics about energy use, material use and so on would be required, there would be no need for a single unit of comparison. Thus in 1919 he wrote in a report to the Munich Workers' Council that, in considering alternative projects: 'There are no units that can be used as the basis of a decision, neither units of money nor hours of work. One must directly judge the desirability of the two possibilities.' Such direct comparison will need to appeal to political and ethical judgements, including concern for future generations."

making informed practical judgements on the basis of past experience and general policy considerations will no doubt be what will happen in socialism. Money won't come into it, nor the insane attempt to put a price tag on everything.

In the other, final chapter, O'Neill discusses two alternative ways that have been suggested for making decisions about the environment on a non-market, non-monetary basis. The first is to restrict the operation of the market to a defined sphere, not including environmental matters. The other is to abolish the market altogether. O'Neill opts for the second, rejecting the first on the following grounds:

"within the economic sphere itself to leave the allocation of most resources to the market is incompatible with the realization of environmental goals. The market responds only yo those preferences that can be articulated through acts of buying and selling. Hence the interests of the inarticulate, both those who are contingently so - the poor - and those who are necessarily so - future generations and non-humans - cannot be adequately represented. Moreover, a competitive market economy is necessarily oriented towards growth of capital, and such an orientation is incompatible with a sustainable economy."

In other words, what O'Neill calls a "non-market order" is the only framework within which humans can organize their interaction with the rest of nature in ecologically acceptable ways.

Adam Buick