Yesterday Americans were stunned by explosions in Boston that killed at least three and wounded dozens more. It goes without saying that my sympathies are with the victims and their families. I wish the survivors a speedy recovery and give my condolences to the families of the lost.
At this time law enforcement and government officials are scrambling to determine what happened and who is responsible. Soon enough politicians will turn their minds to what can be done to prevent such a catastrophe from happening again. I'm not going to offer any opinions on this most recent tragedy. The wound for many is still too fresh to be a safe topic. Instead I want to touch upon terrorism (or any other similar preventable event) and why I feel that as a nation we handle it poorly.
Economists are often asked to quantify things, such as the value of a human life, that seem to defy measurement. Many people react to such a notion with horror. Life is sacred and can't be reduced to a simple number on a sheet of paper. Trying to transform a person into a dollar amount is objectification at it's worst. And maybe they're right.
However, here are some numbers that maybe show why I believe such analysis is important.
In 2012 the Transportation Security Administration had a budget of approximately $7.5 billion. Very nearly all of that was spent to make sure people didn't die in airplanes. Before the creation of the TSA, approximately one hundred people died annually due to commercial plane crashes in the United States. Actual numbers vary quite a bit but one hundred per year is a good average for the 90's. Since then that number has dropped rather significantly. There is a compelling case to be made that this reduction in fatalities is due to technological improvements rather than the TSA, but for now we'll assume that the TSA is saving approximately a hundred lives per year. That's $75 million dollars per life saved.
That's a college education at a state university for almost eight thousand students per life.
That's enough to essentially eliminate hunger in America. source
That's enough to provide blood pressure medication to one hundred twenty five thousand at risk adults per life (at $600 for medication annually).
It's hard to imagine that any of these three alternatives wouldn't save more lives than the TSA does annually. Yet in the wake of the September 11th tragedy we created a large government organization that will very likely be a drain on our resources for decades to come.
The fact is it's impossible to prevent every conceivable disaster. Making decisions regarding the allocation of scarce resources when emotions are high simply leads to situations where you spend a lot and accomplish very little. When a bomb goes off we scramble for more security screenings that generally won't find bombs. When a school shooting occurs we try to put more restrictions on guns that don't stop school shootings. When a hurricane hits we demand better preparation that won't prevent hurricanes. The reality is the marginal benefit from more and more preparation or security declines very rapidly. Reasonable precautions should be taken and enforced, but beyond that resources are better used elsewhere.
The most effective preventative when it comes to terrorism isn't something you can buy. It's an aware and vigilant public that doesn't simply ignore the people around them. Unfortunately our culture has grown in such a way that pretending everyone else doesn't exist has become a social norm.
I hope that the public servants and politicians of Boston learn what they can from this tragedy and then make wise and prudent decisions moving forward. I hope that they choose to institute policies which protect the public without wasting their time and tax dollars. I hope that they allow time for the emotion of the moment to subside before reacting with knee jerk legislation that will be difficult to retract. Unfortunately through experience I've found these hopes are likely in vain.
More economics next week. Until then stay safe and rational.
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