[PEN-L:8228] Re: Re: Re: Summers Memo

[Brad De Long <delong@xxxxxxxxxxxxxxxxx>]

>
>If the economic loss from a premature death is the present value of the
>foregone income, then it is "impeccably logical" to view the death of an
>African as less costly than that of a North American or Swede. Your
>argument is all about raising welfare levels - I don't see how that has
>much bearing on this murderous arithmetic.

But it does: the market weights your well-being roughly in proportion to
your income--that is what taking real GDP per capita to be your welfare
index implies. No income, a zero weight. That's how market economies
generate things like the Bengal famine of 1942.

The point is that if you are doing neoclassical utilitarian economics
correctly, you don't make the mistake of confusing social welfare with GDP
per capita.


Brad DeLong