The Price of Saving a Life … is $3,340: Transcript

Transcript (PDF)

$3,340. That’s one price of saving a life.

In 2015, 5.9m children under the age of five died. More than half of these deaths were of
preventable causes, such as pneumonia, diarrhea, and malaria.

Take malaria. In 2015, it killed 438,000 people, most of whom were children under the
age of five.

One powerful weapon against malaria is the drug artemisinin. For the discovery of this
drug, China won its first ever Nobel Prize in the sciences, in 2015.

Another powerful weapon against malaria is insecticide-treated mosquito nets.

The Against Malaria Foundation is an example of a charity that distributes such nets. GiveWell is an example of a meta-charity. Meaning that GiveWell is not itself a charity,
but instead does research on the effectiveness of charities. According to GiveWell, for
every $3,340 donated to the Against Malaria Foundation, the life of one child under the
age of five is saved.

In high risk areas, for every 2,000 people without insecticide-treated mosquito nets, 2 will die from malaria every year. With mosquito nets, malaria mortality rates can be cut by half. Thus, for every 2,000 people that are protected by mosquito nets for 1 year, 1 life will be saved. That’s because only 1 person will die from malaria, instead of 2.

$6. That’s one conservatively high estimate of what it costs to deliver a mosquito net. This
estimate includes everything from the cost of the net to distribution to follow-up surveys.
We just said that to save 1 life, we need 2,000 person-years’ worth of mosquito net protection. Each net can provide 4 person-years’ worth of protection. So in order to save
1 life, we need 2000 divided by 4 or 500 nets. Each net costs $6, so in order to save 1 life,
it takes $6 times 500 or $3,000. So the bottom line figure is this: For every $3,000 donated,
we’ll have saved 1 life.

Our calculations here were pretty crude. But they do suggest that GiveWell’s $3,340
estimate is plausible. If you’d like, you can check out GiveWell’s calculations, which are
all available on their website.

Saving lives or simply reducing human misery can be pretty darned cheap. Mosquito
nets and malaria are merely one example. Besides mosquito nets and malaria, there are
many, many other cost-effective interventions that we also already know of.

There’s a growing movement that now goes by the name of “effective altruism”. The
altruism bit is nothing new. What’s perhaps new is the emphasis on using our heads –
that’s the effective bit.

In 2014, American charitable giving amounted to an astonishing $358b. But unfortunately, too much of it was spent ineffectively.

For example, in June 2015, a billionaire announced a $400m donation to Harvard. As another example, in 2013, $105,000 was spent fulfilling a cancer-stricken American child’s wish to be a superhero for a day.

Now, Harvard and Batkid are not necessarily unworthy recipients of charity. The problem here is that the money could have been much better spent elsewhere. $400m would have saved 120,000 lives. Instead, it was used to boost Harvard’s endowment by all of 1%. $105,000 could have been used to save 31 lives. Instead, it was used to fulfil a single child’s fantasy for a single day.

One common myth is that poverty in the rich world is similar to extreme poverty in the rest of the world. This is false. Being poor in the rich world is not remotely comparable to being amongst the world’s extreme poor.

In the US, the claim is sometimes made that a family cannot possibly survive on a single minimum wage earner. Well, let’s see.

The minimum wage right now is $7.25 an hour. If you work 40 hours a week and 50 weeks a year, your gross income will be $14,500. With government transfers like the Earned Income Tax Credit and food stamps, your net income will actually be even higher. Much higher. But for the sake of argument, let’s completely ignore these and say that your net income is only $14,500.

If you have a family of 4 to support, that still works out to be $3,625 per person per year, or just about $10 per person per day. Now, this can’t be much fun, but even this is way – and I mean waaaaay better off than the world’s extreme poor, who survive on an astonishingly miserable $1.90/day.

$1.90/day is the benchmark that the UN and the World Bank use for extreme poverty. It began as $1/day in 1985 prices. It is periodically adjusted for inflation, first to $1.08 in 1993 prices, then again to $1.25 in 2005 prices. In October 2015, it was again adjusted, this time to $1.90 in 2011 prices.

You might now be thinking, “Well, $1.90 can’t buy all that much in the US but isn’t stuff much cheaper in poor countries? So $1.90 in poor countries is not really the same thing as $1.90 in the US, right?”

Wrong. The $1.90/day measure is Already. Adjusted. For. Prices. In other words, when using this benchmark, the UN and the World Bank are saying that the extreme poor have to survive on $1.90/day as if they were in the US in 2011.

How on earth can anyone living in the US survive on $1.90 a day? Yet this is the existential question that the world’s poorest 700m people have to face, every single day.

We calculated that a family of four, with only a single minimum wage earner in the US, would still have $10 per person per day. And that was without counting government transfers. This is sometimes considered impossibly poor by US standards, but in fact it is comfortably middle-class by world standards.

For example, a 2011 African Development Bank report defined those with $2-$20 per person per day to be middle class. And those who had between 10 and 20 dollars per person per day were considered to be in the upper middle class.

Discrimination

In one of live TV’s more awkward moments, the American poet Kanye West opined, in the context of Hurricane Katrina, that: “George Bush doesn’t care about black people.”

“I didn’t appreciate it then and I don’t appreciate it now. It’s one thing to say, you know, I don’t appreciate the way he handles his business. It’s another thing to say, this man’s a racist. I resent it, it’s not true, and it was one of the most disgusting moments of my presidency.”

50 or 100 years ago in the US, it was not always an insult to accuse another American of caring more about white people than about black people. In fact, some would have taken this to be a compliment. Things have obviously changed since then.

Very few would still appreciate being called a racist. Unfortunately, there is another form of discrimination that is still widely accepted. In fact, it is usually a good thing to be accused of this form of discrimination. And perhaps astonishingly, this form of discrimination is still enforced by the law of every country on earth.

It is called discrimination on the basis of nationality.

Consider for example Bernie Sanders. He is the rare American politician who is openly socialist. He is a self-styled champion of the poor. Yet listen to the remarks he made, regarding the global poor.

“Open borders? No that’s a Koch brothers proposal.”

“Really?”

“Of course, that’s a right wing proposal which says essentially there is no United States.”

“But it would make a lot of the global poor richer, wouldn’t it?”

“And it’d make everyone in America poorer. Then you’re doing away with the concept of the nation-state.”

Even for Bernie Sanders, who is supposed to stand up for the voiceless poor, it is more important to help someone who is middle class by global standards than someone else who is poor by global standards, provided that the middle class person is American.

Just 8 months before Hurricane Katrina, a much more terrible natural disaster had unfolded elsewhere in the world. The death toll of this natural disaster was more than a
100 times that of Hurricane Katrina’s. Yet, nearly every American will be far more familiar with Hurricane Katrina than with this hundred-fold natural disaster.

No American was accused of not caring about foreigners. Indeed, the American public would likely have been upset if the US government had provided too much in assistance.

Americans were asked to guess what percentage of their federal budget they thought goes to foreign aid. The average response was 26%.

And when asked what percentage they thought should go to foreign aid, the average response was 10%. Americans consistently believe that their government gives too much in foreign aid and that this amount should be lowered, to around 10% of the federal budget. In fact, less than 1% of the US federal budget goes to foreign aid.

If it is unacceptable to pay more attention to another human being simply because she shares our skin color, then it should also be unacceptable to pay more attention to another human being simply because she shares our nationality.

A century or two ago, such parochialism or tribalism may have been justifiable. As a practical matter, it would often have been easier to lend assistance to members of one’s parish, tribe, race, or nation.

Today, this excuse is no longer viable. It was no more difficult to donate to relief for the Indian Ocean tsunami than it was to donate to Hurricane Katrina.

Similarly, it is no more difficult today to donate to the Against Malaria Foundation than it is to donate to the Make-a-Wish Foundation.

It is no longer acceptable to discriminate between human suffering on the basis of race. It is time we also stopped discriminating between human suffering on the basis of nationality.

 

The Price of Saving a Life: Some Additional Remarks

Obviously, the whole matter is of course much more complicated and nuanced than a 12 minute video can hope to do justice to.

For one, there are prominent and legitimate critics of foreign aid. For example, Angus Deaton (2015 winner of the Nobel Memorial Prize in the Economic Sciences) believes that

  • Foreign aid undermines local governments;
  • In fact, foreign aid has done more bad than good; poor countries would have been better off if we hadn’t given them any aid.

William Easterly similarly believes that the emphasis on aid and technocracy is misguided; the global poor would be much better if we emphasized their rights and stopped sponsoring their tyrannical governments.

Another common criticism is of the $3,340 figure and other similar “cost per death averted figures”.

All perfectly fair criticisms and much to think about.

This video sought merely to do a few things:

  • Alert a new audience to the issues of extreme poverty and easily-preventable diseases;
  • Advocate against discrimination on the basis of nationality; and
  • Make the very modest claim that if you are going to donate to charity at all, there are better places than Harvard or Batkid.

I believe that even the harshest critics of the Effective Altruism movement would not object to any of the above.

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