How Much Is Too Much Cost In A Pandemic?

In my daily life wanderings, I read frequently. Sometimes I cross a sentence or series of sentences that really catch me and make me think. My mind likes to build those bridges between past texts and current applications.

Yesterday, I was reading Richard Dawkin’s book Science In The Soul. In the collection, the article titled “The Values of Science and the Science of Values, Dawkins discusses why we do or do not take various steps that could reduce risk. He says “The reason we don’t take these steps to make life safer is largely one of cost. We are prepared to pay a lot of money, time and trouble for human safety, but not infinite amounts. Like it or not, we are forced to put monetary value on human life (44).”

First, what’s considered risky to one individual or to one government may not be considered risky or as risky to another individual or government. When I think more, I realize that risk is determined both at the individual level and by cultural considerations. The propensity to take on and assume risk is not universally equivalent.

Costs are something else. Costs could be bearable or unbearable in differing situations. For example, those people who normally work, but cannot right now during the COVID19 pandemic, are not getting paid and may find cost unbearable, whereas a person who is getting paid my have a longer span of time during which the cost tolerance falls. There are even people who could bear a great burden of costs and never worry. Cost is thus on a timeline of sorts, mostly sorted by individual needs.

If it is true that individual needs are the sorting mechanism of both risk and cost, then where is the line drawn? Indeed, it appears that Dawkins is correct in saying cost cannot be infinite. At the same time, cost might have to be infinite. What if, for example, this pandemic continues longer than a few months and the only way to eradicate the virus is to continue incurring great costs which continue daily to approach closer and closer to infinity? It would look like a flattening line graph where, as we approach infinity, the curve flattens. When the curve flattens and we near infinity, there isn’t much left in terms of resources in our storage bins. If so, then does the sacrifice of resources better justify costs the closer and closer we get to infinity?

In my own personal terms, cost can approach infinity as long as it likes as long as I am alive. We could apply all kinds of unusual thinking scenarios: ex. if you knew you’d perish, but your kids would survive. If that was the case, how many people would change their risk tolerances?

I think we also have to consider what is being traded for the outcome we wish. Perhaps the traded item(s) or resource(s) determine the acceptable risk levels?

Let’s get back to Dawkin’s somewhat hidden point that we don’t plan ahead for these risks. All the United States government measures to cover the financial aspects of our lives fascinate me because they are all knee-jerk, reactive scenarios to what has happened. I think about the measure to help rescue the airlines and wonder why it only takes a few weeks of slow business for airlines to tip into bankruptcy. I know why this is: the profit margins in airlines are so low. In order to put up a reserve, airlines would have to charge customers more money for each flight. Then I also think: how much is the amount that would need to be set aside? I’m not sure we’d ever know an amount that would work every pandemic or worldwide crisis since time doesn’t allow us to know the starting and ending points.

Being proactive does require more planning, more reserve, than I think most companies have today. It might involve putting more money in the reserve, charging more for goods and services, and paying employees less. If so, is that acceptable to avoid the downsides our markets are experiencing? We can’t win every time we play, so we have to make decisions on how much risk is too much and how much to set aside to protect from risk. Then again, we also have to self-manage these risks since we are always unsure how our government and other governments are managing their risks.

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