Cost/Benefit Analysis on smoking & car accident (Ford Pinto) Jeremy Bentham - Harvard

Summary

In this engaging lecture, the philosophical and ethical challenges of utilitarianism and cost-benefit analysis are explored through historical and contemporary cases. Jeremy Bentham's philosophy of maximizing utility is put to the test with the controversial practices of assigning monetary value to human life and happiness. From the infamous Ford Pinto case to smoking in the Czech Republic and cell phone usage while driving, these examples highlight the tension between economic calculations and moral considerations. Critics question whether individual rights are adequately respected and whether human experiences can truly be quantified in economic terms.

Highlights

• Bentham's philosophy: happiness and utility should guide morality. 🎯
• Utilitarianism: is it ethical to put a price on human life? 🤔
• Ford Pinto case: cost-benefit analysis versus human safety. 🚗💥
• Czech Republic smoking study: economic benefits versus public health. 🚬
• Cell phone usage and driving: a modern utilitarian dilemma. 📱

Key Takeaways

• Jeremy Bentham's utilitarianism advocates for maximizing collective happiness over individual pain. 📊
• Cost-benefit analysis often places monetary values on human life and safety, sparking ethical debates. 💰
• The infamous Ford Pinto case illustrated the potential ethical pitfalls of rigid economic calculations. 🚗
• Smoking and economic gain in the Czech Republic posed questions about societal costs versus benefits. 🚬
• Cell phone usage while driving highlights modern utilitarian challenges in balancing convenience with safety. 📱

Overview

The lecture delves into Jeremy Bentham’s utilitarian philosophy, which posits that maximizing happiness and utility is the keystone of morality. This abstract idea is contrasted with real-world scenarios where human lives are given economic values, stirring considerable debate about morality and economics.

A significant portion of the lecture focuses on historical and modern applications of cost-benefit analysis. The Ford Pinto case, where the potential for deadly car fires was financially weighed against the cost of safety improvements, is a stark illustration of where economic rationale can clash with ethical imperatives. Similarly, smoking’s economic benefits in the Czech Republic were controversially weighed against public health.

Modern debates, such as the implications of cell phone use while driving, further explore how utilitarian principles are applied today. These scenarios underline the persistent question: Can we truly quantify human experiences, rights, and values in strictly economic terms? The discussion invites reflection on whether moral considerations must trump monetary calculations in legislation and societal norms.

Chapters

• 00:00 - 00:30: The Case of the Queen vs. Dudley and Stephens This chapter discusses the famous legal case of the Queen vs. Dudley and Stephens, often referred to as the "Lifeboat Case." The case revolves around an instance of survival cannibalism at sea and the ethical and legal arguments surrounding the actions of Dudley and Stephens. The discussion pivots to analyze these actions through the lens of Jeremy Bentham's utilitarian philosophy, assessing the moral implications of their decision based on utilitarian principles.
• 00:30 - 05:00: Jeremy Bentham's Utilitarian Philosophy This chapter delves into the early life and philosophical contributions of Jeremy Bentham, a prominent figure in utilitarian philosophy. Bentham was born in 1748 in England and began his education early, attending Oxford at the age of twelve and proceeding to law school at fifteen. Although admitted to the bar at nineteen, he chose not to practice law, dedicating his life instead to the study of jurisprudence and moral philosophy. The chapter outlines the introductory concepts of Bentham's utilitarian philosophy, emphasizing the core principle of maximizing overall happiness or utility.
• 05:00 - 10:00: Cost-Benefit Analysis: Smoking in the Czech Republic The chapter discusses the principle of morality as articulated by Bentham, which is to maximize general welfare or happiness. This is linked to maximizing utility, a key concept in assessing the morality of actions by their outcomes.
• 10:00 - 15:00: The Ford Pinto Case and Cost-Benefit Analysis This chapter delves into 'The Ford Pinto Case and Cost-Benefit Analysis,' highlighting the moral reasoning driven by the principles of pain and pleasure. It reflects on the utilitarian philosophy, especially Bentham's idea of maximizing happiness or utility. The content suggests that any moral system should incorporate the imperative of maximizing the greatest good for the greatest number.
• 15:00 - 20:00: Defending and Critiquing Utilitarianism and Cost-Benefit Analysis The chapter explores the principle of utility as advocated by Bentham, emphasizing its application not just to individuals but also to communities and legislators. It challenges readers to consider the collective sum of individual utilities within a community when determining policies, laws, and issues of justice.
• 20:00 - 25:00: The Value of Human Life in Utilitarian Calculus The chapter titled 'The Value of Human Life in Utilitarian Calculus' discusses the concept of maximizing utility, which involves evaluating a policy by measuring its benefits against its costs. The goal is to identify the action that increases overall happiness and reduces suffering, a key principle in utilitarian philosophy. The chapter aims to explore the reader's agreement or disagreement with this ethical framework.
• 25:00 - 30:00: Objections to Utilitarianism: Translating Values into Dollar Terms The chapter discusses the application of utilitarian logic in the form of cost-benefit analysis by companies and governments. This involves assigning a monetary value to represent the utility of the costs and benefits of different proposals. An example from the Czech Republic is mentioned to illustrate this concept.
• 30:00 - 40:00: Thorndike's Study on Measuring Human Values The chapter discusses a case study related to a proposal for increasing the excise tax on smoking, focusing on Philip Morris, a major tobacco company. The study, commissioned by Philip Morris, analyzes the cost-benefit of smoking in the Czech Republic, revealing a controversial conclusion that the government benefits financially from its citizens smoking.

Cost/Benefit Analysis on smoking & car accident (Ford Pinto) Jeremy Bentham - Harvard Transcription

• 00:00 - 00:30 last time we argued about the case of the Queen versus Dudley and Stephens the lifeboat case the case of cannibalism at sea and with the arguments about the lifeboat in mind the arguments for and against what Dudley and Stephens did in mind let's turn back to the philosophy the utilitarian philosophy of Jeremy
• 00:30 - 01:00 Bentham Bentham was born in England in 1748 at the age of twelve he went to Oxford at fifteen he went to law school he was admitted to the bar at age 19 but he never practiced law instead he devoted his life to jurisprudence and moral philosophy last time we began to consider Bentham's version of utilitarianism the main idea is simply
• 01:00 - 01:30 stated and it's this the highest principle of morality whether personal or political morality is to maximize the general welfare or the collective happiness or the overall balance of pleasure over pain in a phrase maximize utility Bentham arrives at this principle by the following line of
• 01:30 - 02:00 reasoning we're all governed by pain and pleasure they are our sovereign masters and so any moral system has to take account of them how best to take account by maximizing and this leads to the principle of the greatest good for the greatest number what exactly should we maximize Bentham tells us happiness or more precisely utility maximizing
• 02:00 - 02:30 utility is a principle not only for individuals but also for communities and for legislators what after all is a community Bentham asks it's the sum the individuals who comprise it and that's why in deciding the best policy in deciding what the law should be in deciding what's just citizens and legislators should ask themselves the question if we add up all of the
• 02:30 - 03:00 benefits of this policy and subtract all of the costs the right thing to do is the one that maximizes the balance of happiness over suffering that's what it means to maximize utility now today I want to see whether you agree or disagree with it and it often goes this
• 03:00 - 03:30 utilitarian logic under the name of cost-benefit analysis which is used by companies and by governments all the time and what it involves is placing a value usually a dollar value to stand for utility on the costs and the benefits of various proposals recently in the Czech Republic there was a
• 03:30 - 04:00 proposal to increase the excise tax on smoking Philip Morris the tobacco company does huge business in the Czech Republic they commissioned a study of cost-benefit analysis of smoking in the Czech Republic and what their cost-benefit analysis found was the government gains by having Czech citizens smoke now how do they gain it's
• 04:00 - 04:30 true that there are negative effects to the public of enhance of the Czech government because there are increased health care costs for people who develop smoking related diseases on the other hand there were positive effects and those were added up on the other side of the ledger the positive effects included for the most part various tax revenues that the
• 04:30 - 05:00 government derives from the sale of cigarette products but it also included healthcare savings to the government when people die early pension savings you don't have to pay pensions for its long and also savings in housing costs for the elderly and when all of the costs and benefits were added up the philip morris study found that there is a net public finance gain in the czech
• 05:00 - 05:30 republic of a hundred and forty seven million dollars and given the savings in housing and health care and pension costs the government enjoys the saving of savings of over twelve hundred dollars for each person who dies prematurely due to smoking cost-benefit analysis now those among you who are defenders of utilitarianism may think
• 05:30 - 06:00 that this is an unfair test philip morris was pilloried in the press and they issued an apology for this heartless calculation you may say that what's missing here is something that the utilitarian can easily incorporate namely the value to the person and to the families of those who died from lung cancer what about the value of life some
• 06:00 - 06:30 cost-benefit analyses incorporate a measure for the value of life one of the most famous of these involved the Ford Pinto case did any of you read about that this was back in the 1970s do you remember what the Ford Pinto was a kind of car anybody it was a small car subcompact car very popular but it had one problem which is the fuel tank was
• 06:30 - 07:00 at the back of the car and in rear collisions the fuel tank exploded and some people were killed and some severely injured victims of these injuries took Ford to court to sue and in the court case it turned out that Ford had long since known about the vulnerable fuel tank and had done a cost-benefit analysis to determine
• 07:00 - 07:30 whether it would be worth it to put in a special shield that would protect the fuel tank and prevent it from exploding they did a cost-benefit analysis the cost per part to increase the safety of the Pinto they calculated at $11 per part and here's this was the cost-benefit analysis that emerged in
• 07:30 - 08:00 the trial $11 per part at 12.5 million cars and trucks came to a total cost of a hundred and thirty seven million dollars to improve the safety but then they calculated the benefits of spending all this money on a safer car and they counted a hundred and eighty deaths and they assigned a dollar value two hundred
• 08:00 - 08:30 thousand dollars per death 180 injuries 67,000 and then the cost to repair the replacement cost for two thousand vehicles that would be destroyed without the safety device seventy seven hundred dollars per vehicle so the benefits turned out to be only forty nine point five million and so they didn't install the device needless to say when this
• 08:30 - 09:00 memo of the Ford Motor Company's cost-benefit analysis came out in the trial it appalled the jurors who awarded a huge settlement is this a counterexample to the utilitarian idea of calculating because for it included a measure of the value of life now who here wants to defend cost-benefit analysis from this
• 09:00 - 09:30 apparent counter example who has a defense or do you think this completely destroys the whole utilitarian calculus yes yeah well I think that once again they've made the same mistake the previous case did that they assigned a dollar value to human life and once again they failed to take account things like suffering and emotional losses by the families I mean families lost
• 09:30 - 10:00 earnings but they also lost a loved one and that is more valued than $200,000 all right and wait wait that's good what's your name Julia rota so with 200,000 Juli is to too low a figure because it doesn't include the loss of a loved one and the loss of those years of life what would be what do you think would be a more accurate number I don't believe I could give a number I think that this sort of
• 10:00 - 10:30 analysis shouldn't be applied to issues of human life I think can't be used monetarily so they didn't just put too low a number Julie says they were wrong to try to put any number at all all right let's hear someone who you have to adjust for inflation [Laughter] all right fair enough so what would the
• 10:30 - 11:00 number be now this was 30 this was 35 years ago two million dollars you would put two million and what's your name Voytek says we have to allow for inflation we should be more generous then would you be satisfied that this is the right way of thinking about the question I guess unfortunately it is for there needs to be a number put somewhere
• 11:00 - 11:30 like I'm not sure that number would be but I do agree that it could possibly be a number put on human life all right so Voytek says and here he disagrees with Julie Julie says we can't put a number on human life for the purpose of a cost-benefit analysis Wojtek says we have to because we have to make decisions somehow what do other people
• 11:30 - 12:00 think about this is there anyone prepared to defend cost-benefit analysis here as accurate as desirable yes oh yeah I think that if Ford and other car comings didn't use cause benefit analysis they'd eventually go out of business because they wouldn't be able to be profitable and millions of people wouldn't be able to use our cars to get the jobs to put food on table to feed their children so I think that if cost-benefit analysis isn't employed the greater good is sacrificed in this case
• 12:00 - 12:30 all right let me what's your name Raul Raul there was recently a study done about cell phone use by drivers when people are driving a car and there's a debate whether that should be banned and the figure was that some 2,000 people died as a result of accidents each year using cell phones and yet the
• 12:30 - 13:00 cost-benefit analysis which was done by the Center for analysis at Harvard found that if you look at the benefits of the cellphone use and you put some value on the life it comes out about the same because of the enormous economic benefit of enabling people to take advantage of their time not waste time be able to make deals and talk to friends and so on while they're driving doesn't that suggest that it's a
• 13:00 - 13:30 mistake to try to put monetary figures on questions of human life well I think that if the great majority of people try to derive maximum utility out of a service like using cell phones and the convenience that cell phones provide that sacrifice is necessary for satisfaction to occur you're an outright utilitarian in yes ok all right then one
• 13:30 - 14:00 last question row ok and I put this to Wojtek what what dollar figure should be put on human life to decide whether to ban the use of cell phones well I I don't want to arbitrarily calculate a figure I mean right now I think that you want to take it under advisement yeah but what roughly speaking would it be you've got twenty three hundred deaths you've got to assign a dollar value to
• 14:00 - 14:30 know whether you want to prevent those deaths by banning the use of cell phones in cars okay so what would your hunch be how much a million two million two million was wojtek's Figg yeah is that about right maybe a million a million yeah you know the that's good thank you okay so these are some of the controversies that arise these days from cost-benefit analysis especially those
• 14:30 - 15:00 that involve placing a dollar value on everything to be added up well now I want to turn to your objections to your objections not necessarily to cost-benefit analysis specifically because that's just one version of the utilitarian logic in practice today but to the theory as a whole to the idea that the right thing to do the just basis for policy in law
• 15:00 - 15:30 is to maximize utility how many disagree with the utilitarian approach to law and to the common good how many agree with it so more agree than disagree so let's hear from the critics yes my main issue
• 15:30 - 16:00 with it is that I feel like you can't say that just because someone's in the minority what they want in need is less valuable than someone who's in the majority so I guess I have an issue with the idea that the greatest good for the greatest number is okay because there's still what about people who are in the lesser number like it's not fair to them they didn't have any say in in where they wanted to be all right that's an interesting objection you're worried about the effect on the minority yes
• 16:00 - 16:30 what's your name by the way Anna who has an answer to Anna's worry about the effect on the minority what do you say to Anna um she said that the minorities value less I don't think that's the case because individually the minorities value is just the same as the individuals the majority it's just that the numbers outweigh the minority and I mean at a certain point you have to make a decision and I'm sorry for the
• 16:30 - 17:00 minority but sometimes it's for the general for the greater good for the greater good Anna what do you say what's your name young done what do you say to jung da-jung that says you just have to add up people's preferences and those in the minority do have their preferences Wade can you give an example of the kind of thing you're worried about when you say you're worried about utilitarianism violating the concern or respect do the minority can you give an example so well
• 17:00 - 17:30 with any of the cases that we've talked about like for this break1 I think the boy who was eaten still had as much of a right to live as the other people and just because he was the minority in that case the one who maybe had less of a chance to keep living that doesn't mean that the others automatically have a right to eat him just because it would give a greater
• 17:30 - 18:00 amount of people a chance to live so there may be certain rights that the minority members have that the individual has that shouldn't be traded off for the sake of utility yeah yes anagh yeah under this would be a test free for you back in ancient Rome they threw Christians to the Lions in the Coliseum for sport if you rant think how the
• 18:00 - 18:30 utilitarian calculus would go yes the Christian thrown to the Lions suffers enormous excruciating pain but look at the collective ecstasy of the Romans yonder well in that time I don't if I in modern day have time to value the to give a number to the happiness given to
• 18:30 - 19:00 the people watching I don't think any like policymaker will say the paying of one person of the suffering of one person is much much is in comparison to the happiness gained it's no but you have to admit that if there were enough Romans delirious enough with happiness it would outweigh even the most excruciating pain of a handful of Christians thrown to the lion so we really have here two different
• 19:00 - 19:30 objections to utilitarianism one has to do with whether utilitarianism adequately respects individual rights or minority rights and the other has to do with the whole idea of aggregating utility or preferences or values is it possible to aggregate all values to translate them into dollar terms there
• 19:30 - 20:00 was in the 8th in the 1930s and an psychologists who tried to address this second question he tried to prove what utilitarianism assumes that it is possible to translate all goods all values all human concerns into a single uniform measure and he did this by
• 20:00 - 20:30 conducting a survey of young recipients of relief this was in the 1930s and he asked them he gave them a list of unpleasant experiences and he asked them how much would you have to be paid to undergo the following experiences and he kept track for example how much would you have to be paid to have one upper front tooth pulled out or how much would you have to be paid to have one little
• 20:30 - 21:00 one little toe cut off or to eat a live earthworm six six inches long or to live the rest of your life on a farm in Kansas or to choke a straight cat to death with your bare hands now what do you suppose what do you put the suppose was the most expensive item on that list Kansas
• 21:00 - 21:30 yeah you're right it was Kansas for her for a Kansas people said they'd have to pay them they have to be paid $300,000 what do you think what do you think was
• 21:30 - 22:00 the next most expensive not the cat not the tooth not the toe the worm people said you'd have to pay them $100,000 to eat the worm what do you think was the least expensive item not the cat the tooth during the Depression
• 22:00 - 22:30 people were willing to have their tooth pulled for only $4,500 now here's what thought here's what Thorndike concluded from his study any want or satisfaction which exists exists in some amount and is therefore measurable the life of a dog or a cat or a chicken consists of
• 22:30 - 23:00 appetites cravings desires and their gratifications so does the life of human beings though the appetites and desires are more complicated but what about Thorndike study does it support Bentham's idea that all goods all values can be captured according to a single uniform measure of value or does the
• 23:00 - 23:30 preposterous character of those different items on the list suggest the opposite conclusion that may be whether we're talking about life or Kansas or the worm maybe the things we value and cherish can't be captured according to a single uniform measure of value and if they can't what are the consequences for the utilitarian theory of morality
• 23:30 - 24:00 that's a question we'll continue with next time