Just how committed are you to fixing inequality?
In 2013, Alzheimer’s will cost the nation $203 billion. This number is expected to rise to $1.2 trillion by 2050.
The “nation” they refer to is just the United States. There’s a lot more suffering across imaginary lines in every direction. Additionally, I don’t know if this includes the costs associated with unpaid caretakers, which don’t have dollar signs attached but still have real, economic value, and the figures perhaps don’t include the tremendous suffering associated with the debilitating disease, which probably exceed the strict economic costs. There are preferred ways to die.
Given this, we ought to be willing to pay significantly more than the strict economic costs of Alzheimer’s for a cure to the disease. And keep in mind that these are annual costs. So, we would be justified in paying a growing amount each year for a cure that works each year.
A willingness to pay for a cure, however, has consequences. If we know someone has the cure and we pay her for it, she would become the wealthiest person in the world within five months, even if she collects only the estimated US-based economic benefits. Keep in mind that we would still be enormously better off for her contribution. But it’d be a jaw-breaking blow to economic equality.
Of course, we could be “greedy”. We could just pay her $20.3 billion per year. Even then, she’d still reach the top 0.1% income percentile almost instantly and become the richest person on the planet within 4 years. The rest of society, though would get to enjoy the “consumer surplus” of saving $203 billion in economic costs while paying only a trifling $20.3 billion. Inequality would still increase, but less so.
This frugality, however, could be a problem. What if our cure-maker believes that developing the cure will cost $21 billion. That is a bit more than what we wish to pay her but still much less than the economic costs of Alzheimer’s. She wouldn’t be able to justify developing a cure, and we’d be stuck with the full costs of Alzheimer’s as a result of our stinginess. It’s almost literally penny-wise and pound foolish. If we were wiling to let Zuckerberg $17 billion off a way for people to goof off while at work, the cure to Alzheimer’s deserves better.
Such situations do need to be kept in mind when staring down inequality. The billionaires of this world mostly got there by providing modest bits of value to very large numbers of people. Often the value seems astoundingly modest, as in the case with the $57 billion Amancio Ortega of Zara. But clothing costs are real, even if they are less poignant than Alzheimer’s costs.
Of course, Zuckerberg and Ortega have probably already done what they were going to do for us. If we went French Revolution on them, I don’t see much of a downside. The big question is how much are we willing to let people benefit from future innovations? Do we want to combat inequality by paying less at the risk of not getting some solutions at all, or do we go ahead and pay up and protest inequality with words alone?
Photo credit: The Onion