Those who distinguish “human costs” from “economic costs” are either making an ideological statement or do not understand what economic theory usefully calls a cost. To cite just one example: a Financial Times The editorialist evokes, as if it were self-evident, the “economic, military and human costs” of a new confrontation with the Iranian leaders (“Israel has no good choices against Iran», April 16, 2024).
In economic theory, a cost is the sacrifice of something scarce (even just time) to pursue a desired outcome or avoid an undesired outcome. (Note that in both cases the cost is an opportunity cost: avoiding an undesired outcome implies a more desired alternative; and what is sacrificed for a desired outcome is rare because it, or the resources to produce it, could be used for another purpose.) Desired and undesired outcomes only concern human individuals and are evaluated in individual minds. Economic theory is the result of several centuries of scientific effort, led by some of humanity’s brightest minds, to understand costs, benefits, and value in a logically consistent way, and to understand what is happening in the society.
The ideological reason for the distinction between “human costs” and “economic costs” is perhaps virtue signaling. It’s like saying, “Look, I care about the human costs, while my opponents only care about the costs on Sirius, nine light years from humans”; or “This is my badge of honor for being a member of right-thinking society.”
A Martian landing on Earth might think that it is necessary to distinguish “human costs” (as if there were anything other than costs to humans) to distinguish them from animal costs. To lighten the mood, we could think about the cost a bear must bear for its beer consumption. (See the featured image of this article.)
Returning to humans, there is no epistemological objection to calling a cat a dog and a dog a cat, provided everyone understands which animal they are. At least on the face of it, there is no epistemological objection to calling “human costs” only those costs that do not fall on rejected or hated individuals – social outcasts, bad capitalists, or individuals whose pension funds are invested in capitalist enterprises. But such a distinction is at best moral, at worst arbitrary, and does not help us understand how society (interindividual relations) works. The distinction between human and economic costs echoes subliminal advertising in favor of highly questionable ideologies.
One objection to my statement is that “economic and human costs” are just a standard way of speaking that everyone understands. But my point is precisely that “everyone” misunderstands that this implies that not all economic costs are human costs. And there are ways in which a newspaper with economics background could modify the standard phrase without losing its rhetorical edge. For example, one could say “economic costs, including costs related to life and limb” or “economic costs, including of course all kinds of human costs”. In the Financial TimesAt the beginning of this article, the term “military” is redundant, except in modified expressions such as “economic costs, including of course military costs and costs related to life and limb.” My fear is that most writers in the Financial Timesas in other media, believe that there are two kinds of costs: costs for “bad” or unpopular individuals, called economic costs, and human costs.
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The featured image of this article, a collaboration between your humble blogger and DALL-E, shows a bear paying for beer, suggesting that there are costs other than human costs. This is news to the cashier.
