The Economics of Repairing Aging
How much do you think it will cost to defeat degenerative aging? Pick a number. It's almost certainly the case that the end result - medical technologies that can repair the accumulated cellular and molecular damage that is aging - will very quickly pay for itself.
For all that people try to make it complex, economics is really very simple at its root. All costs must be paid, and there are no free lunches, but new wealth and new resources can be created through investment. Illness, decrepitude and death are costs - deeply unpleasant aspects of the present human condition, but still costs that can be quantified and compared to other resources. Resources directed towards maintaining the aged are resources not directed towards technological advancement or the creation of wealth. The aged themselves are resources that fade in value - for people of health, capacity and vigor are the root of all progress.
Once you start to make this comparison between the cost of degeneration and other goals that could be achieved with the same use of resources, it quickly becomes clear that the level of resources we direct as individuals to medical research is low to the point of irrationality. To pick one example, from many, of the cost of failing biological systems:
By the year 2010 -- less than three years from now -- the annual cost to treat patients in the United States with Alzheimer's disease will reach $160 billion, researchers said Monday in Washington.
But they said scientific discoveries to slow the disease could save society $1.2 trillion to $3.97 trillion a year by 2050.
"Our calculations, while preliminary, suggest it is more important than ever to understand the full economic value associated with new treatments for Alzheimer's, as for any other devastating disease," Vernon told United Press International.
In his report, "Alzheimer's Disease and Cost-effectiveness Analyses: Ensuring Good Value for Money?", submitted for publication by the NBER, Vernon suggests that a treatment for Alzheimer's disease that could delay the onset of the major symptom of the illness -- memory loss that affects activities of daily living -- for five years would be worth nearly $4 trillion a year.
Moreover, if a treatment could be found that would only delay the disease for one year, it still would be worth $1.2 trillion each year, Vernon said. His calculations are based on determining dollar values for productivity, longevity and quality of life.
That is for just one age-related condition amongst many. If you follow that line to the end, you will see staggering numbers:
According to the Lasker Foundation, a dozen or so studies since the mid-1970s have found the value for human life is in the range of $3 to $7 million dollars, using many different methodologies.
If you multiply the death rate at each age [by] the dollar value at each age [you] get the economic loss at each calendar age, due to natural death. The sum of these economic losses divided by the total number of deaths gives you the average economic value of a human life lost.
The result is an average value of about $2 million dollars for each human life lost. If we conservatively assume that the population age structure and the age-specific mortality is the same worldwide as in the United States, then the worldwide natural death toll of 52 million people in the Year 2001 represents an economic loss of about $100 trillion dollars. Every year.
How big of an economic calamity is this? Taking Federal Reserve figures for the total tangible wealth of the United States, including all financial assets, all real estate, and all consumer durables, net of debt, and applying the ratio of U.S. to world GDP gives us an estimate of total global tangible net worth of $91 trillion dollars. So this means that every year, natural death robs us of human capital equivalent in value to the entire tangible wealth of the world.
It is as if in the Year 2001, someone took out a giant broom and swept up all the physical assets of human civilization into a cosmic trash can, and then threw it all away. That's $100 trillion dollars of financial assets, real estate, and durable goods. Gone. And then in 2002, the giant broom sweeps again. Another $100 trillion dollars of human capital is destroyed, or three times larger than the $33 trillion dollars of annual economic activity represented by world GDP. Then it happens again in 2003.
It should be clear that no level of investment in longevity research - that could reasonably be mounted by the human race at this time - would ever be considered too much.
Technorati tags: economics, life extension