"In A World of Finite Resources, We Have to Make Choices"

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This is from Stone Street Advisors

Contrary to the ignorant and naive (to put it gently) beliefs of people like Michael Moore,
we do not live in a world of infinite resources.  Time, money, oil,
life, whatever, all finite resources.  This is a fundamental tenet of
Economics, so for those of you even remotely familiar with the field,
feel free to ignore the following, as it is intended for those who flap
their jaws making normative proclamations as if we lived in some magical
utopia of the infinite.

In the link, above, economist Milton
Friedman tears a young (allegedly) Michael Moore a new one, when Moore
asks (in the form of a statement, a curious approach) how Ford isn't
wrong for deciding that spending $13/vehicle to make the Pinto
(presumably) more safe would cost more than paying any lawsuits from
(wrongful?) death lawsuits.  Let's put aside for a second Moore's
assertion that "Ford produced it knowing full-well that in any rear-end
collision the gas tank would blow-up," based of an "internal memo" which
was later revealed to have been nothing of the sort, or any of the other "facts" he states which were all easily refuted.

A
simple fact of life, as economics teaches us, is that not only are
resources finite, but as Friedman says in his reply to Moore, "these
things are a little more subtle and sophisticated than you were at first
led to believe. You can't get easy answers along this line."

Coincidently,
I read about a real-life example of a problem similar to the
(semi-imagined) one faced by Ford (according to Moore).  The fundamental
question we - and Friedman - need to consider is whether in a world of
finite resources, Is Reducing Risk Always Worth the Price?
This is exactly the question Los Angeles citizens and politicians have
been asking themselves for years over potential LAX runway
reconfiguration plans which would reduce the number of deaths caused by
runway accidents.

Barnett’s
panel looked at three options: leaving the runways as is with the
landing plane crossing the takeoff runway at an acute angle, moving them
100 feet farther apart and adding a third center taxiway that would
enable the landing plane to cross the takeoff runway at a 90 degree
angle, and moving them 340 feet farther apart and adding the center
taxiway.

Using actual pilots and controllers, the panel did
simulations and came to the conclusion that LAX’s north airfield was
extremely safe under the current configuration with the risk of a
passenger death caused by a runway collision being 1 in 150 million.
But, separating the runways by 100 feet would reduce that mortality rate
by 40 percent, and separating the runways by 340 feet lowered the
mortality risk by 55 percent.

The panel’s conclusion? Don’t bother.

“If a number is incredibly small, reducing it even by 50 percent might not mean that much,” Barnett says.

In
the last decade, 750 million passengers flew in or out of LAX. During
that time there were five deaths caused by runway accidents and 75
deaths by other accidents, for a total of 80 deaths. Reducing the number
of runway accident deaths by 40 percent lowers the actual number to 3
deaths, which, added to the 75 deaths by other accidents, brings total
deaths to 78. Thus, the runway reconfiguration would save two lives in a
decade.

I'm not one of those cold-hearted actuaries
who use  opaque (to most) mathematical formulas to figure out the value
of a life.  Quite the contrary, all it takes is a few seconds of putting
yourself in the shoes of someone who's lost someone to understand the
very real sadness, grief, and suffering associated with death, a feeling
I'd prefer none of us ever had to experience, were it possible.
Unfortunately, death is not only possible, but inevitable, and we'd be
only fooling ourselves to think otherwise, explicitly or otherwise.  The
resources we use to prolong life/prevent (untimely) death both finite
and scarce, but in using them for such, have a non-zero opportunity
cost.

“If it costs a billion dollars you might say,
‘Might we not be able to spend a billion dollars in ways that might save
more lives?” he says, suggesting improving highways or funding cancer
research as possibilities. “In a world of finite resources we have to
make choices.

“Air travel has become so safe that attempts to improve it marginally may not pass a cost/benefit test,” Barnett says.

People like Michael Moore live in a fantasy land where the production possibilities curve simply
does not exist.  In such a world, we'd have unlimited money, time,
labor, land and raw materials with which to update the runway layout to
save those two precious lives/decade, but unfortunately - with my most
sincere apologies for bursting the bubble of anyone still suffering from
Moore's particular set of delusions - such is not the case.

If
you still don't understand why, give it another read while not high or
tripping on shrooms.  If, after doing so you're still not convinced,
please disconnect and go live on a hippy commune and leave the rest of
us alone.  If you couldn't tell, we have enough with which to deal
without your ignorant rants/protests/vigils/etc.  Thanks in advance!

The Analyst

Stone Street Advisors