Morton Bast

editorial coordinator, TED

This conversation is closed.

How should we think about the cost of global problems?

At a recent TED Salon event, Bjorn Lomborg looked at 100 years of global problems through the lens of GDP. What do you think of this approach? How might you go about calculating what our major global problems cost us?

Watch the talk and read the TED Blog's Q&A with Lomborg here: [http://wp.me/p10512-lK7] Also, see his 2005 TED Talk for a related discussion of global problems.

  • Nov 14 2013: Coming from an economics background, I have to point out that it is not easy to assign value to things that are not traded on free markets. Sure literacy is doable, but how do you tackle environmental issues, or gay marriage? In addition, there is a problem with choosing the appropriate discount rate. The discount rate has to do with translating the value of money in the past or the future to present day value. When looking at the past, it is not easy, but you can generally figure it out. But who is going to figure out the discount rate for the future? Sure, you can make an educated guess if you don't look too far in the future, but even a 1% change in discount rate can make a difference of millions of dollars.

    Both of these problems may seem somewhat technical, having to do with calculations. But let's not forget that we want to use these calculations to make decisions. And then we should deal with the issue that I sought to illustrate: the underlying, sometimes hidden, assumptions determine a large part of the outcome of your calculations. This means that the calculations, and the decisions that follow them, are very easy to manipulate. If the model doesn't give you what you want, you just tweak a number that nobody agrees upon anyway, and suddenly you get what you knew was best all along.
  • Nov 12 2013: The important thing is to have numbers with calculations behind them based in fact. Otherwise, priorities are dictated through gut feelings and guess work, and you can easily find yourself allocating resources poorly. Seeing as resources are always limited, that means you're preventing less harm then possible.

    That calculation could be based on things like lives lost and be just as legitimate, but the way I see it, the important thing is to calculate rather than go by feeling.
    Either way, damage to GDP seems as good a method as any.

    Basically, engineer an optimized solution, as opposed to the current method which is hap haphazardly stumbling our way through global issues (and potentially killing millions in the process, albeit indirectly, and through incompetence as opposed to malice).
  • thumb
    Nov 12 2013: For those unfamiliar with how economists try to get some numerical measures to compare options that have benefits and costs that are hard typically to measure and often different in kind, here is a wikipedia reference: http://en.wikipedia.org/wiki/Cost%E2%80%93benefit_analysis

    In my experience, such analysis typically is presented along with comparisons, both qualitative and quantitative, laying out in narrative some of the other variables that distinguish options and that are impossible to capture in comparable quantitative measures.

    There is a link in the article to cost-effectiveness, which is a valuable way of measuring the impact of options that have the same goal. For example, one might compare two health treatments by the proportion of people who are cured by the treatment. For immediate comparables of this kind, there would be no need to translate into a secondary measure. It is in comparing the social benefit of, say, a program/policy that improves people's health and one that protects endangered species that one faces the problem of the effects not naturally being directly comparable.