This might seem calculating and cold, but that's basically how government agencies work. It doesn't make sense to spend unlimited amounts of money to save a life, so government agencies have some sort of a dollar value on a life[1], above which where they won't bother doing interventions. For instance if it takes $15M to save a life, and that's above the DoT's estimate of $12.5M, then they won't bother. That's not to say that Boeing is in the right here, but if they were in the wrong it's not because "If X is less than the cost of a recall, we don't do one", it's because they grossly undervalued a life in their calculations.
Government agencies use the statistical value of a life to weigh the benefits of a regulation against the costs to the public - the same people who would benefit from the regulation. Would a new safety requirement for cars be worth it if it added $500 to the price of every new car? They might use the value of a life to help answer that question.
This is very different than the recall story, because in that scenario there is no cost to the public at all, only to the corporation. When government agencies make rules about product recalls, they do not try to balance the benefit to the public against the cost to the recalling company, that would be insane.
> The benefit of preventing a fatality is measured by what is conventionally called the Value of a Statistical Life, defined as the additional cost that individuals would be willing to bear for improvements in safety (that is, reductions in risks) that, in the aggregate, reduce the expected number of fatalities by one.
The word "individuals" is very important in this definition.
That would be illegal, and "the public" is much larger than just the customers of a particular company. This is beside the point though. The government asks "would the average person be willing to pay $x to lower their chance of death by y%". The corporate executive asks "would I be willing to pay >$0 to lower their chance of death by y%". "Some of you may die, but it's a sacrifice I am willing to make."
As the other commenter has mentioned, it's passed on via higher prices in the future.
>This is beside the point though. The government asks "would the average person be willing to pay $x to lower their chance of death by y%". The corporate executive asks "would I be willing to pay >$0 to lower their chance of death by y%". "Some of you may die, but it's a sacrifice I am willing to make."
Okay, but surely you don't agree that Boeing should spend infinite amounts of money making their planes safe? For instance we don't install backup engines on the off chance that all 2 engines fail. That's all I'm trying to argue, that the cold calculation/cost benefit analysis as mentioned in the OP isn't where Boeing went wrong, it's that they they undervalued the value of a human life. This was specifically mentioned in my original comment.
What I am trying to argue is that valuing a human life accurately doesn't matter if you're weighing it against your own profits. The correct comparison is against societal benefit, profit is completely morally irrelevant.
I agree that the ceiling for how much money you could spend trying to make an airplane perfectly safe is infinite, so by definition they have to stop somewhere. However, I disagree that finding that line of where to stop has anything to do with the statistical value of a human life.
For example, imagine the Boeing CEO says "we could spend $20 billion on R&D and manufacturing of a new safety system that would on average prevent 1 crash per year, but a 737 MAX carries 200 people, at $15M per life that's only $3 billion in value, so it's obviously better for us to skip it and pass that $20 billion on to shareholders". This would be criminal, and not because their value of a life is off and they got the math a little bit wrong. It's criminal because they are consciously choosing to kill people unnecessarily.
If it is physically and financially possible to make your product safer, you do it, without any thought to how much a life is worth. If it is not possible, because you can't figure out how to solve a problem or it would be so expensive to fix that your business couldn't survive, then you sit down and think about whether it's worth selling your product at all. Are there safer alternatives available? Could a better-funded company fix the flaws you've found? If you determine that your product is important, there are no alternatives out there, and it cannot be made safer, only then do you start weighing the benefits to society against the deaths you expect to occur. I don't really think this is a financial decision involving the value of a life - if you expect your product to kill people then the expected benefits need to be so overwhelming that doing the financial math is unnecessary.
>For example, imagine the Boeing CEO says "we could spend $20 billion on R&D and manufacturing of a new safety system that would on average prevent 1 crash per year, but a 737 MAX carries 200 people, at $15M per life that's only $3 billion in value, so it's obviously better for us to skip it and pass that $20 billion on to shareholders". This would be criminal, and not because their value of a life is off and they got the math a little bit wrong. It's criminal because they are consciously choosing to kill people unnecessarily.
It is not criminal and I have no idea how anyone can think it is.
The crime is in the first paragraphs of the article:
>Boeing has violated a 2021 agreement that shielded it from criminal prosecution after two 737 Max disasters killed 346 people overseas, the Justice Department told a federal judge in a court filing Tuesday.
>According to the Justice Department, Boeing failed to "design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations."
So to recap, they were agreed to implement internal rules that match US laws after killing a bunch of people to avoid criminal liability, _which they failed to do_.
> If it is physically and financially possible to make your product safer, you do it, without any thought to how much a life is worth.
A cursory glance at how literally any product is designed will tell you that this is not true.
All engineering is fundamentally compromise between utility functions and cost functions (where cost is monetary, or weight, or size, or poor usability, ugliness etc). There's always a balance point somewhere. It may be the cost/benefit functions to the user differ from those of the manufacturer, and again to regulators, so the product appears out-of-balance to one or the other, but a meta-balance was struck somewhere.
If every light switch was a 2-foot, 200kg cube with a titanium shell filled with monitoring electronics running on lockstepped processors, fire suppression and potting compound, and was tested individually for a year before sale, it's still not as safe as one with six grounding points (in case the first 5 fail) and triple-thick gold plating on the contacts. You have to stop somewhere.
This isn't what the parent comment is saying. Functional safety is an entire discipline. It neither results in titanium light switches nor uses "value of a human life" calculations. The scenario described by the parent would be a civil and potentially criminal liability.
I know what functional safety is. It's just not described by "you must always make all possible efforts to make things safer under all possible circumstances".
In the case of a normal light switch, for example, two cable screws rather than one per wire would be safer than one as the cables are less likely to come adrift. This would easily be affordable for the manufacturer and the buyer, and well within the abilities of the manufacturer. And yet no light switch has those.
And every aircraft manufacturer could think of something the costs $20 billion to develop and adds safety but they don't, unless the product is unsafe already The one crash a year is, to be fair, solidly in the unsafe end of the spectrum, but would they spend the same to avoid a once in 10,000 year crash and if not, what's the cut-off? There must be a cut-off or it would be impossible for any manufacturer of anything to make any profit, ever, as all spare cash must go into safety system research. And this is demonstratively not what they do.
Boeing has a slightly different problem in that they actively made something less safe and lied about it. They'd have gotten away with it but they flubbed the execution with a single point of failure, which made it easier to line up the Swiss cheese holes and the rest is history.
What do you mean it would be illegal? Obviously the corporation prices in all the expected future recalls into their prices. Yes they won't charge you for the recall, but the future costumers will pay higher prices if in the corporation's calculation the chance of recalls (or the cost of doing them) is increased.
> What do you mean it would be illegal? Obviously the corporation prices in all the expected future recalls into their prices. Yes they won't charge you for the recall, but the future costumers will pay higher prices if in the corporation's calculation the chance of recalls (or the cost of doing them) is increased.
Why oh why do I have to read this on HN again and again? The price of a good does not primarily depend on the cost to make it. So no Boeing can't easily raise their future prices to account for the cost of saving lifes, because there are competitors.
Ok? Does that change the legality of what I described? I don't think so. And that is what I talked about. Raising their prices to cover the recall would not be illegal. Maybe it would be bad business for them, maybe not. I haven't said anything about that.
> Why oh why do I have to read this on HN again and again?
They could make products or services more expensive but then manufacturers with many recalls would end up being prohibitively expensive.
Each person can just choose individually a different manufacturer from the many options, one being "none at all". But you only get one government, it takes a majority to choose, and once chosen you're bound to its directions. So not the same thing at all.
If they could have charged more for the car they already would have. A recall only affecting one make or model won't have a large effect on the profit-maximizing price of the car because the value proposition of the car hasn't changed (or got worse because of perceived unreliability). The cost would then be born by the company and not the consumer.
Competition is the antidote to passing it on, which is why regulatory intervention against concentration is critical. Left to it's own devices, competition disappears in capitalism.
We were taught as part of our CS curriculum that "often, the refusal to assign a dollar value to a human life results in it being terribly undervalued."
There is no such reluctance to do this in law. I think in philosophy classes, professors feel shy about acknowledging the humdrum reality of insurance, the tax code, and our regulatory bodies continuously assigning dollar values to human lives. It feels good and makes you look like a better person to say things like "the value of a single human life cannot be expressed in money terms." Perhaps this is the case, and what the companies and the governmental bodies are really valuing is the economically meaningful activity associated with a person and not the totality of their person.
Babies are worth a lot of money even at a low imputed earning potential just because they have so much life to live.
There’s always a risk calculus that seems cold to an outside observer.
The issue with Boeing and the MAX is that they sort of used the designation of the plane to for lack of a better term, avoid some of the risk calculations.
With the early issues, a pretty cut and dry type training program would have likely prevented catastrophic incidents. They shaved pennys and set many dollars (and hundreds of people) on fire.
If you run a company where low probability, high impact risks drive the operations of your products, setting trust on fire is going to have a real impact on your bottom line. You go from a trusted, admired company to target of memes about assassinated whistleblowers.
My very amateur understanding is that the MAX would have been dead on arrival if it required recertification. It was a marginal bump in fuel efficiency that still lagged behind Aerobus, so their only real marketing strategy was not having to recertify.
Basically either it didn’t require recertification or it wasn’t worth making. I suspect somewhere along the line they realized that wasn’t practical and they either shipped a shoddy project and maybe burned a pile of money or they gave up and definitely burned a smaller but still sizable pile of money.
Probably also some worry that if they didn’t have a competitive smaller plane, they’d lose market share and there’d be even less interest in their next plane.
...Actually it doesn't matter how relatively uncompetitive it would have been in the face of Airbus. Their (Airbus's) waitlist is so bloody long, you'd still have looked longingly at Boeing anyway.
Despite that, they made a coscious decision to deceive airlines, pilots, and their regulators. All to "maximize shareholder value".
The problem with this type of thinking is that it often assumes externalized costs, and even at that, what price do you put on “I don’t want to use car of brand X because the car maker is doing sus things and people speaking out about it are dying.” ?
Take for instance the recent train derailments. Are the costs of cleanup n>0 if the company can get their lawyers to successfully argue they don’t need to pay it? For the company it’s n=0 but for society it is n>0.
Doing the maths is simpler when you can disregard many factors and leave only the ones that affect your bottom line.
The difference is that the government agency actions do not cause deaths (it merely prevents death from independent causes), whereas "major car manufacturer" kills people with their faulty rear differential.
And what self-respecting congressman, senator, or president didn't have a pet CEO or three of any said major automotive cartel at the time sponsoring them? If they didn't, they're not doing it right.
Government agencies in the form of rescue/emergency response organisations frequently spend huge sums of money to try to rescue indidivuals.
The US Coast Guard explicitly stated that they "do not associate cost with saving a life" following that fateful Billionaires game of chicken with extreme water pressure.
Or: they had an accurate estimate for the importance of brand trust and reputation over the short term, and they've had that short term outlook for a long time. Perhaps since 1997.
[1] https://en.wikipedia.org/wiki/Value_of_life#United_States