Economics and Finance

In the current issue of The Future of Children, two Canadian researchers argue that our current approach to protecting the health of children and the adults they will become is wrongheaded. Instead of lavishing funds “on medical research to identify risk factors and mitigate symptoms of disability for individual children,” we should instead lavish funds on “environmental influences that put entire populations at risk.”

They cite a wide range of illnesses to make their case: asthma, diabetes, obesity, autism, ADHD, developmental disabilities, and on and on. All of these are strongly associated with an equally wide range of environmental exposures: metal pollution (especially lead), endocrine disruptors, air pollution, poverty, and on and on. The researchers emphasize that the effect on health is not just an event that kids get over with some medicine and a little rest. These are conditions that keep on giving, often piling on as the child grows to adulthood on into old age when the chickens really come home to roost.

By making an investment that eliminates exposures, the cost of ensuing medical conditions as well as the non-medical cost of lifelong disability is eliminated. But this is not our current approach, which focuses on the gene for this and that and the other clinical measures of individual susceptibility to illness. “As Geoffrey Rose, a pioneer in the science of prevention, wrote provocatively, ‘If causes can be removed, susceptibility ceases to matter’.”

Prevention of this order focuses on changing the physical and social environment to which populations are exposed rather than clinical practices and technologies applied to individual patients. Although this approach makes perfect economic sense, it makes no financial sense—illustrating the common confusion between the two.

What I mean is that it’s common to talk about the economics of prevention as being about the costs of eliminating exposures versus the medical and other costs of living with a condition caused by those exposures. Actually, that’s finance. It’s about the money. And it’s money from a particular, commercial perspective: what is gained and lost in dollars.

The economics of prevention is about the value of what is gained and lost over a lifetime. Sometimes, it’s about what is gained and lost over many lifetimes. For example, recent research suggests that exposures during fetal development to common plasticizers and insecticides increase ovarian cancer rates over at least three generations—that is, the exposure makes it more likely that the exposed fetus will have ovarian cancer as an adult and that her daughters and granddaughters will also have more ovarian cancers.

The process of fracking brings economics and finance into even greater contrast. This last week the Obama Administration issued a rule that requires companies such as ExxonMobil to disclose the chemicals they use drilling for natural gas deposits. The chemicals include endocrine disruptors and other toxins. Once released, these chemicals are carried into the water table and water supply.

So now there’s a rule that these companies must tell us how they’re poisoning us. Originally, the Obama Administration proposed disclosure 30 days in advance of drilling—that is, before the toxin laden fluid is driven into the ground to fracture the rock and release natural gas. However, the final rule requires only that a company disclose what chemicals were used after the drilling is done—in other words, after the toxin-laden fluid has been injected into the ground.

“Lobbyists representing oil industry trade associations and individual major producers like ExxonMobil, XTO Energy, Apache, Samson Resources and Anadarko Petroleum met with officials of the Office of Management and Budget, who reworked the rule to address industry concerns about overlapping state regulations and the cost of compliance.”

That’s finance, not economics. It does not weigh the risk of incurring additional costs for compliance with the additional costs of, among other health effects, neurological damage, endocrine disruption, and cancer.

Instead of this horror show, the Canadian’s point processes that require manufacturers to demonstrate that a chemical is safe before they can use it. They point to repairing substandard housing. They point to a ban on cigarette advertising.

What’s odd about this and other studies that demonstrate the promise of population-based prevention is that it fails to sell the idea in some important way. Although inroads are made here and there, it is very much an effort that is swimming upstream against powerful currents illustrated by fracking.

The shift to population-based prevention, the shift to changing our physical and social environments in order to spare our children and grandchildren from the suffering to which we’ve condemned them will take another kind of environmental change—an environment, a political economy in which finance is not in command.