When Numbers Start Making Decisions · Season Four, “Things That Cannot Be Priced Directly” · Article 12
1. Season Four did not examine one kind of price
The A$5.87 million Value of Statistical Life estimates the public benefit of small reductions in mortality risk. It is not compensation for an identified death. A QALY and an incremental cost-effectiveness ratio compare a medicine’s additional cost with health gain. They are not a market price for a patient.
The 10–11 per cent permanent-impairment boundary connects medical assessment to lump-sum entitlement. The National Redress Scheme cap uses money to recognise institutional wrong while refusing the claim that payment restores all loss. Child support converts income and care percentages into financial responsibility. NDIS value for money compares supports, outcomes and alternatives.
A Commonwealth penalty unit translates legal seriousness into current currency. An ACCU turns varied abatement into one tonne of CO₂-e. Biodiversity credits connect residual development impacts with predicted improvement elsewhere. Water markets price legal rights to volumes of water across location and reliability. A 7 per cent discount rate converts future resource flows to present value.
Calling all of this “commodification” misses the institutional differences. Some numbers are not market prices, some are not compensation, and some exist so life, health or nature will not be omitted from public decisions. The common subject is commensuration: converting unlike realities into a common unit so choices can be made.
The question is what authority the conversion receives.
2. Five kinds of conversion
First is valuation of a marginal public benefit: VSL assigns money to small mortality-risk reductions for cost-benefit analysis.
Second is health-outcome comparison: QALYs combine longevity and health-related quality, while the ICER relates health gain to additional cost.
Third is compensation or responsibility schedules: impairment payments, redress, child support and penalty units connect categories to monetary consequence.
Fourth is tradable equivalence: ACCUs, biodiversity credits and water rights create portable units that can move between projects, sites or users.
Fifth is intertemporal conversion: discounting places costs and benefits occurring in different years at one decision point.
The categories overlap, but their validity tests differ. VSL evidence cannot set redress. A market price cannot establish ecological equivalence. A statutory cap cannot state total harm. A correct calculation within one conversion does not make it valid for another.
3. Principle one: name the object being converted precisely
Institutions should say “value of a small reduction in mortality risk”, not “price of a life”; “modelled health gain”, not “value of the patient”; “maximum payment under this scheme”, not “maximum harm”; and “legal water entitlement”, not simply “water”.
Precise nouns limit authority. They tell the public what evidence the number contains and what remains outside. Much numerical overreach begins when a long technical definition becomes a short moral label.
Every decision document should identify the object, unit, population, time and purpose. If any changes downstream, validity must be reconsidered.
4. Principle two: a common unit proves only a common dimension
One ACCU and another ACCU share a tonne of carbon accounting; they do not necessarily share permanence, additionality or community effects. Two biodiversity credits may satisfy an offset rule without recreating identical ecological relations. A megalitre is equal in volume while rights differ in reliability and location.
Commensurability is selective by design. It allows exchange along one dimension. The attributes removed to create the unit do not cease to exist.
Registers, certificates and decisions should therefore preserve provenance. Fungibility for a defined obligation should coexist with project, method, location and version information. A market becomes dangerous when exchange erases the evidence needed to check equivalence.
5. Principle three: opening opportunity and closing rights require different evidence
A rough estimate used to trigger assessment or offer support has a different ethical profile from the same estimate used to refuse treatment, compensation or access.
QALYs can organise a PBAC judgement without automatically rejecting every medicine above a secret line. NDIS value analysis can compare alternatives but should not deny a support through an unavailable paper substitute. An impairment percentage that blocks a durable entitlement near the threshold needs strong review.
The governing rule is:
The more individual, coercive, irreversible or exclusionary the consequence, the less a converted number may decide by itself.
This rule does not remove boundaries. It determines the explanation, corroboration and contestability they require.
6. Principle four: some values may enter the account but not compensate one another
Cost-benefit analysis can monetise a risk reduction so it is not ignored. That does not mean an unrelated financial gain automatically justifies violating a right. Biodiversity methods can quantify residual impact, while serious and irreversible harm remains outside ordinary exchange. NSW Environment: Biodiversity credits
Decision systems need both aggregation and constraints. Aggregation compares ordinary trade-offs. Constraints protect legality, minimum safety, rights and irreplaceability. Qualitative reasons interpret cases that neither can settle.
A high total cannot wash away every low component. The structure should state which harms are non-compensable before calculation begins.
7. Principle five: examine distribution and total together
A policy can produce a positive aggregate VSL benefit while concentrating risk on a disadvantaged workforce. A child support formula can allocate average costs while its threshold compounds financial instability. A uniform fine can be trivial for a corporation and devastating for a low-income person.
Distribution is not a decorative equity paragraph added after efficiency. It changes the interpretation of the number. Analysts should report who pays, who benefits, error patterns, baseline vulnerability and capacity to avoid harm.
Willingness-to-pay evidence needs particular care because unequal income influences expressed capacity. A common value can prevent lower explicit valuation of poor lives, but policy still needs to see who bears the regulation and risk.
8. Principle six: time cannot be surrendered to the discount rate
Discounting is valid for comparing resource flows. It becomes overreach when future rights or irreversible loss become negligible only because they occur later. OIA itself recommends sensitivity and declining rates for very long environmental horizons. OIA: Environmental valuation
Long-term decisions should show physical outcomes over time, distribution among generations and irreversibility alongside present value. Uncertainty should be modelled explicitly instead of hidden in a high rate.
For carbon and biodiversity, timing also affects equivalence. Present destruction and future predicted restoration are not synchronous. Permanence obligations and buffers are attempts to govern that difference, not proof that it has vanished.
9. Principle seven: every price needs a version and evidence chain
The VSL is indexed to 2025 prices. A penalty unit changes on a statutory date. ACCUs identify method and vintage. Impairment law and guidelines changed in 2026. Discount rates depend on the applicable guidance and horizon.
A number without version information is not reproducible. Systems should record source data, method, effective date, assumptions, approval and later corrections. Updating a value should not overwrite the one lawfully applicable to a past event.
Traceability also distributes responsibility. It reveals which institution chose the measure, who applied it and who can revise it.
10. Principle eight: remedy must restore relationships, not only numbers
Correcting a calculation is necessary but not always sufficient. Redress requires acknowledgement and institutional responsibility, not only a larger payment. NDIS review should restore the support relationship, not merely change a budget field. Environmental correction may require restoration, additional protection or refusal, not just replacement credits.
The remedy should address the kind of harm the numerical decision caused: lost access, delayed treatment, financial instability, ecological damage or procedural disrespect. Money is one component of repair and sometimes not the decisive one.
11. Value is relational before and after conversion
It is tempting to imagine that reality begins with pure, unpriced value and institutions later corrupt it. In practice, values are already formed through relationships, law, scarcity, care and responsibility. Quantification can reveal ignored harm as well as compress it.
The ethical task is not to keep numbers away from value. It is to build conversions that preserve the relationships necessary for correction. A number should remain answerable to the person, community or ecosystem it represents.
12. A ten-question framework for bounded commensuration
Before money or a common unit receives authority, ask:
- Object: What exactly is being converted?
- Purpose: Which decision is the unit designed to support?
- Method: What evidence, model and counterfactual produce it?
- Scope: Which people, places and time periods does it represent?
- Omissions: Which values and relationships remain outside?
- Distribution: Who receives benefits, burdens and error?
- Constraints: Which harms may not be compensated by a higher total?
- Time: Do discounting, delay or permanence change equivalence?
- Contestability: Can data, method and application be reviewed by someone able to change the result?
- Remedy: Can the system restore the affected relationship and learn for future cases?
The framework does not produce one master price. Its purpose is to stop a useful conversion from becoming universal authority.
Conclusion: draw boundaries around decisions, not prices around everything
Modern government cannot avoid commensuration. Budgets, safety, medicine, compensation and environmental markets require common units. Refusing all conversion can leave important values politically invisible and decisions less accountable.
My final judgement is that institutions may monetise or standardise the dimension necessary for a defined choice, while preserving provenance, distribution, non-compensable constraints, review and responsibility. A common unit should coordinate action without claiming to exhaust value.
Season Four’s conclusion is:
Convert what must be compared; protect what must not be traded away; and never let the price conceal who remains responsible for the decision.
Discover more from Geoffrey Chen
Subscribe to get the latest posts sent to your email.