The Value of Human Life in Relation to Business Ethics

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Although there is a widely held opinion that the life of a human being cannot be valued, it should be pointed out this statement has always been a subject of heated debate, because some people believe that it can easily be estimated. The main purpose of this essay is to discuss this issue within the context of the maritime industry. Yet, before that, it is of crucial importance for us to analyze this problem from philosophical, ethical, and moral perspectives because they lay foundations for business ethics.

It should be taken into consideration that the philosophical approach does not give any concise answer to this question. For instance, according to Utilitarian ethics, individual well-being may be sacrificed for the sake of general welfare, which subsequently means that under certain circumstances life may be sacrificed. As regards, the so-called Ethics of Care, which stems from the Christian tradition, we may say that it attaches primary importance to inter-dependence, thus we should value the lives of other people as well as our own. Yet such a principle proves to be inapplicable to economics, which seeks to measure everything in monetary equivalent. Even though economics attempts to describe any phenomenon in terms of numbers, certain qualitative data may not always be subjected to such procedure, This is one of the root causes why the values of life are so often underestimated.

It is traditionally believed that religion or probably it would be better to say religious traditions are unanimous in interpreting these questions, nonetheless, it should be mentioned that even in this field of human activities there is no definite answer. Certainly, at the core of every religion lies the belief that life is invaluable because it is a gift from God, yet as it turns out even Gods gifts may be sacrificed for a certain purpose. Neither Bible nor Quran can validate such behavior, but people may easily present these texts in such a way, that best suits their interests. Thus, it would not be an exaggeration to say that religion and philosophy do not give us some distinctive tenets or rules, to which we should adhere to.

In terms of economics, this notion can be defined as a total cost, which is spent on safety precautions and death prevention. Although some people often raise an objection to such a formulation, saying that it is very cynical, it has to be admitted that this term is still applicable in economic science. Some economists argue that this notion can be defined as a “willingness to pay” in other words the amount of money that the management can afford to pay in order to minimize risk for the risk of life (Landefeld, p 555).

Overall, the main criterion for determining the “value of life” is the cost-benefit ratio; the money invested should be eventually compensated. In order to do it, the management has to evaluate the revenue that can be generated from such measures. In theory, such a policy is aimed at reducing the expenses on life insurance payments. At first glance, such an approach to this highly complex issue may seem cynical to say the least, however, business ethics and economics often make compromises with each other.

These benefits may not necessarily have quantitative representation, because it is difficult to measure such notions as the reputation of the company, involvement of the employees, atmosphere in the workplace, etc. Before deterring the value of life in any given enterprise, one should accurately determine the so-called mortality rate, which mostly depends upon the industry, for that purpose, it is necessary to obtain valid statistical data, because the situation is never static (Viscus, 4).

This is by far the most difficult obstacle that management so often encounters. It appears that the advantages of such investments are often underestimated. Probably, this is the underlying cause of low funding, especially in the maritime industry. Naturally, we should not generalize, because the legislation in various countries may impose very stringent rules on the ship-owners.

Overall, it should be noted that according to maritime safety laws of the United States and Europe there are certain standards that should be met. It is believed that these rules may have an effect on the companies policy concerning the value of life. In fact, any ship that does not correspond to these requirements may be deprived of license (Varotsi, 2009, 77).

Nevertheless, it should be borne in mind that these standards might vary, for instance, if we are speaking about the developing countries, where maritime companies tend to reduce the amount of money spent on safety and security measures. Although the international community attempts to reverse such policy at this moment, the situation still leaves much to be desired partly because the profits of such investments are not always noticeable.

According to the Australian Marine Safety committee, which investigates the compliance of maritime companies to the international security standards there is a vast difference between adequate safety level which should be maintained by every enterprise and the real state of affairs. It is declared that every attempt should be made to minimize the risk for life, yet several companies, especially those ones, which are based in developing countries, do not intend to make these attempts just because they do not seem cost-effective. To a certain degree, it can also be ascribed to the fact that international maritime laws do not always provide a clear interpretation of what should be viewed as a safe environment.

In the report, that the Maritime Safety Committee provides, it is stated that according to Paredo principle, according to which it is possible to cover approximately 80 percent of safety risks by very modest expenses (Maritime Safety Committee, 2002, p 7). Subsequently, it will decrease the losses that the company may incur on health and life insurance payments. Probably, it would be better to give certain examples to substantiate this statement. For instance, the installation of new equipment can equally serve a double purpose; first, it reduces the danger to the life and health of the employees. Secondly, it increases the productivity of the company.

The main problem is that in the vast majority of cases, primary importance is attached to short-term policies, whereas long-term objectives are usually disregarded. Yet, probably, we should pay more attention not to productivity but to the value of life, in particular. For instance, several companies, operating in developing counties do not equip their ships with a sufficient number of lifeboats, these boats may not necessarily though it is an obligatory safety measure. In case, of any emergence, such neglect may prove to be fatal. It is estimated that a company should invest approximately 1000 per year in order to reduce the fatality rate for one employee to a minimum, however, such norm is not always maintained. We may observe a very curious paradox, every person is firmly convinced that at least his or her life is invaluable, and at the same time, he or she may be reluctant to spend money, which may eventually save life of another person. Judging from the so-called Ethics of Care, we need to consider the needs of other people in order to achieve success. Even the laws of economics suggest that this principle is well grounded, yet no one is willing to accept it. One has to understand that any system consists of subsystems, which are closely connected with each other, and any investment made, may eventually boost the development of the company.

Therefore, it is quite possible for us to arrive at the conclusion unlike religion and philosophy that economic science has very clear criterion for determining the value of life. In their core, they are based on the relationships between the cost and benefit of investments in security measures, but there are also certain legislative acts, which are supposed to shape companies policies. As regards, maritime industry in particular we may speak about the chasm between the standards that are officially proclaimed and real standards. Furthermore, it should be taken into account that the benefits of investments are very often underestimated, which often leads to high mortality rates. It seems that the life of a human being should be treated as the most precious treasure, though under some conditions it may not be worth of $ 1000 per year. At first, this statement may appear an outrageous one but the facts substantiate its validity.

Bibliography

Australian Maritime Safety Committee (2002) ”The Safety Gap”. Web.

J. Landefeld (1992). Economic Value of Life. Linking Theory to Practice. Yale University Press.

Iliana Christodoulou-Varotsi (2009). Maritime Safety Law and Policies of the European Union and the United States of America: Antagonism Or Synergy?. Springer.

R. O. Goss (1977). Advances in Maritime Economics. CUP Archive.

W. Kip Viscusi (2003) The Value of Life: Estimates with Risks by Occupation and Industry. Harvard University Press.

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The Value of Human Life in Relation to Business Ethics

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