Several months ago, in the wake of the slaughter at Marjory Stoneman Douglas High School, the New York Times profiled Grinnell, a quietly prosperous and civic-minded town in Iowa known mostly for the local college of the same name. Some of the prosperity flows from the Brownell family, whose manufacturing and retailing enterprise provides employment for many in the area and charitable support for good causes including local parks and gardens, the arts, the library and extracurricular activities in schools. The Brownells seems like ideal citizens, neighbors and benefactors, though the family business bothers some residents. According to the Times, the firm bills itself as “the country’s leading supplier of firearm accessories, gun parts, and gunsmithing tools.” Pete Brownell, the head of the firm, has served as a past chairman of the National Rifle Association.
The relationship between the town and the family is something for the locals to sort out. The rest of us may wish to reconsider who is actually paying for the parks and the library and the other philanthropic gifts the Brownells have nominally bestowed. The reason is the gun industry is probably most unprofitable legal economic activity in the US. How can that possibly be true? Why doesn’t it cripple firms like Brownells? The gun industry’s open secret is what economists call a negative externality: a cost that firms in the industry do not pay and leave for others to bear.
Total revenue for the entire American gun industry is reported to be about $17 billionper year. That includes everything from firearms to parts and accessories to ammunition. The size of the negative externality, the cost that the gun industry does not bear, is anywhere from $50 billion to $100 billion, depending on how you count it. What is this externality? The cost of gun violence. Every year almost 35,000 people die of gunshot wounds and another 70,000 suffer injury.
How you put a price on the toll in human life and suffering? If you say money doesn’t replace human life, you are correct. Just ask any Parkland parent. Yet the reason economists attach a hard dollar value to human life is to ensure it isn’t forgotten in policy making, legal or compensatory calculations. The 9/11 Victim Compensation Fund did this to provide fair settlements for the families of people killed or wounded in that attack.
That’s exactly what’s missing from the way we treat the gun industry from an economic perspective. If we addressed gun violence the way we approached the 9/11 tragedy, we would have to make an effort the size the cost to our society, using the quantitative methods developed in comparable situations involving grievous injury and premature death. Any of the likely methods readily demonstrate the magnitude of the costs the gun industry leaves for others to bear:
- Direct economic costs. Gun fatalities and gun-related injuries impose substantial costs on individuals, families and society. In 2015, researchers from the US Centers for Disease Control and Prevention focused on two specific types of expense associated with gun violence that their experience and access to data enables them to quantify: medical costs and lost workplace productivity. They estimate the annual cost of these two factors alone totals $48 billion.
- Total costs including the pain and suffering of gun victims and their families. The first 9/11 Victim Compensation Fundwas established to provide compensation for the World Trade Center and Pentagon attacks to survivor families and victims. The Fund replaced the litigation process that claimants would have resorted to otherwise and its settlements represent an approximation of what thousands of individual lawsuits for wrongful death or injury might have produced, with one significant difference. The ground rules for the Fund required it to deduct any collateral offsets like insurance payments that a victim or their family might have received. Applying the Fund’s average compensation figures to 67,000 gun injury victims and 12,000 gun murder victims and adding the value of collateral offsets, the total cost of gun violence is approximately $70 billion per year. (I’ve removed suicides from the gun death toll because they generally do not result in compensation and not to imply those lives are not precious to surviving friends and family or society.)
- Value of statistical life (VSL) used in policy making. Government agencies and policy makers utilize estimates for the value of human life to compare the costs and benefits of changes in social policy or regulation such as pollution limits or auto safety requirements. For example, the Department of Agriculture sets its VSL at $8.9 million; the EPA at $10 million. Some economists believe these figures are too high, but public outcry has generally met efforts to reduce them. Applying the low end figure of $8 million to 12,000 gun murders, the cost of gun violence is $96 billion per year (and we would still need to add the cost of gun injuries.)
Calculating the cost of gun violence is more than an academic exercise for economists. When you see that every year gun violence costs all of us three to six times the gun industry’s annual revenue, you understand why the industry has fought so hard to protect itself from legal liability. (The National Shooting Sports Federation, an association of gun manufacturers and sellers, reports a much higher figure of $50 billion for the gun’s industry’s total economic impact. Even this inflated estimate is not enough to pay for the economic losses due to guns and leave any room for the industry to make any money at all.)
The gun industry and its lobbyists will insist that guns actually save lives and are therefore a positive contributor to our economic well being. They will trot out flimsy studies backed by negligible data purporting to demonstrate all sorts of crimes being thwarted by armed citizens refusing to be victims. Even if their fantasy statistics are true, what are these citizens saving themselves from? Other people with guns. The gun industry and the NRA itself tell us that when they assert the only thing that stops a bad guy with a gun is a good guy with a gun. Weapons like knives or bats simply don’t do enough damage to justify the toll of gun violence. Only guns are dangerous enough to demand self-protection from other guns. In nuclear arms, this is called mutually assured destruction. In gun policy, it is certain death or injury for tens of thousands of citizens while the gun industry blithely claims the toll would be worse without their products.
The gun industry also likes to demonstrate its civic-mindedness by telling us how much it pays to the public coffers every year in excise taxes and federal and state business taxes. Maybe our elected officials should examine how we raise those taxes and what we do with the proceeds. By the National Shooting Sports Federation’s own generous estimate, the gun industry pays about $8 billion in taxes annually. Compared to the $50-$100 billion in economic damages wrought, that is a pittance. Actually a crime. The correct word is robbery.
The Parkland survivors have no 9/11 Victim Compensation Fund to support them. To date, their main source of economic support has been a GoFundMe campaign! Imagine if we raised enough in taxes on the gun industry to meet their economic needs. Imagine if we did that for every victim of gun violence across the country. Imagine that every time the Gun Violence Compensation Fund meets, it publishes its compensation decisions, and reports on the victims, their lives lost, their bodies maimed and injured, their own suffering, their family suffering, their dreams destroyed, their financial losses on top of everything else. Imagine if meeting the financial needs of this fund cost so much that gun manufacturers and merchants might actually care about where their weapons end up.
Yes, the gun industry will fight back. But increased taxes and a victim compensation fund are not subject to constitutional challenge in the same way that limits on gun ownership are. We would need to sort out where to levy new taxes, if they would be applied to manufacturers, sellers, buyers or owners, whether to make them one time or annual, and how to collect.
Until we stop the robbery, the gun industry and its supporters will have little incentive to worry about the impact of their product on the rest of us. They will continue operate as they please under the pretense they are positive contributors to society like any other productive business. We will have firms like Brownells masquerading as civic benefactors while we mourn the Parkland dead and wounded every year and hope that GoFundMe campaigns stretch to meet the needs of their families.