Friday, July 14, 2006

The Market For Organs

Not organs or pianos but spare hearts, kidneys and lungs:

On Fox News' Your World, ABC anchor John Stossel advocated the legal sale of organs, citing the fact that "hot dogs don't spoil when we get to them" as evidence that "the market figures out ways to make these things work."

Claiming that "we have no shortages of anything else that faces the open market," ABC News 20/20 co-anchor John Stossel, on the July 13 edition of Fox News' Your World with Neil Cavuto, advocated the legal sale of organs. Responding to Cavuto's concerns that some organs "might not be safe," Stossel cited the fact that "hot dogs don't spoil when we get to them" as evidence that "the market figures out ways to make these things work." Despite Stossel's earlier assertion that "I have two [kidneys]; I only need one," he was noncommittal when Cavuto asked: "Would you give me a kidney if I needed one?" Stossel said he "would consider" it. Even when Cavuto suggested the offer would be high, Stossel responded: "I don't know, we'll have to talk later."

Stossel also made this comment which shows that he never passed Economics 101:

CAVUTO: But how would you -- yeah, OK, good, we got that covered, John doesn't believe in murder. Would there be a limit to this, though, or risk to this? In other words, would you be getting organs that might not be safe, that might, might have a whole lot of problems? Or those who are suffering from AIDS, and you're getting an AIDS contaminated --

STOSSEL: But the market takes care of these things all over the place. We don't get hot dogs --

CAVUTO: You love the markets. It's what you believe from --


CAVUTO: You're a libertarian.

STOSSEL: It took me too long, but also, a consumer reporter who was hostile to markets, until I saw, wow, you know, the hot dogs don't spoil when we get to them. You know, there's all these greedy people selling them, the meat could be bad. But the market figures out ways to make these things work.

Such a touching trust he has in the ability of the markets to "make these things work". Too bad that the markets are not a libertarian god who can put all things right. Too bad that there are very specific reasons which explain why the market for hot dogs tends to work fairly well, now that we have government-decreed meat inspection systems, too bad, because these same reasons also explain why markets for transplantable organs wouldn't work very well at all.

Let's set aside all the moral questions for a while and let's first concentrate on Stossel's argument that having a legal market for organs would make more of them available for those who desperately need them. Doesn't this look like a possible outcome? Perhaps. But think of the related question of blood donations and the selling of blood. When countries or areas have allowed blood to be purchased a curious thing happens: donations of blood go down. Why bother to donate if other people are selling their blood for money? Most people who donate blood wouldn't sell it if that alternative was available. Donating blood is not that pleasant and can't be done frequently enough to make it into a paying occupation. The reason people give blood is because of the good feelings this offers. But these good feelings disappear if others are getting paid for their blood.

All this means that the increase in the number of organs that Stossel speculates markets would create might not be that great. It might not even be an increase, depending on the actual responses of those currently thinking of donating an organ. But there is a worse problem than this with Stossel's arguments, and the blood example helps us to see it: the quality of purchased blood is lower than the quality of donated blood. Purchased blood is more likely to be tainted with diseases. Why? Because selling blood is a rotten way of making money. Only the most desperate are willing to do this on a regular basis, and these people are more likely to be poor, malnourished, drug-users or alcoholics. Sold blood can be screened, of course, but the screening itself is expensive.

The same problems are equally likely to crop up in any markets for donated organs.

Then there are the equity concerns. Think about the market for kidneys. (It has the advantage of leaving the seller of one kidney alive, which allows me to ignore the question of how the organs are going to be harvested for just a little while longer.) Suppose that the market price for a kidney was set at, say, 30,000 dollars. What types of people would choose to sell a kidney in such a market? Wouldn't they be the poorest ones, the most desperate ones, the ones who can be most easily bullied into the transaction? Wouldn't these donated kidneys largely come from the poorest countries in the world, from places where living on one kidney is actually the most dangerous?

But I understand that Stossel doesn't care about the fact that markets are not at all good at equity or other concepts of fairness, except purely accidentally. He is only interested in the efficiency gains. I bet he would think a market for human slaves would be efficient, too.

And this brings me to the harvesting of the organs in a market-based system. With very few exceptions, the organs for transplanting are only available when a person dies. Suppose that the market price for a still-beating heart was set at a million dollars. Imagine the "markets" that would be created to supply such hearts. These would be illegal markets, true, but then we have such markets today for cocaine, say.

Or imagine the incentives for estranged relatives to speed up the death of someone who has signed up for organ transplantation schemes. Just imagining all this should tell you why people would not sign up for such schemes very often, and Stossel's markets would be severely undersupplied without the illegal harvesting operations. These are already rumored to exist in some countries, but their scope in Stossel's world would be quite different.

To make you feel uncomfortable, the market of hot dogs isn't really that different from what I have been describing, if we take the pig's eye view of things. It's only because we don't allow pigs to decide if they want to donate organs to us or not that the markets can be viewed as such a success. There.