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I have my students write papers on the intersection of markets and some sticky ethical questions. Should parents be permitted to sell their babies? If you allow a market in kidneys, would it be permissible for a purchaser to use it as wall decoration or a lawn ornament? And so on.

Let’s be agnostic about all of these issues for the time being, I just wanted to illustrate a common argument made by students against legalizing the sale of various things like babies, body parts, and themselves (prostitution for example). Students argue that by allowing a market in these things it is exploitive not just because the poor cannot afford those things (that is a discussion for a different day), but because the poor are “forced” to sell these things (or at least there are more pressures on the poor to sell them than the non-poor).

What to make of such an argument? I think three or four points stand out.

  1. Allowing for the sale of something that is currently not legal is adding to the options of a poor person. In a world where kidney sales are illegal, the poor have a choice of “selling one” for $0.00 or selling one for $10,000 or whatever price would prevail. Isn’t exploitation defined by limiting the actions of people? If the poor do wish to sell their kidney in a world when it is illegal, aren’t there even stronger incentives for them to sell than when there are not free markets? Why is that? Because when the legal sale of organs is prohibited, the black market “price” of a kidney is likely to be much higher than when there is an open market. Yes, the transactions costs of getting the kidney sold are higher and it is probably more dangerous to sell one, but the financial gain from selling is larger in a black market. Wouldn’t that put even more pressure for the poor to sell?
  2. Suppose we take the exploitation argument seriously. The poor are too poor to make good decisions about whether to sell a kidney and they are also too stupid to know the right questions to ask – and suppose you are comfortable with that position. Would you permit a kidney market if we had a rule with it that required any seller of a kidney to have an annual income of at least $60,000 or to have a minimum net worth of $200,000? Do you think the poor would find this fair? What about you? I am sure we’d see more than a few discrimination suits follow from such a law. But that law would overcome the exploitation problem, wouldn’t it? If your objection to markets is that the poor are forced to sell, then simply prohibit them from selling! Ask yourself what consequences would arise from such a rule.
  3. Suppose I take your argument seriously about the poor. Why does this argument apply here to kidneys and prostitution, but not to virtually anything else that people might sell? Isn’t it the case that the poor have more pressure to sell ANY valuable asset they own? Would it be good policy to render valueless anything of value that the poor own? Or would it be good policy to take away anything valuable from the poor so that they don’t do something stupid like liquidate it and realize its cash value? Seriously, if a poor family owns a house, why wouldn’t they sell it just to make a quick buck just like you claim they would a kidney? And yes, I know you have two kidneys, but a poor family could go rent a slummy apartment somewhere if they sold the house – that’s the analog of leaving yourself in slummy health. Do you wish to go so far as to take these assets from the poor?
  4. What is different about selling a kidney or your body from otherwise working in the labor force? Is not the argument above (that the poor are exploited because they are forced or more likely to sell their assets) even more true when applied to the “normal” labor market. “The poor have low or no income. They should be willing to do anything just for a buck” so say the anti-kidney sellers. Of course, but does that not apply to “doing anything to earn an income legitimately?” Should we therefore make the selling of labor services illegal for all people just because there would be more pressure on the poor to work if it was legal to do so? This makes no sense. In fact, isn’t it incredibly desirable to have the poor react more to this “pressure” to sell when it comes to labor services? And don’t people argue that the poor are not sufficiently incentivized to do this? So how can it be the case there the poor have a large incentive to inflict pain on themselves to sell a kidney, but have little incentive to provide more formal labor services? Please do enjoy getting out of that pretzel.
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3 Responses to “Markets “Force” The Poor to Sell Things”

  1. Harry says:

    I’d raise my hand and ask everybody what it means to be poor.

    If you live in Bangladesh and just survived the last typhoon with only the clothes on your body, and are hungry with little prospect of living the next day, you are poor.

    If you live in America and are down to your last nickel, you are not poor, and the poor in Bangladesh would gladly trade places with you.

    Now, if you are not merely down to your last nickel, but are under water in your mortgage, you are in trouble, and selling your blood to the local blood bank will not do it. One option is to go to the library and use the computer to write your senator or congressman to pass legislation that will cancel your debt, give you free health care, and give you a stipend or a government job that does all three, plus give you free broadband internet access.

    “Would it be good policy to render valueless anything of value that the poor own?”

    This is the prevailing view, at least among our lords and masters. Then they will assure us all of sustenance and not force us into selling our extra kidney or prostituting ourselves.

  2. KevinH says:

    I’m all for selling organs, with moderate safeguards, but your arguments are really lacking here. I’ll go through my thoughts on each of your points

    1. This is really paradoxical. If your saying a black market allows for higher price, then keeping it illegal should be beneficial to the poor, and in fact give them more ‘options’. Conversely, if you think that legalizing helps the poor, you must maintain that the value to the poor is less in a black market than a free one.

    2 is great example of Reductio ad absurdum. It’s a logical fallacy. just because you can propose an absurd extreme doesn’t bear on the choice before us.

    3. It wouldn’t be taking the asset away, it would be making the asset illiquid, which is not the same thing. There are all sorts of reasons you might want to freeze the asset of individuals at least temporarily. Pyramid schemes and other cons are a perfect examples. All pretty much rely on asymmetric information, which could form a perfectly valid argument for preventing organ sales.

    4. This is actually pretty good for that specific argument, but I feel like it’s mostly a straw man argument. Perhaps your kids do actually come up with this one, but it’s not argument I would choose.

    I’d say the biggest barrier to efficient and moral organ markets is the idea of asymmetric information I brought up in point 3. Even just for efficiency, and efficient pricing, you need a fairly high level of good symmetric information.

    Morally, a lie by omission is still a lie, and we would not abide exchanges where a party directly lied about the exchange. I think it’s reasonable to assume that this is an area where the poor could easily get some bad information about the long term effects of organ donation. Then it comes down to if you think you can ameliorate that lack of information in the poor (and even really, anyone who isn’t a doctor or has lived with someone with a single kidney). I think that you probably can fix the major issues with some decent counselling services (which would be the bulk of the ‘moderate safeguards’ I alluded to), but I’d be at least willing to hear an argument that the gap couldn’t ever be made up.

  3. Steve says:

    Kevin, I think you’re off base with your point by point criticisms

    1. The overarching argument that the post is addressing is that it is immoral to legalize the sale of kidneys because it exploits the poor. The act of creating the legal market will harm the poor. However, by reminding us that there is already an even more lucrative return to donating a kidney on the black market, legalizing kidney sales will actually reduce the financial incentive to give up a kidney.

    2. Again, the proposition being tested is that the poor would be exploited by the legalization of kidney sales, and thus be made worse off. Kevin, by asserting that it’s a reductio ad absurdum, you concede that the proposal to simply limit sales to those with high incomes is a bad outcome because it is unfair to the poor. Thus, you also implicitly concede that there is no exploitation by legalizing kidney sales.

    3. Why do kidney sales necessarily entail asymmetric information? It is impossible for a kidney seller to understand the risks of his decision?

    4. I wasn’t a big fan of the 4th argument either.

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