Tag Archives: markets

Markets marketed better

What do you call a system where costs and benefits return to those who cause them? Working markets or karma, depending on whether the accounting uses money or magic.

In popular culture karma generally has good connotations, and markets generally have bad. Reasons for unease about markets should mostly apply just as well to karma, but nobody complains for instance that inherent tendencies to be nice are an unfair basis for wellbeing distribution. Nor that people who have had a lot of good fortune recently might have cheated the system somehow. Nor that the divine internalizing of externalities encourages selfishness. Nor that people who are good out of desperation for fair fortune are being exploited. So why the difference?

Perhaps mysterious forces are just more trustworthy than social institutions? Or perhaps karma seems nice because its promotion is read as ‘everyone will get what they deserve’, while markets seem nasty because their promotion is read as ‘everyone deserves what they’ve got’. Better ideas?

Dying for a donation

The most outstanding feature of organ markets is that most people hate the idea. This is a curiosity deserving a second glance. There are organ shortages almost everywhere, with people dying on waiting lists hourly. To sentence them to death based on a cursory throb of disgust is not just uncivilised but murderous.

First I should get some technical details out of the way. An organ market can involve buying from living donors, or selling rights to organs after death, or both. Organs needn’t go to the rich preferentially; like any treatment, that depends on the healthcare system. The supply of organs available won’t decrease – if free donations dropped as a result of sales, the price would rise until either enough people sold organs or relatives and friends felt morally obliged to donate them anyway. A regulated market needn’t lead to an increase in stolen Chinese organ imports. It would lower the price here, making smuggling less worthwhile, while stopping Australians going on desperate holidays to seek organs in the under-regulated Third World.

That they ‘commodify the human body’ is the main objection to organ markets. They certainly do that, but why is commodification terrible? Well, a commodity is generally an object subordinated to the goal of making money. Treating other humans in that way leads to abominable actions. Slavery and organ theft are examples of human commodification that rightly repulse us. This doesn’t generalise however. The horror in these examples is that people are being made miserable because they don’t want to be sold. This is a completely different scenario to people voluntarily commodifying themselves.

After all, if commodifying people is inherently wrong, why allow paid labour? Renting out a portion of your time, mind and body to a company or government is surely commodification in the same vein. Or is selling body parts just too much commodification? It doesn’t seem so to me – you can lose more of your most personal possession, your limited lifespan, working than you would selling a kidney. Regardless of how we personally answer that question, there is no reason for the public to decide where the line on commodification should be drawn rather than the people choosing to be involved.

Perhaps anyone who wants to commodify themselves must necessarily be insane and unable to make good choices. To decide that somebody with an alternative idea must not be of sound mind is a big step. The fact that someone disagrees with your opinions, especially ones without arguments behind them, hardly proves they are insane. To all of those who use their gut reaction of disgust to produce policy, Alex Tabarrok asks, “Is it not repugnant that some people are willing to let others die so that their stomachs won’t become queasy at the thought that someone, somewhere is selling a kidney?”

But can people in desperate poverty be considered to be making free choices? Many say no. So, is the choice between starving and selling one’s kidney really a choice? Yes; an easy one. One of the options is awful. To forbid organ selling is to take away the better choice. If we choose to provide an even better option to the person that would be great – but it is no solution to the problem of poverty to take away what choices the poor do have absent outside help.

A related argument is that even with better choices, poor people will be so desperate as to be irrational. However even if we accept that poor people are irrational, for anyone desperate enough to become irrational, selling an organ is probably a great idea. Given the ubiquitous human aversion to being cut up, poor people are more likely to underestimate the merit of that cash source. Should we intervene there?

Another argument regarding poverty is that organ markets are highly unegalitarian; they’re another way to exploit the poor. However, there are two inequalities involved in this market. People have differing amounts of money, and people have differing numbers of functioning organs. Which of these inequalities is worse for those with less? The most pressing egalitarian action would be to redistribute the organs more fairly. By happy coincidence the most effective way to do this is to simultaneously redistribute wealth as well. If poor people sell organs, all the better; the money is redistributed to them as organs are also redistributed to those with least.

The alternative to a market is ‘altruism’. If a brother needs an organ to live, how can you refuse? Unlike the disconnected poor person who benefits from an extra option, this family member loses their previous option of keeping both their organs and their family relationships. The latter are effectively held to ransom. This system leaves the patient with the stress of traipsing around making such awkward requests. Instead of loving support, they get to watch the family politics as everyone tries not to be left with the responsibility, everyone hiding their relief when their blood type is incompatible. Often people offer an organ, then ask the transplant team to judge them a poor match. This gets them off the hook, but leaves the ill person in a cruel cycle of hope and despair. It’s analogous to telling cancer patients ‘come for chemo on Tuesday’, then refusing them any every week till they die. If the patient is fortunate enough to find a donor, there is potentially the stifling lifelong obligation to them. People have refused organs over this. The troubling emotional dynamics surrounding ‘donation’ led Thomas. E Starzl, a great transplant surgeon, to stop doing live transplants.

My favourite argument against organ markets is ‘it will create a distopic world where an underclass exists to replace body parts of the rich’. This is flawed in a multitude of ways. Most people would be in neither category. It would create as much of a split as ‘people who make donuts’ vs. ‘people who eat donuts’. The exchange of money makes the parties more equal in the transaction than if one is the unfortunate victim of a request they cannot refuse. Individual people can’t be used as organ factories. Number of organs is a hopeless basis for discrimination, due to the effort involved in actually finding out which organs somebody has.

‘Altruistic giving’ is more coercive than a market, unnecessarily cruel to the patient, the donor and their family and friends, and leaves thousands to die on waiting lists. Organ markets can save lives without us having to sacrifice morality and should join the ranks of life insurance and money lending; markets we once thought unthinkable.

Originally published in Woroni.

Corporate ecology

Direct competition is resource intensive. Just to compete, species and companies have to invest heaps of energy in long trunks and roots, extra hunting and massive advertising campaigns for instance, instead of expanding or improving production. To avoid these costs they move into niches. Where there are multiple species or companies with very similar habits, one will eventually get an advantage somewhere and use it to get further ahead and outcompete the others. Consequently those that survive employ slightly different tactics and are spread between different habitats and markets. The fast food diverged from the fancy restaurants way back and nestled into more isolated markets. The fast food members have since emphasised their differences through differentiation of colourful plastic toys, varieties of hamburger and corporate identity, to appeal to different prey.

Companies can even evolve according to the prey’s preferences, their appendages growing beautiful but functionless layers of plastic and coloured cardboard, along with scents precisely attuned to attract passing shoppers.

All right, the mechanisms are half different (companies at least try to steer their behaviour, though I reckon natural selection comes in there to a great extent too). And the structure of the larger system is perhaps different (unless people are the decomposers, the production chain the trophic levels…yeah, whatev).

Markets are a kind of electrochemical cell

There are two processes taking place: adding and using up value from units. When everything is mixed together and these processes are happening in one place, they happen slowly (think of subsistence production by consumers). Separate them to their own containers and they happen faster (think production in factories and consumption in homes). The containers must be joined by a channel for units to move according to their value, and a wire for charges to balance that. The same value is removed from particles in one container as added to others in the other.

The extra energy pushing the charges and value laden particles between the containers can be used to run things like light bulbs and welfare systems. Alternatively it can be used to run a small heat to warm up the reaction, or an advertising industry.

While the charges can move around indefinitely, the particles eventually run out. Then it’s all over. With any luck/sensible policy the metaphor doesn’t continue this far.