1. Welcome Teachers! The Ethical Foundations of Economics EconomicsWisconsin and Centers for Economic Education at University of Wisconsin-Milwaukee University of Wisconsin-Parkside Many thanks to our generous sponsors: John Templeton Foundation

2. Should We Allow a Market For Transplant Organs? Or... Dr. Norman Cloutier, Director UW-Parkside Center for Economic Education The Ethical Foundations of Economics December 5, 2007 Brother, can you spare a kidney?

3. Objectives Students will: 1. Describe the effects of a price ceiling on the market for kidneys available for transplant. 2. Analyze the effects of legalizing the purchase and sale of transplant organs. 3. Describe three main types of moral or ethical theories. 4. Use economic and ethical theories to evaluate four organ-transplant policies.

4. Kidney Transplant Background Both transplants and those seeking transplants have grown over time. Transplants 1990 10,000 2005 13,700 Most of this increase came from live donors. Waiting list 1990 17,000 2006 65,000 Reasons for the increase? –Technological advance. –Inability of the current system to procure enough organs.

5. Waiting list is not a complete measure of kidney demand. In 2004, there were 50,000 on the official waiting list, but 335,000 on dialysis. The median waiting time for people placed on the kidney transplant waiting list is more than 3 years. People suffer and die while waiting for a kidney transplant: 1990 1,000 people died 2005 4,000 people died

6. In 2004, 80% of living donors and recipients were related. The opportunity to buy and sell kidneys has the potential to save lives and improve the quality of life for many people.

7. The Demand for Kidney Transplants Has Grown Faster Than the Supply Source: Becker and Elias, 2007

8. Government mandated price ceiling of $0. Prohibition places a ceiling price on kidneys.

9. 20,000 kidneys supplied (donated) at P= $0 How many kidneys are donated at P=$0?

10. 20,000 kidneys supplied (donated) at P= $0 80,000 kidneys demanded at P= $0 How many kidneys are demanded at P=$0?

11. 60,000 kidney shortage What is the shortage, and what caused it?

12. What would happen if the ban on kidney sales was lifted?

13. Would a market in kidneys be fair to the poor? No! Poor are priced out of the market. Poor may be “coerced” into selling kidneys. Poor may not understand the risks. Yes! Sale would significantly increase the wealth of a poor family. Is it ethical to deprive the poor of the opportunity to increase their standard of living – and save lives? We allow markets in: blood, hair, and the use of a uterus.

14. Would a market increase the incentive for organ theft? Probably not. As opposed to prohibition, a market would make kidneys more available, lowering the price, making theft less profitable. A live donor market could eliminate the possibility theft. Under prohibition, what is the black market price of a kidney?

15. The Black Market price of kidneys?

16. Would there be fewer altruistic donors? S

17. Public campaign to increase altruistic donations? S

18. If it is obvious that a market would save lives, why don’t we allow it? AgentAction Consequences

19. Ethical Theories Outcomes-Based: Right Consequences It’s results that matter. Market would save lives. Duty-Based: Right Action Proscribed ethical principles should be followed. Is it right to treat your body as a commodity? Virtue-Based: Right Agent Intentions and personal virtues matter. What would a “good” person do?

20. Further Reading Becker and Elias, “Introducing Incentives in the Market for Live and Cadaveric Organ Donations, Journal of Economic Perspectives 21(3), Summer 2007, p.2-24 Howard, “Producing Organ Donors,” Journal of Economic Perspectives 21(3), Summer 2007, p. 25-36. Roth, “Repugnance as a Constraint on Markets,” Journal of Economic Perspectives 21(3), Summer 2007, p. 37-58. http://freakonomics.blogs.nytimes.com/2007/11/13/kidne ys-for-sale/#more-2089