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The Best Rationing System Requires No Rationing

Imagine you have two units of a valuable commodity, yet you only really need one.

You might want to keep both, so you have a backup should anything happen. On the other hand, you might decide that the funds you could raise by selling your spare are worth taking the risk that you might need it someday. But there is a catch. You can give away your extra, or even barter with it, but you cannot sell it.

This is the current state of kidney donation.

In the United States, there were only 14,000 kidney transplants last year, against a waiting list of more than 100,000 patients. Thousands of people die annually while waiting for an organ. Nor is the problem confined to America; the World Health Organization reported on the problem of a worldwide shortage back in 2007. It has only worsened since.

A variety of solutions to this problem have been proposed, many of which were touched upon in a recent editorial in The New York Times. These suggestions include changing from an opt-in to an opt-out system of postmortem donation; a more efficient system of allocating donated organs; covering the cost of living donations and offering living donors a variety of benefits after donating. But the most potentially effective strategy is the most controversial: repealing the law that prohibits the sale of human organs.

The law in question is the National Organ Transplant Act of 1984, about which I have written before in the context of egg donation. Eggs, sperm, plasma and blood can all be sold, even if some of them are routinely treated as “donations” in name, if not always in practice. Donors who give a kidney, however, cannot be compensated under the law.

The aversion to paying donors for organs seem to be driven largely by fears that the poor will be exploited. Supporters of the law, and of the logic underpinning it, argue that if organ transplants were overtly commercialized, the poor would be manipulated into donation against their own best interests. The logic is questionable. A woman is considered a hero if she chooses to give a kidney for altruistic reasons even if, or maybe especially if, she is poor. But the same woman becomes a victim if she is paid for what she has sacrificed?

In our current system, there are already individuals who are pressured to donate. Instead of the economically disadvantaged, however, the subjects of this pressure are family members of those awaiting transplants, and the coercion they face is moral rather than financial. Why is it inherently better that relatives, who can be but are not always the best tissue match for a patient, experience pressure to provide an organ even if they don’t really want to do so?

If a young woman refused to donate a kidney to her sister, many of us might consider her selfish or coldhearted. But who are we to weigh the considerations that might be on her mind? Perhaps the healthy sister has young children, who would be motherless if she became ill herself. Or perhaps she fears losing the opportunity to have children at all. First responders and those currently in, or contemplating, military service can be disqualified from their work or face limited opportunities for career advancement after donating, which could affect her reasoning. Perhaps the sisters are estranged. Organ donation is an intensely personal choice, especially for living donors, but the fact that there is no monetary component does not mean that decision is always made free of pressure.

The free market is ultimately about choice. It is about free people having the right and being empowered to make decisions about the best use of what they have. A poor man who lacks money for a reliable car to get to work might rationally conclude his life would be better if he added a car and subtracted a kidney. Why are strangers like us better situated to tell him what to do than he is to decide for himself?

Gary Becker and Julio Elias, economics professors at the University of Chicago and the Universidad del CEMA respectively, co-authored an opinion piece in The Wall Street Journal in which they argued that paying donors would not merely reduce the gap between supply and demand, but eliminate it entirely. This, in turn, would reduce the number of people on dialysis and decrease the organ waiting period dramatically, thus preventing most of the deaths that occur today due to organ scarcity. The authors also point out that the poor currently suffer disproportionately from existing organ scarcity, complicating the picture of their alleged potential for victimization in a commercialized system.

The moral aversion to paying organ donors is a great example of an issue considered in a vacuum. It is not only a question of whether poor people will be exploited or simply fairly compensated in a system where payments for organs are allowed. It is a question of whether other people, from all sorts of backgrounds, will suffer and die because of the chronic shortage of transplantable organs - a shortage that is only continues to become more acute. As Becker and Elias write, “Any claim about the supposed immorality of organ sales should be weighed against the morality of preventing thousands of deaths each year and improving the quality of life of those waiting for organs.”

All the nonmarket alternatives opponents suggest are simply arguments in favor of improvement to our current rationing system for organs. The best system is one where rationing is not necessary at all because the supply satisfies everyone. That system is called the free market.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s most recent book, The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book, Looking Ahead: Life, Family, Wealth and Business After 55.

The views expressed in this post are solely those of the author. We welcome additional perspectives in our comments section as long as they are on topic, civil in tone and signed with the writer's full name. All comments will be reviewed by our moderator prior to publication.

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One Response to "The Best Rationing System Requires No Rationing"

  • Amanda Nicastro
    September 16, 2014 - 11:06 pm

    I donated for my sister on 6-25-14. I’m curious as to why you don’t talk about paired donation programs in this article? I personally have heard more stories of people finding willing donors who were unfortunately not matches. It seems to me that a combination of Opt-Out or Mandatory Choice with increased paired donation programs at hospitals would also greatly alleviate the kidney shortage. Without having to ask families to dig into their pockets for more money that they don’t have on top of rising hospital bills and rising costs of anti-rejection drugs.