On Denying Market Forces vis-à-vis Supply and Demand

Here’s an interesting graph from AEIDeas:

What this illustrates is the outcome of the lack of a market for organs to be transplanted, in this graph, specifically kidneys.

As Mark Perry put it in his article [emphasis his],

While the annual number of kidney transplant operations has remained relatively flat since 2005 in a range between about 16,500 and 17,000, the number of registered patients on the waiting list continues to increase.  From about 65,000 registered patients in 2005, the waiting list for a kidney transplant has increased by more than 50% over the last eight years, and by 35,000 patients, to the 100,019 patients who are currently on the kidney waiting list.


We know from basic economic principles that congestion, shortages, and surpluses are always caused by a failure to apply market pricing.

Perry’s conclusion should be an obvious one:

The only realistic, long-term and truly compassionate solution to address America’s worsening kidney shortage is to legalize some form of donor compensation.  That would require Congress to amend the outdated National Organ Transplant Act of 1984 so that people who give kidneys could receive a benefit, perhaps a tax credit, tuition voucher, lifetime health coverage, or a contribution to a retirement plan.

Reasonable men can argue about the nature of the price to be offered, but the fact remains that a market is necessary—with a price to be offered for the good desired.  Indeed, with the price needing to vary with fluctuations in demand and supply, a government mandated “benefit” would seem still too suboptimal.  Let the market determine the price, in dollars.

Certainly such a market would be fraught with danger and need careful controls.  But the danger for those patients in the excess represented by the present 6:1 ratio of patients needing a kidney to patients getting a kidney—2013’s 83,000 more Waiting List patients than transplant patients—is greater.  And with an actual market, the risk of unauthorized organ harvesting—in the US, a small problem currently, but not insignificant to the victims—will go down markedly.

And there will be a sharp decrease in the number of excess patients.

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