Should you be able to buy a kidney? | The Gray Area

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About this episode Nobel laureate Alvin Roth argues that the universal ban on paying for kidneys creates black markets with poor … AI summary

Nobel laureate Alvin Roth argues that the universal ban on paying for kidneys creates black markets with poor medical care and drives up costs, whereas Iran’s legal market has eliminated waiting lists despite socioeconomic concerns. Roth proposes designing regulated markets with robust informed consent and government allocation to prevent exploitation, suggesting a pilot tax credit for non-directed donors as an immediate, self-funding step to increase supply and save taxpayer money.

Key takeaways 6

Market Bans Require Social Support: Bans on markets (like heroin or hitmen) function only if society supports them; otherwise, they drive transactions into unsafe black markets. In contrast, bans on hitmen have strong social support, while bans on heroin do not, leading to different enforcement realities.
Iran's Legal Kidney Market Outcomes: Iran is the only country with a legal kidney market, resulting in no waiting list for transplants. However, the market is imperfect: 78% of donors were below the median wealth level (2012-2017), and donors are not proud of their role, suggesting vulnerability and stigma.
Economic Efficiency of Transplants vs. Dialysis: Medicare spends over $55 billion annually on kidney failure care, mostly on dialysis. Transplantation is significantly cheaper than dialysis after the first year because it requires only cheaper immunosuppressive medications rather than ongoing dialysis sessions.
Market Design Can Mitigate Exploitation: The concern that only the poor will sell kidneys to the rich can be addressed through market design. For example, if only the federal government pays for kidneys and allocates them bureaucratically based on medical need rather than income, the risk of wealth-based disparity in receiving transplants is removed.
Repugnance vs. Trade-offs: The concept of 'repugnant transactions' (like paying for organs) often ignores the trade-off between moral qualms and saving lives. Roth argues that just as we accept trade-offs in other scarce resources, we must weigh the moral discomfort of payment against the death toll of the current ban.
Future Repugnance: Social norms around repugnance shift over time. Roth predicts that performance-enhancing drugs may transition from being seen as cheating to being viewed as part of nutrition or health maintenance, similar to how caffeine is accepted today.

Notable quotes 4 AI-generated: wording and quote attribution may be wrong. Use the play link to verify.

“The fact that it's so universally illegal to pay donors has in some cases driven those black markets out of the hospitals and into hotel rooms and apartments and places where you wouldn't want to have surgery done... So people who go to those markets get very poor medical care. Whereas in Iran, where it's legal to pay, apparently the medical care is good.”

▶ 0:00 Roth explains the negative externalities of banning kidney sales, contrasting unsafe black markets with the regulated (though imperfect) Iranian system.
“Money isn't the essential element of markets. The essential element of markets is that they aggregate information to try to get efficient and equitable outcomes.”

▶ 2:19 Roth defines his approach to 'Moral Economics,' emphasizing that markets are tools for coordination and information aggregation, not just monetary exchanges.
“I would expect there to be paperback books in airport bookstores with titles like the kidney donor sellers exercise and nutrition guide... there would be a waiting list to be donors rather than a waiting list to be recipients the way there is now.”

▶ 19:29 Roth illustrates what a successful, normalized kidney market might look like in the future, where supply exceeds demand.
“Transplantation is much cheaper than dialysis and Medicare pays for both. So it would save taxpayer dollars and it would allow us to see whether being more generous to these very generous donors would increase their supply.”

▶ 29:30 Roth argues that incentivizing non-directed donors through tax credits is a self-funding policy that benefits both patients and the government.