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The Market in Used Human Body Parts

Mises Daily: Wednesday, November 30, 1988 by

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"I do not think that the people in the medical industry are victims of the current law, but, rather, that many in the industry benefit from it. "

[Free Market, 1988]

In the March 1988 issue of The Free Market, Dr. Walter Block makes a solid case for a free market in human body parts. I agree with Dr. Block's analysis of the problems caused by governmental intervention into the market for used human body parts, and offer the following as an extension of that analysis.

The process whereby used human body parts are transferred from the original owner to the final owner consists of two exchanges. And, while the law prohibits a free market in one of these, the law allows a restricted market in the other. There are three parties involved: the original owner of the part (hereinafter, specifically not referred to as the "donor"), the medical industry, and the final owner (the recipient, hereinafter, specifically not referred to as the "donee").

In the first exchange the original owner transfers ownership to the medical industry. This is the exchange for which a market process is prohibited by law. Therefore, the only way the original owner of the part may transfer ownership of it is as a gift.

In the second exchange, the industry transfers ownership to the recipient. This is the exchange for which a market, although restricted, is allowed. For although the medical industry is not allowed to sell the part, qua part, it is allowed to, and does, sell the whole package of absolutely essential complementary services. That is, the medical industry does not give away the services of the labor and complementary capital goods necessary to the transfer, and the recipient does not end up with the new part integrated into his body at no charge, although such charges are frequently picked up by others.

What in fact takes place is a tie-in sale, whereby the seller(s) of the part, the particular individual(s) in the medical industry in whom the choice of the recipient is vested, requires the recipient to purchase a particular set of complementary services of labor and capital goods, if the recipient is to be able to acquire the part.

This practice may well violate the antitrust laws, not that the free market should be subjected to such, only that they do exist. And, if ever a case may be made that previous intervention, however unwarranted and harmful, justifies subsequent remedial intervention, a tie-in sale where the primary good (the body part) was, in effect, stolen, may well be it.

For my part, I am inclined to think that the total price of the whole package of doctors' and hospital services includes at least a part of the (shadow) price of the body part, if not its full value in a free market process. That is, I believe that the de facto owners of the body part after the initial nonmarket transfer do, in fact, sell the part as an element in the tie-in sale to the recipient, granted that it might be at a price (for the part) less than the free market might generate.

I do not think that the people in the medical industry are victims of the current law, being forced to make difficult choices on the basis of their own subjective values, but, rather, that many in the industry benefit from the current law.

The proof of the pudding will come if, and when, an attempt is made to change the system to a free market process. Similar to the opposition of those engaged in the illegal drug trade to the legalization of such drugs, I would expect those members of the medical industry who profit from the current system to oppose efforts to create a free market in body parts.