Life and Death Taboo: The Economics and Ethics of Financial Incentives for Organ Donations

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This is a transcription of the Ken Schoolland’s talk at the ISIL 2013 World Conference.
Transcription edited by Kenli S.

Just off the top of my head, I want to give an example from the previous topics that were up about medical care. My wife is from China. It was just twenty years ago when she was beaten very badly and sent to the hospital, which was actually one of the better foreign hospitals in China. The nurse was trying to give her an IV with a needle in her vein, and couldn’t seem to find her vein. My wife’s friend said “Have you paid her yet?” “Oh!” So, they offered her a bribe and then she found the vein for the IV right away.

My wife’s father was a physician, and during the Cultural Revolution they were all sent to the countryside. Her father refused these informal payments and so the administrator at the hospital always sent him only the worst terminal cases of patients, because, well, if you’re not going to accept payments why bother with someone who has a chance at recovery. Also, when he refused payments the patients got very angry with him. They said, well, you must not want to treat me very well if you’re not going to take the informal payments. Finally, he got disgusted and left, and came to the United States where he did heart transplant research.

I’m very pleased to be here today. Before I get into my talk I want to say something about ISIL. Most of all of you are family of ISIL. Those of you who are new, well I hope you will become family with the organization very quickly. We do a lot of things. Last summer we had a very fine conference, Asia Regional conference with ISIL that was organized by my wife in Shanghai. It was a great success. She also organized one in Bratislava and in Romania this summer with TFT events, which ISIL was supportive of.

We also had a presence at the Freedom Fest in Las Vegas this summer. We’re holding our conference now in Lausanne, as you may have heard. And, also we do a lot of other things. We support liberty camps around the world. One that is coming up next month is with the Armenian Students for Liberty; we’re supporting their program coming up.

We’ve had this summer, four years in a row, at North Eastern University, weeklong seminars at which Chris Lingle was a speaker and Jeff Crawford as well [present at the conference], week-long lectures talking about Austrian economics. We were actually invited by the Party Secretary at the university to come and teach all about free markets, just as long as you don’t criticize the government and stick to talking about the importance of free markets.

We’ve had liberty camps around the world for young people very often the earliest ones in Lithuania, but now they are in many more places. Jacek, who is with us here today, organizes these in Poland. And also through ISIL we support people like Tomislav Krsmanovic who right now is facing a great deal of harassment by the authorities in Serbia. We would like to have some letters of support to the authorities to give some attention to his case. If you want to get some information about that please contact me. You can see my brother Virgis Daukas there to your left of Tomislav.

Also I am very pleased that we’ve had, through ISIL, a very successful publication project not only of Mary Ruwart’s books, and our pamphlets series, but the university** edition of Jonathan Gullible, which is published by Terry Easton. We also have the commentary edition that was produced through Janette Eldridge, also an ISIL regular from South Africa. We have the new youth edition with full color illustrations and audio CD produced by Kris Haladus who has been here before. We have with us Kozeta Cika who published the second Albanian edition. Kozeta please raise your hand. Good. Thank you!

We’re also very, very pleased to have Adedayo Thomas, please raise your hand or stand up Adedayo, who wrote the play “A Letter from Jonathan Gullible” that is touring throughout Africa with a cast of 30 and reaching thousands. I’m really, really grateful, Adedayo, for all that you’ve done.

Also I just came back from last week’s launch of the new Dutch commentary edition; the second edition in Holland. In all, it’s been published in 48 languages, 73 publications worldwide, 3 plays, radio, and audio books, as well. So, please continue to support ISIL. Be part of the family.

Now today I’m talking about a topic that is, well, let’s say sensitive. I’ve never approached a topic that is as sensitive for people as this one. Even though this is a libertarian group, and we have a lot of common ideas, still there are a lot of very big issues involved with this. So, let me make my presentation about this, and please don’t throw anything at me.

Now this word ‘taboo’, in Hawaii the word is kapu. And kapu refers to a whole series of sacred rules and rituals that were mandated by the king. These meant that there were many things that were forbidden on sacred religious grounds for a lot of people. For example women were not allowed to eat most kinds of bananas. There were like 60 different kinds of bananas, and 57 of them were disallowed for women; as were coconuts and taro.

For the royalty, if you did not have your head lower than that of the king, if you wore feathers that you weren’t allowed to that were only to be worn by the king, if you looked him in the eye, these were instant death. Taboo, kapu meant if you violated these rules, threatening the royal stature and ordained by god, then you, of course, you were instantly put to death. It’s not a pretty picture, but it was a very common part of life.

Now, throughout history and throughout most of the world we’ve known that decisions and authority were made through the doctrine of divine rite of kings. Basically, it was based on the oldest of all determinants of power: who won in battle. It was then presumed that God was on your side and therefore you and your descendants always had the right to rule others as the father figure for the rest of the realm, until someone else came along.

The word Eminent Domain meant superior owner. The king was presumed to be the superior owner of everything and every person; had the power of life and death over other people.

Well, recently in the past 100 or 200 years that has morphed into another kind of purification ritual you might say. Authorizing some people the power of life and death over others and we call that the divine rite of majorities. A showing of hands, large votes, can often can make it possible for some people to make decisions for other people.

Of course on the other end of the spectrum are a lot of arguments. People who have been advocates of individual rights believe that people have the right to rule themselves regardless of what others say.

Now, to take this in to the realm of medicine, a very, very fascinating history of, let’s say, the discovery of blood transfusion. It wasn’t an obvious thing that you could just take blood from one person and help another. I mean Bram Stoker wrote about it in Dracula. You know some of the first innovations in this sort of thing were coming along, where he could rescue a woman who had her blood taken by the vampire. He was really talking about the stage of science at his time.

Long before him, people were starting to experiment on the use of blood transfusions. It was Richard Lower in England in 1667 that probably had the first successful transfusion. But, then such horror was raised in across Europe, in England, France, and Italy that any kind of work on blood transfusion was prohibited.

Now, the standard practice of medicine in those days was heroic therapy of medicine, where you bled people and you leech people, and you poison people to get rid of the demons in their system. That was the common standard ordinary thing. It was okay to let the blood go on the ground and destroy it. But, to transfer it from one person to another was a sacred violation because within your body was your soul and your soul was within your blood and to transfer it… there was something horrific about this. So it was condemned for 150 years.

Thus for 150 years there was nearly no additional experimentation or research, and so we did without until well around 1901. There were some experimentations before that, but it only became widely used just prior to and during WWI, when there was a tremendous number of carnage out on the battlefield. A lot of people dying for loss of blood and so there was a big demand for quick research and experimentation and the use of this to save thousands and thousands of lives. Also for pregnant women who lost blood at childbirth, and for people who lost blood in accidents.

There were all kinds of motives now and lots and lots of people were saved, from accidents and complications from pregnancy and various other surgical procedures, but what of the 150-year gap? We hear about the people that made the discoveries, but we don’t hear about the people that prohibited the discovery. I consider them sort of the villains, the people who stood in the way of 150 years of potential progress. And 150 years of saved lives that might have occurred, had blood transfusion been discovered and experimented on and developed much, much earlier.

Well, beginning in 1905, they did the first cornea transplant. By 1953 they did the first kidney transplant, and then it was a flood of additional things, heart, pancreas, liver, lungs, eyes, bone, and tissue for all kinds of issues. Before this when people had problems with these organs or with these parts of the body they just died. There wasn’t anything to do about it.

I researched my grandfather’s diaries from the late 1800s, and early 1900s in Holland, and his diary was filled with death and disease and suffering of people of all ages because there just were no answers. And now suddenly there were remarkable answers for a lot of ailments where people had potential for success.

And you know people who had skin transplants, people who are treated for severe burns, full faces had been restored to many disfigured people. I mean there was a woman whose boyfriend just got upset with her and he came up and shot her face off. She survived, but she was horribly disfigured. Recently, they’ve been able to use a transplant, a face transplant, from one person to another to make it possible for her to live a normal life. So, one donor might help anywhere from 200 to 400 people by restoring ailing bodies to health, sight, and long life.

Okay, now I’m going to do a terrible thing here and I’m going to use an economics graph that many of you may find a bad memory from your economics class that you had, talking about supply and demand and prices and quantities and that sort of thing. So, bear with me, and don’t worry, I’ll explain anyway what I’m getting to; even without the graphs.

On the left axis is prices, could be high or low; the quantity of kidneys or other organs; high or low. Initially, when there was medical research that made organ transplant possible, you could say well the demand curve was something like this. In economics we refer to this as having inelastic demand. People utilized whatever they could; they’d pay almost any price to be able to access these things. But, they didn’t have to pay a price so long as people were willing to volunteer to be kidney donors or organ donors. And at a zero price, you might find that maybe 10,000 people were willing to be organ donors. When medical research was at an early stage and not too many transplants could have been done.

Okay, Let me just ask by a show of hands, how many people are currently a registered organ donor? Okay, 1,2,3,4,5,6,7,8,9,10,11… Well, good. Now, as the medical advances occurred in which it made it a lot more available for a lot more kinds of medical transplants from one person to another.

Either for a live person, for example with kidneys, it can be a live person because you can live quite well with one kidney or with two, and if you wish to give one up to help someone else out, you may do so. And, for others the organs we’re talking about ones that, as they say in the profession, are harvested from people who died. Usually, teenagers or young people who have died in motorcycle accidents and so on, and many of their organs are very vital and useable, but they are dead.

So you’re given an option of whether or not to be an organ donor or not, upon your death. And when you specify that your organs can be taken for all these other benefits of people who are in need of organ transplants or eyesight or kidneys or pancreas, whatever.

Now in the market place if there aren’t enough organs that are available for free, the idea is well that if somebody is paying a little bit of money to sign up people to become organ donors, maybe there would be more available.

Well, let me ask you this question. Would you become a new registered donor now, if I gave you, let’s say, 500 Swiss francs? Now how many people would be willing to sign up right now, if I give you 500 Swiss francs, right now? One, two, three, four, five, six, seven, eight, nine, ten, eleven, twelve, thirteen, fourteen, fifteen… okay.

Well, we’ve doubled the number of people who would be registered. Some simply because well my organs aren’t going to be good for me at the end of life, why not give them to somebody else? And some people say well, I really didn’t consider it worth my while because if they’re not going to be worth anything why should I care? Ah, but, 500 Swiss francs might motivate me to say, well, sure, so otherwise they are just going to be fed to the worms; so why not just do this right now and get 500 Swiss francs?

Well, the nice thing about that is that propels the number of organs to be available.

Now, why is that an issue? That is an issue because well, right now, for kidneys and a lot of other things, the people who are eager to have kidneys are rapidly growing. Not only because medical science is getting so much more capable of doing this, but because a lot more people hear about it and know about it and because they can find out at an earlier time in their diagnosis, meaning they can have a more successful treatment.

So the people eager to be getting a kidney is tremendously increasing. While the number of people who are voluntary donors, those who have registered to be organ donors, is increasing, but it is not doing so at nearly the same rate. The number of people on the waiting list for kidney diagnosis is increasing three times faster than the number of people offering organ donation. That’s a lot of people.

That means that in the United States there are 88,000 people who suffer on the waiting list. They suffer as they do because they have to have dialysis, which is very expensive and uncomfortable. Their condition often deteriorates while they are waiting on the list, so even when they do get one they are less likely to survive it.

6,000 people die every year waiting on the wait list so that’s 15 each day. That’s just in the United States, not to mention the number of other countries that have this same problem around the world.

Now the reason for this shortage, I would argue, is because it is illegal to have a price to motivate people to become organ donors. In other words, at a legal price of $0 you can only be a voluntary donor. Only on this chart here let’s say 10,000 people may be offering, but may be 15,000 people are in demand. Well that’s a shortage, a tremendous shortage.

Now why is this shortage in existence? 88,000 people suffer on the waiting list with 6,000 dying every year, over the years since the National Organ Transplant Act of 1984. That’s at least, very conservatively, 150,000 US deaths since that act was passed.

It’s a felony crime to transfer any human organ for valuable consideration for use in human transplantation. 5 years in jail, a $50,000 fine, and you are a felon if you should try to motivate anybody else to become an organ donor. And this was sponsored by our Nobel Peace Prize Laureate, Senator Al Gore.

Well, I think it’s worth holding these guys accountable for what they’re getting in the way of, as well as for the scientists and researchers and medical people who are making heart transplants and kidney transplants all available and readily available, but inaccessible, for a lot of people because there aren’t enough organ donors.

This only applies to non re-plenishable organs. We don’t say you can’t pay money for blood; you can’t pay money for hair. I mean you can, you can pay money for blood, and you can pay money for hair and you can pay money for eggs, a woman’s eggs. In fact I have a student who was earning her way through college by going to Los Angeles every few months and donating some more eggs. She got enough to pay for her college education. Men, not their eggs, but their sperm, yes, that’s right, you can donate sperm. As long as they consider them re-plenishable, it’s okay. And everybody thinks that it’s fine. I mean, we’ve have become so accustomed to it; it isn’t taboo now to transfer blood.

Everybody expects that when you go to the hospital that there’s a blood bank there that’s going to be able to take somebody’s blood and rescue your life if you need it. In fact we all hope one day, even though we’re all quite healthy right now, one day that something may be available to us. But not for non re-plenishable organs and, of course, these situations are very dire.

I mean there was this case with this 10-month old girl who suffered an accident and she desperately needed a liver transplant. Another girl, a 10-year old girl, also needed a liver transplant, but, I’m sorry twelve year olds aren’t allowed on the waiting list, aren’t even allowed on the waiting list. Because these are adult organs lungs and livers and stuff like that, we can’t allow children on it.

Well maybe so, but when you get a shortage, you get this tremendous problem, well who gets on the list? How do they get up on the list? Mickey Mantle got way up above on the list because he was born and well known and famous. In Canada, somebody who was a politician got up on the list because he was influential and connected. But the waiting list creates all kinds of problems that are I think, raising the question: is it practical, such a law? Is it humane when you consider that 6,000 people are dying each year? No.

Are people concerned about 6,000 deaths? I think they are. People in the United States got rather concerned when 3,000 people died in the World Trade Center. They got very concerned about that. When only a few people lost their lives at the Boston Marathon, people were upset. Yes, people become concerned about lives in a certain context.

But what about the unknown, unnamed ones? Men, women and children suffering very, very long horrible suffering and misery that is unnecessary with this kind of legal condition. Does it really have to be taboo? Do we have laws about this sort of thing because of very, very powerful sentiments that we might have about organs, as they’re different from eggs and sperm and so on?

The economists at David Kaserman and A. Barnett, did a lot of research saying, well okay, if there are only a certain number of organs that are available at a zero price, then, at a zero price, what is the next one worth? What is somebody willing to pay for the next organ? Well in that case they say we come up with a black market price. For somebody the next organ can mean life or death.

So let’s ask ourselves, if it’s for your life or the life of a loved one, how much would you be willing to pay? Consider if it saved your life or the life of a loved one, or it saved you from long and miserable, nauseating suffering? Nauseating is usually the word that gets people. Would you be willing to pay say, $50,000 Euros? How many people would be willing to pay $50,000 Euros? Yes, a lot of people.

And the numbers go up. If you can’t get it, then there’s a huge demand out there for the people who say, well, it’s worth it to me to live and I’m going to sell my house or whatever is necessary. And also it’s an issue of great concern to insurance companies. Insurance companies know that it actually saves a lot of lives and money by having a transplant right now, rather than to wait on the waiting list, endless years with dialysis machines or with all kinds of other complications. And so insurance companies might say, okay, we’ll offer $500 dollars. Actually, David Kaserman and Barnett found that $25 dollars was sufficient to get enough additional organ donors to solve the whole current shortage.

I asked my students the same questions that I have here, and on average about 12% in my classes were organ donors. Then I asked them, would you be an organ donor if I paid you $25 dollars. Well, then the numbers rose to 65% of the class. Wow! Well the shortage is gone, but that’s illegal that would make us all felons if we did that.

Thus the market has a way of resolving this. Not for everybody, no one needs to do it if you don’t want to; no one compels you to do it. It just allows other people to do it, if they want to. And keep in mind, if the government can prevent you from offering a financial incentive from somebody else to become an organ donor, they can also through the show of hands, mandate it.

They can conscript whole people to go serve in the military, why can’t they conscript your kidneys? That’s for the public good. Why, the majority has said, we are going to give an anesthetic to you now and extract a kidney in order to give it to this other person. Why not, it saves his life, it’s a public good. So the same majority of hands that say you don’t own your life, but they can make decisions for you, can make decisions that could be even more cruel.

Now, Walter Williams is an economist who has argued that the same could apply to doctors and nurses and hospitals; they all get paid. Well, if you can tell somebody you can’t donate your own organ for a price; well then why stop at that? Why not just say; well doctors and nurses in a hospital will have to give their services for free, too. But imagine that. Very few people would expect doctors and nurses in hospitals to do much or care much about it if they had to do it all for free.

Walter Williams also says that it would encourage him to care more for his body. He says, “right now I’m a smoker and a drinker, because I know when my body is over, all this stuff is worthless. But, what if I know it’s a valuable part of my estate? It could be inherited by my children. Somebody’s going to pay me $50,000 dollars for my body parts. I’ll take better care of it, just like I take care of my house. I take better care of my house, if I know I can sell it and it’s a valuable part of my estate to sell it, to benefit my children. But if my house was going to be worth nothing when I died, why bother keeping it up? You know, just trash the place. If I die, let the house die.

Well, there are lots of people who have valid concerns about this issue. Does it exploit the rich? Does it create criminal incentives when you allow these things? Well, actually these things go on more so in the black market where the price is extremely high! You know when the price is extremely high people will go to a lot more extraordinary lengths and you know the mafia is much less concerned about the niceties of the contracts and so on when they go in and operate for very, very high prices in the black market. But if you provide a huge number of additional organs at a very low price, then the shortage disappears, the black market disappears as with all other prohibitive things. Things like drugs and so on.

Now here you see there are a lot of people who have sold their kidneys in other countries, but in a sense, I’d say they still have a right to do so because they are the owners of their lives. And it’s true, someone may exploit them; they may not provide them with all the proper information. But still, to prohibit them from doing something that they may consider is the thing that saves their children’s lives, or provides their family with a whole house or career or one guy in Brazil sold his kidney so that he could raise enough money in a political campaign to make the great changes in his country he thought. Well, at any rate a lot people have those options.

I’ve run out of time, so I’ll end by saying that the ethical consideration in my mind is that you own your life. If you don’t like the idea of selling kidneys, even accepting money to become an organ donor, you don’t have to do it. Each person chooses for themselves. But the usual divine right of majority says, not only can we decide it for ourselves, but we’re going to decide what everybody has to do. That’s where I feel like there’s a problem.

And it’s a life and death problem. You have to weigh it against the 6,000 deaths in the United States and many more people in other countries who have followed the example of the United States and passing these same kinds of laws. The one country, oddly enough, that hasn’t any restriction on the buying and selling of organs, which has eliminated the shortage and the death related to that is Iraq. Well that’s my comments and I think I’m out of time. Thank you.

See more videos from the Lausanne Conference
This is a transcription of the Ken Schoolland’s talk at the ISIL 2013 World Conference.
Transcription edited by Kenli S.

Ken Schoolland is President of the International Society for Individual Liberty, a member of the Board of Scholars of Grassroot Institute of Hawaii, and Director of the Entrepreneurship Center and an Associate Professor of Economics at Hawaii Pacific University. He is the author ofThe Adventures of Jonathan Gullible: A Free-Market Odyssey.

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