Moral Economics: From Prostitution to Organ Sales, What Controversial Transactions Reveal About How Markets Work

Nobel Prize–winning economist Roth (Who Gets What—and Why) delivers a stimulating study of morally contested products and services, such as abortion, assisted suicide, and marijuana. He refers to these as “repugnant transactions,” as they spark objections primarily on religious or moral grounds but don’t cause easily measurable harms to those seeking to ban them. Viewing these transactions as markets, or systems that can be designed to “allocate scarce resources efficiently and equitably,” can help people make progress on challenging topics, he argues. For example, analyses of legal prostiution show it can increase the market for paid sex but can also reduce rape and the spread of sexually transmitted disease. Another topic discussed is kidney donation. There is a nearly universal ban on compensating donors based on the concern that payments might lead to poor or vulnerable people being coerced into selling their organs. Meanwhile, there is an extreme shortage of donors, and loved ones are often incompatible with those they want to help (kidney disease runs in families). Roth and his colleagues designed a kidney exchange, in which incompatible patient-donor pairs exchange kidneys with other such pairs. Because no money changes hands, the problem of paying donors can be avoided. Bringing balanced, evidence-based analyses to emotionally fraught debates, Roth reveals the power of markets to inspire solutions. This is trailblazing. (May)