The market conditions for organ donors are already in place. We have the suppliers; in this case the donors, either dead or alive donating the organs. There are transplant teams who remove useful organs when the donors are declared brain death. ere are the specialized logistic carriers to arrange quick and conditioned transport. The hospitals take care of the “implementation” of the transplant and we have a group of customers, in this case the receivers. The latest group waiting on the donated organ to stay alive or at least have a chance on a better life. And off course the health insurance companies who are arranging all financial settlements between all involved parties. The problem in this market is scarcity of resources and in this context the organs can be called capital, where the product delivered is health. But the current market is heavily constrained by regulations and by all sorts of institutes supported by government laws. These laws are preventing the market to reach a natural equilibrium. Currently the supply and demand is not reaching this equilibrium due to the regulation in which the donor cannot be paid for his organs. Not by life and not after his or her death. The demand curve, under the abovementioned regulations, is perfectly inelastic and therefore a straight vertical line in the demand model (see figure A1 p.74 Introduction to Economics by Lieberman). This means that regardless the price the same quantity is demanded. The quantity supplied is due to certain laws and governmental constraints kept at an artificial low level. Due to the fact that the government is regulating the prices the current market can be defined as imperfectly competitive.
According to a lot of research done by human rights organisations there is an already existing market for human organs. This black market is according to these organisations already in place for decades. In countries like Brazil, China and India human organs can easily be bought. Here, money makes the world go around. This is a very doggy market where poor people still sell a kidney or a part of their liver for money to pay off their debts whatever they are. Another example is local hospitals selling organs after people died to create some extra income. Extreme examples of executed Chinese prisoners whose organs are sold are well none and are under investigation by the FBI. In this black market the demand and supply curve have found the equilibrium and there is price elasticity: if the price rises this is followed by an increase in the quantity supplied. In the black market the human organs behave as a normal good.
But there are groups who are against a free market for organ trading. They claim that our social values are fading and the only driver behind organ transplants will be financial rewards. Society and government should protect social justice, political freedom and other human rights to avoid exploiding the poor. Dr. Abdullah Daar, member of the Bellagio Task Force sees commercialization of the trade in human organs as a “fait accompli.” He states that labour is sold, sex is sold, sperm and ova are sold so why not human organs. And indeed we have accepted years ago to “buy” babies via international adoption so why not human organs. But in both black and regulated market there is a statistical proven movement of organs going from: South to North, from third world to 1st world, from poor to rich, from black to white, and from productive to less productive ¹. So beside cultural or relegious arguments they stress the need for registration an equal non-discriminative division.
In the current human organ transplant process an unnatural situation evolved where currently everyone gets but it is still illegal for the donor to benefit from it while alive. So while donors cannot legally be paid for donating organs, there is an active market for human organs that are benefiting already. Organ removal organizations collect organs from voluntary donors and then provide them to hospitals and these hospitals do the surgery. There might still be a shortage but to increase the quantity supplied the donor should be benefiting from the donation as well. The economic way to handle shortage of supply is to let prices rise to the market-clearing price ². With organs, it will work the same: diseased individuals family should be allowed to sell the organs to patients or hospitals that are willing to pay the right price. Without an incentive, either monetary or something else, the quantity supplied will not increase. A realistic suggestion is the possibility to sell the right on ones organs while alive if they are suitable for transplant at the time of the individual's death. So the answer to the question: “Is there is a perfectly competitive market for human organs,” is “yes.” The ethical question that remains is: how does the system of registration need to be set up to make sure that the right patient receive the right donor organ without looking at wealth or colour.
According to Mr Soros (Atlantic Monthly Jan. 1998) all markets are indiscriminate and tend to reduce everything including human organs to things that can be bought, sold, traded, and stolen.
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² Donald Boudreaux and A.C. Pritchard, "Organ Donation: Saving Lives through Incentives"http://www.mackinac.org/images.asp?ID=2482#824
