Embryos, cadavers, and market economics

In the controversial world of biotech, a new method of harvesting stem cells may make all the difference. As published in the recent issue of Nature, scientists have developed a way to remove individual stem cells from human embryos without, apparently, harming the embryos themselves. Many are speculating that by satisfying ethical concerns, this new method may allow government funding of stem-cell research.

This issue reminds me of several research projects going on at Harvard Business School (where I work when I'm not blogging) on the "market" for such things as embryos and organs. Examples would be the Body Worlds exhibition, organ donation programs, and infertility treatments involving donated oocytes. Of course, these are not really "markets" in many senses of the word - selling is prohibited and the use of economic vocabulary seems crass.

But, in a general sense, there really is both a supply and a demand for these things - and a pricing point. By refusing to allow them to be priced, we end up with more demand than supply, meaning that many people are left without the kidney they need or the ability to become pregnant. Another side-effect of our refusal to recognize these as "markets" is their tendency to go underground - note the accusations that some of the Body World cadavers seem to have come from Chinese prisons.

I'm not advocating that we should explicitly marketize the supply of organs, cadavers and babies - far from it! If tried this, we'd need to create new regulations and think through them very carefully - and we might well fail and make a mess of things. What I'm doing here is simply commenting on a general phenomenon that I find very interesting: how economic forces will creep around many of our regulations, revealing our stubborn denial of economics.

At times, perhaps, it may be more socially useful to recognize that market forces exist, and then find ways to harness economics (rather than defy it) to reach socially-desirable solutions.