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The economic system is a solution to scarcity.
In fact, money, as a system, is a solution to scarcity.
Fundamentally, the world does not have enough of what people want so we’ve created this
system to allocate things.
If everyone in the world were offered a pineapple, free of charge, nearly everyone would probably
take that pineapple.
If everyone in the world were offered any resource, in fact, they would probably take
that resource.
The problem is, the world doesn’t have enough pineapples—there’s a limited supply.
There aren’t enough pineapples for everyone, so the market economy, at least in theory,
matches them to those that want them most—those that will give up enough money to get that
pineapple.
Simultaneously, though, this system motivates people to produce more of what is scarce since
they get paid.
At a fundamental level, whenever something needs to be allocated, it is monetized.
This system does, however, have its flaws.
How much someone is willing to pay isn’t perfectly correlated to how much they need
or want a thing.
In the purest form of this system, every participant would have the same amount of money and the
same ability to pay so that what they would offer for a scarce resource would perfectly
correlate to how much they want it, but that, of course, is not the case.
In the real world, some people have more money than others and so this system breaks down.
One poor person might really want a pineapple and offer a full percent of their money to
get it, but a rich person with eleven times the money might sort of want a pineapple and
offer 1/10th of a percent of their money to get it, and they will get the pineapple.
In this circumstance, the market system breaks down as the person who wanted the pineapple
less has received it.
The overall social good is not maximized.
Collectively, though, we have decided that perfect is the enemy of good and that a certain
level of inequality is ok, especially as, according to some, it motivates people to
create more value.
Now, inequality in the pineapple market is somewhat unfortunate, but ultimately not a
huge deal.
In other markets, though, human ethics have decided that a monetized market system, with
that one, fundamental flaw of inequality, would be wrong.
When the allocation of a scarce resource means the difference between life or death, when
whether a person gets something is that important, a market system’s inequality is perpetuated
because people’s willingness to pay is infinite, it’s not proportional to how much they need
or want a thing, and therefore, it will always go to who has more money.
That is the issue with organs.
In this case, allocation needs to happen a different way.
Every nine minutes in the US, a doctor makes a life-changing conclusion about their patient.
They determine that that individual, and their condition, has progressed to the point that
they will not survive without an organ transplant.
As soon as that happens, the individual is placed into a nationwide system that works
to balance societal utility and human ethics to match organs to those that need and deserve
them most.
The core of all issues related to organ transplantation is the fact that there are more people waiting
for transplants than there are organs available.
Just like pineapples, iPhones, or anything in the traditional economy, there are less
of it than people want of it if the cost was zero.
In the US, 112,000 people are on those lists, whereas only 39,718 transplants were actually
performed in 2019.
This means that patients often have to wait years for a new organ.
The exact time, though, varies dramatically depending on a number of factors.
Patients with the most severe and urgent form of liver failure, for example, only have to
wait a median of six days whereas a patient at a lower priority for a heart transplant
would wait a median of 726 days.
Now, when every name on that list is quite literally on the precipice between life and
death, fairness is tough.
Each country's transplant lists works slightly differently, but most work fairly similarly
to the US’.
There, much of an individual’s position on the list is based on how much use they’re
going to get from the organ.
Kidney’s, for example, are the most commonly transplanted organ out there, and in the US,
the major determinant for those on the waiting list is their “Estimated Post-Transplant
Survival” score.
Essentially, one wants to give an organ to an individual for which it will provide the
most additional years to their life.
For example, a 30 year-old who has not had dialysis, does not have diabetes, and has
never had an organ transplant before would have an EPTS score of 2%, one of the highest,
meaning their chances of surviving ten years post-transplant are above 90%.
Therefore, they would be at the top of the list, eligible to receive a kidney from the
highest-quality tranche—expected to function better than most other donor kidneys.
Meanwhile, a 70 year-old who is on dialysis and has Type 1 diabetes would gain an EPTS
score of 89%, meaning their 10-year survival outlook is less than 50%.
Therefore, they would only be offered a transplant after all matches with a greater outlook are.
Within these tranches, based on the EPTS score, further ranking is done based on other scores
and waiting times.
Now, the list itself is certainly not just thousands of names, ranked from one to 90,000,
waiting their turn for the next available organ.
It’s an incredibly complex system mixing factors including geography, compatibility,
necessity, and more.
Kidneys themselves are unique among organs in that the human body has two, and, for the
most part, individuals only need one.
Therefore, an individual can donate one of theirs and be at only a very slight increased
risk of kidney failure or other complications long-term.
That is the living-donor route, but the vast majority of kidneys still come from deceased
donors.
However, while 54% of Americans are registered as organ donors, individuals have to die in
a very specific way in order for their organs to be eligible for donation.
They typically have to either have a terminal condition where they are removed from life
support in a controlled manner, or suffer from brain death, where the organs continue
functioning while all brain function have ceased.
This specificity of mortality contributes to the scarcity of organs since, even after
one of these scenarios happens, one has to consider the compatibility, health, and eligibility
of the donor organs.
It also means that the best organs, those from young, healthy donors, are even rarer
since they are less likely to die in such a controlled manner.
So, this system of allocation through a non-monetary system is designed to appeal to human ethics,
designed to work to match kidneys based on need, not ability to pay, but it too has its
flaws.
The root cause of this is around the way the surgery works.
Kidneys can only survive outside the body for 24 to 36 hours without significant deterioration,
so once one becomes available, surgery has to happen fast.
Therefore, for the purpose of matching, the US is split up into eleven regions, and these
regions certainly aren’t all created equal.
For example, region 3, comprised of Arkansas, Louisiana, Mississippi, Alabama, Georgia,
and Florida, donated 4,055 kidneys in 2019 whereas region 9, comprised of New York state
and western Vermont, only donated 1,564 in the same year.
That’s despite the fact that the population of region 9 is about 45 million while the
population of region 3 is 20 million.
Now, the root cause behind this disparity is fairly obvious.
The states that make up region 3 are part of what’s known as the “stroke belt.”
That’s because the population of this region is far more likely to suffer from a stroke
than the national average.
Strokes are a potential cause of death quite conducive to organ donation as they can often
lead to brain death.
Now, organs donated in a given region are first offered to those listed in that region—after
all, the recipients need to arrive at the hospital in a matter of hours.
Therefore, as region 3 has more organs available, the median waiting time for a kidney, and
many other organ types, is far shorter here than in region 9.
Interestingly, the rules in the US do allow those that need a transplant to list themselves
in multiple regions, as long as they follow all the other rules the same as someone living
in that region.
That means that they still need to go through all the testing ahead of time at the local
hospital, and then need to report to that hospital in time once they get the call that
an organ is available.
When Steve Jobs received a liver transplant in 2009, for example, he did so in Memphis,
Tennessee—far from where he lived in California.
Tennessee is also considered as part of the stroke belt, and therefore the transplant
region it is in, 11, has shorter wait times.
Of course, wealthier people, such as Steve Jobs, are able to do things like fly in a
private jet to get to the transplant hospital in time, and he even bought a house in Memphis
to stay in during his recovery.
It’s no wonder why there is such a strong positive correlation between patients listing
in multiple regions and income levels.
This system certainly perpetuates inequality, but the alternative is that a patient in New
York is punished for the fact that their region is healthier.
So, overall, the organ transplant system does not solve inequality, but only reduces it.
Simultaneously, though, it does not have a mechanism to solve the issue of scarcity.
The traditional market economy solves scarcity by paying people more money for what is in
high demand, therefore, in theory, bringing things to an equilibrium, but this system
has no way to to increase supply when demand is higher.
So, the current system is not perfectly ethical, and it also potentially exacerbates the shortage,
so that has led some people to ask, what if we just used a normal economic market for
organ allocation?
That is what happened in Iran.
Previously, the waiting list for kidneys in the country exceeded that of almost any other
nation due to political instability and cultural stigma against organ donation.
However, in 1988, they implemented a system where recipients could pay donors for their
organs.
Typically, the donor receives a fee of around $4,500, equivalent to more than half a year’s
salary, in addition to free health insurance for a year.
Now, this isn’t a truly free market—it is highly regulated and managed—but reports
indicate that it has had some success at solving the scarcity problem.
In the years after this program was implemented, organ donations skyrocketed and, apparently,
there is no longer any waiting list in the country.
That is quite a success compared to a country like the US where thousands die each year
waiting on a transplant, but opponents argue that the negatives are just too severe.
When you commoditize organs, and especially kidneys, where humans can donate one and live
using the other, you incentivize desperate individuals to sell theirs.
Meanwhile, you make it even harder for poorer individuals to receive an organ transplant
as they can be priced out.
Overall, an open organ market increases inequality, but also increases the number of transplants.
In the end, that means there are two basic choices: saving more lives, but in an unequal,
unfair manner, or saving fewer lives, but assuring a greater sense of fairness.
Most countries have decided that the second option is better—they are potentially dooming
some to die in the mission of assuring that what determines what gets you an organ is
how much you need it, not how much you can pay for it—but there is increasing pressure
in many places to stimulate supply with compensation.
This is a situation where no solution is perfect—you can’t have a perfectly abundant supply,
and you can’t have a perfectly fair system, but you can get close to fair or close to
abundance.
Inequality is just part of a monetized system, so even though economics is an incredibly
powerful tool for allocation, it must be used carefully in the cases where the stakes are
truly life and death.
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