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  • There are now over 300,000 Americans on dialysis. Every year, about 60,000 die. Kidney transplants

  • are hard to get, but hundreds of millions of Americans have a kidney to spare. The numbers

  • are heavily in our favor. The tragedy goes on year after year. Almost nobody wants to

  • do surgery to help a total stranger for free. And selling your kidney is illegal.

  • Voters, and the politicians they elect, have banned the trading of cash for kidneys. Why?

  • Because they underrate the social benefits of markets. They suffer from what I call anti-market

  • bias. People who have never studied economics often equate greedy intentions with bad results.

  • Economists share a standard objection to this bias. Thanks to competition, the surest way

  • to get rich is to make your customers happy. As the eighteenth-century economist Adam Smith

  • put it, It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard for their own self-interest.

  • Think about reviews on websites like Yelp. If you give your customers good value, they'll

  • come back and tell others to do the same. If you rip your customers off, they go elsewhere

  • next time and tell others to do the same. When customers are free to choose, firms can't

  • put profits before people. If they do, they lose their people and their profits.

  • Economists appreciation for markets leads us to unconventional solutions to all sorts

  • of problems. Take the kidney shortage. Most people would shrug that there are no more

  • kidneys available. But that's false. If just one person in a thousand donated a kidney,

  • everyone on dialysis could get one.

  • There's just one problem. Asking someone to give you a kidney is a huge favor, the kind

  • of favor that only people who know and love you will agree to do. Love already saves a

  • lot of lives, but it's clearly not enough. So why not legalize a market for human kidneys,

  • where people who desperately need kidneys could buy one from a willing donor?

  • Regardless of their politics, almost no one who isn't an economist sees merit to this

  • idea, and almost everyone who is an economist does. Some worry that low-income people would

  • be first in line to sell. But what's wrong with making poor people rich, and sick people well?

  • This doesn't mean that economists always favor unregulated markets. Unlike a typical voter,

  • though, economists rarely complain because business is making money by solving a problem.

  • Economists complain when business isn't making money by solving a problem.

  • When a market visibly isn't working, economists try to figure out ways to jump start markets.

  • In many cases, slightly different government policies would do the trick.

  • Take air pollution. Many economists turn to government because they can't figure out how

  • a person could make money by cleaning the air. But that doesn't mean you can't have market.

  • Liberal economist Alan Blinder promotes tradable pollution permits to cut the cost of reducing

  • pollution. Instead of telling firms how to cut emissions, government could cap their

  • total emissions, then let firms with spare pollution permits sell them to other firms

  • that are over their quota. Blinder says this would reduce the cost of cleanup by at least

  • 50 percent. When firms can sell their spare permits, they have a strong incentive to find cheaper ways to clean the air.

  • If markets can slash the cost of cleanup, why do voters resist the idea? Blinder blames

  • anti-market bias. The public seems to recoil in horror at the idea of selling the right

  • to pollute, as if even a small emission of a pollutant were immoral. There's always going

  • to be some pollution. As Blinder says, to think otherwise, is not to think.

  • When you can't imagine a way for business to make money solving a problem, it's tempting

  • to conclude that no one will ever think of a way for business to make money solving a

  • problem. Even economists, who pride themselves in their appreciation of markets, make this mistake.

  • If you went back in time to 1985 and described the Internet, most economists would have rolled

  • their eyes millions of free websites providing everything from directions to histories of

  • Germany. It'll never happen. Most economists would have been wrong, not because they had

  • too much faith in markets, but because they had too little faith in human imagination.

There are now over 300,000 Americans on dialysis. Every year, about 60,000 die. Kidney transplants

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B1 US kidney pollution economist solving market favor

Can Capitalism Save Lives? | Econ Chronicles | Learn Liberty

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