Jeffrey Alan Miron

Trade in Human Organs

Debra J. Saunders, a syndicated columnist, writes about the black market in organs:

Two years ago, the New York Times ran a story about a 48-year-old Brooklyn woman who, facing death after years of dialysis treatments and failing health, received a kidney from a Brazilian peasant who was paid $6,000 for the organ. The chilling story bared the human misery that surrounds the black market on human parts. Some donors faced ill health and even (unlike the recipients) prosecution. The kidney recipient talked to the Times reporter, but felt enough shame that she did not want her name in the newspaper.

Last week, the San Francisco Chronicle ran a story by reporter Vanessa Hua about a San Mateo, Calif., man who flew to Shanghai and paid $110,000 for a liver -- with nary a thought about human-rights activists' contention that China has executed prisoners in order to harvest their organs. Not only was Eric De Leon's name in the paper, he even has a blog about his Shanghai transplant. The man clearly is not ashamed.

Saunders seems to disapprove of those who have purchased black market organs.  Her revulsion over the sale of organs from executed prisoners is understandable, but she fails to draw the right policy conclusion: legalize the purchase and sale of organs. 

Legalization would vastly expand the supply of organs available for transplant, helping millions of the sick and dying.   And legalization would vastly diminish the kinds of abuses that Saunders decries by permitting private and/or government oversight of organ sales.

A History of Gas Prices

This graph is interesting.  Gas prices are now high in real terms, but they are not unprecented by historical standards.  Observations for the past few weeks, which are not included in the graph, might make current real prices almost equal to the maximum in this sample.

Disaster Insurance

A story in the Washington Post says that many private insurance companies are withdrawing from coverage of coastal and earthquake-prone areas due to revised risk assessments.  This means homeowners are switching to insurance plans subsized by state governments.   

The insurers, the state governments, regulators, and some academics are calling for more federal subsidies for state and private insurance.

The right policy is instead for federal and state governments to withdraw entirely from providing or subsidizing disaster insurance.  Any new federal involvement is particularly insane.  It will further encourage homeownership in areas prone to disasters, and it will create major financial liabilities for the federal government.   The taxpayer will ultimately pay the costs when future Katrina-like events occur.

Let homeowners pay the full cost of private insurance if they wish to live in disaster-prone areas.  Only then will homeowners appropriately balance the benefits againsts the risks.

Redistribution: In Cash or In Kind?

Should government anti-poverty programs transfer income in cash or in kind? 

Transfers-in-cash means programs like welfare or the Earned Income Tax Credit; these provide unrestricted income that recipients can spend as they see fit.  Transfers-in-kind means programs like food stamps, subsidized housing , Medicaid, or public schools; these force recipients to spend their income transfers on the particular goods the government dictates.

The argument for cash transfers is that the needs of recipients vary, so recipients can benefit from choosing how best to spend the income they receive.  The argument for in-kind transfers is that some recipients might spend cash transfers unwisely.

My view is that cash transfers are better overall.  Cash is unambiguously better for households that make good use of the flexibility.  And the households tempted to misuse this flexibility are not readily manipulated by government restrictions.  For example, such households can choose bad neighborhoods, or fail to encourage their kids in school, or avoid using government-provided health care.  So, policy should focus on those most eager to help themselves.

Beyond these considerations, government paternalism (whether towards the poor or otherwise) opens a Pandora's box that permits ill-intentioned as well as benign uses of government power.

White Man's Burden

Roger Bate reviews Bill Easterly's new book, White Man's Burden, which explains why foreign aid has failed so miserably over the years.  Easterly was a classmate of mine in graduate school at M.I.T.

Here is a sample of Bate's review:

Foreign-aid is driven by "Planners" says Easterly. Perhaps the most famous planner and a determined opponent of Easterly is Jeffrey Sachs of Columbia University and the United Nations. Planners think of development as a technical problem that can be overcome by ambitious, multi-faceted, centrally-controlled campaigns, backed up by oodles of cash. Unfortunately, planning lacks market feedback mechanisms, so cannot measure useful performance indicators. Plus, Planners are rarely held accountable for their myriad failures.

Easterly masterfully destroys the key arguments, or "legends," of the Planners -- one being that we must give money to the poorest to get them out of the poverty trap, another that aid will lead to growth.

Alcohol versus Marijuana Prohibition

An e-mail I received:

I am reminded of the old days of alcohol prohibition and its failure! I write, as a 84 year old former police officer, as a Professor of Criminal Justice for 36 years (California State University, Long Beach), as a cancer survivor (both Lymphoma and Melanoma in remission after chemotherapy), and as a member of the Oregon Medical Marihuana Program.

Much information about marijuana dangers is akin to the pronouncements of alcohol prohibition supporters from 1918 to 1935, which was almost a total failure due to public rejection of those laws.  Speakeasies, private clubs, rum-runners, stills, and bootleggers were abundant, coast to coast, and private liquor supplies were common.  As was the acquisition of bad habits by guardians of those laws.

While teaching a course "Drug Abuse and the Law" I had both pre-career and working Law Enforcement Agents in my classes.  Often, during the 60s I heard the comment that "some law enforcement officers always have the best dope!" from class members who found out that too often the very best marijuana was retained by police agents themselves.

Today, there are thousands of non-violent drug offenders in jails, prisons, reformatories, or on probation or parole, not there because of acts which harmed others, but because of draconian drug laws and the ease of making drug arrests of many ignorant and habituated non-violent people, while many other people maintain private marijuana caches, as was the case during alcohol prohibition.  The parallels are obvious:  prohibition of alcohol failed -- and when the nation repealed those laws, and bars and private collections became legal, law enforcement turned to more serious dangers to society, and those repressive laws were no more.  It is time for our Nation and its Representatives to take the obvious actions that are called for by most thinking citizens.  The enforcement of the law, a primary government responsibility, would be relieved of an onerous, and costly burden.

A. C. Germann, Professor Emeritus,
Department of Criminal Justice
California State University, Long Beach

Mexico to Decriminalize Pot and Cocaine

Mexico is about to decriminalize pot, cocaine, opium and heroin.  Under the proposed legislation, possession of small amounts of these drugs for personal use will not be pursued by the police. Congress has adopted the new law, and President Vincente Fox is expected to sign it.  Trafficking in all these substances remains illegal.

As I have noted previously, decriminalization by itself is unlikely to change the nature of the drug wars; most police effort already targets traffickers rather than mere users.  But if the Mexico's adoption of this law signals a general shift away from enforcing drug prohibition, it will have broad beneficial effects such as reducing the violence and corruption caused by this policy.

Drug Prohibition and Mexico

Mary Anastasia O'Grady has an excellent piece in today's Wall Street journal on the adverse consequences of drug prohibition for national security.  She begins with this quote:

"It is an established fact that alcoholism, cocainism, and morphinism are deadly enemies of life, of health, and of the capacity for work and enjoyment; and a utilitarian must therefore consider them as vices. But this is far from demonstrating that the authorities must interpose to suppress these vices by commercial prohibitions, nor is it by any means evident that such intervention on the part of the government is really capable of suppressing them or that, even if this end could be attained, it might not therewith open up a Pandora's box of other dangers, no less mischievous than alcoholism and morphinism."

-- Ludwig von Mises in "Liberalism," 1927

Marijuana Prosecution in California

See David Feige's column at the Huffington Post on the case of Ed Rosenthal, the marijuana guru.  The federal government has prosecuted Rosenthal for several years for supplying marijuana under California's medical marijuana law.

The Ten Worst Government Policies

Tyler Cowen at Marginal Revolution calls our attention to a list of the ten worst government policies according to a poll of conservatives.

My list, not in any order and with a broad notion of policy:

1. Drug Prohibition

2. Medicare

3. Antitrust Policy

4. Nation Building and Pre-Emptive Military Actions

5. Affirmative Action

6. Social Security

7. Public Schools

8. The Current Tax Code

9. Government Takings

10. The Gutting of the Commerce Clause