The Human and Economic Dimensions of Altruism

By Richard A. Epsteinⁱ

Abstract

This short paper analyzes issues critical to understanding the chronic shortage of organs in two parts.  The first defends the various devices that seek to take advantage of lower search costs in order to expand the supply of organs:  directed donations, matchingdonors.com, donor-recipient pairs, and LifeSharers.  The second part develops a simple economic model of altruism that helps explain how markets with altruistic participants operate in ways similar to ordinary economic markets, but produce an equilibrium position in which more organs are transferred at lower cash prices.

Make no mistake about it, altruism is a scarce commodity.  I choose these words carefully because I want to stress the biological and economic origins of the principle.  The strongest and most powerful urges that all human beings have are those of self-preservation, which lead them to rate their own well-being far higher than the well-being of others. To this principle there is one giant qualification that does not rise to the level of an exception: Individuals are bound to their families by natural affection and genetic connections, so that some degree of sharing within that environment is the norm and not the exception.  In this context, it is an open question whether donations within families count as altruism.  But toward strangers, altruism is, I repeat, a scarce commodity.

Just how do we know this?  The evidence is everywhere.  Far afield, the original advertisement campaign for the New York State Lottery, I recall, stressed the way in which the funds would help education.  When that fizzled, the newer, and lasting, campaign stressed the large pots of winnings that were at the end of the rainbow.  Altruism is also in short supply on matters that relate to individual sacrifice in the cause of medical advancement.  In a soon to be published book on clinical trials, Patients at Risk, Jerry Menikoff (both doctor and lawyer) and Edward Richards (both public health specialist and lawyer) stress that the dominant motivation of people who enter into clinical trials is improvement of their own health, pure and simple. Menikoff treats altruism as a "myth," and rejects the view that it ever counts as a dominant motivation for human behavior.  And still closer to the point, we have, by any reckoning, exhausted the gains that can be achieved from altruism in the market-if only there were one-for organs.  The misnamed United Network for Organ Sharing (UNOS) (sorry, you can't share kidneys, even if you can transplant half a liver, but only to one donee) gives living proof of that on its web page.¹  Current waiting list candidates: 91,532; transplants for 2005: 28,110; donors for 2005: 14,492.²  It is now well known that every day, many people on the waiting list, about 17 per day, die for want of a transplant.  It is equally well known that many persons in need of kidney transplants (66,085, as of March 29, 2006)³ survive on dialysis.  If altruism were a strong motivation, we would have shorter queues and more donations.

Yet note the qualification.  I said that altruism was a scarce commodity.  Scarce is not the same as nonexistent.  And there is evidence of that as well.  It may well be that most individuals who are desperate for a cure are concentrated on their own well-being.  But it is equally clear that under the current rules we do have altruistic transfers.  The most visible case in my experience is one in which Virginia Postrel recently gave a kidney to Sally Satel.⁴  Both are libertarians, which should caution against any easy inferences of personal behavior from political philosophy:  to recognize the forces of self-interest is not to be selfish.

Yet, for these purposes, it seems clear that one reason why the Satel/Postrel transaction is so notable is that it is so rare.  There are literally millions of individuals who could make these transfers at minimal risk to their own lives and health, yet there are only a  handful that make them outside close family connections.  The reason is all too clear:  the price that people have to pay in the risks and inconvenience that they still bear is not offset in its entirety by the indirect benefits that they receive from doing good.  The question for this session is what we can learn from these transactions.

I think that there are two ways in which to look at this problem.  The first of these is to examine the ways in which private parties have sought to overcome the inability to offer payment in cash or kind to potential organ donors.  There are several such programs that are worthy of some discussion:  directed donations, matchingdonors.com., four party transactions, and LifeSharers.  All of these devices rely on a mixture of altruism and self-interest to expand the supply of organs and thus have drawn the ire of those who defend the current system of UNOS allocations on equitable and ethical grounds.  The extent of altruism is uncertain in these models, and one constant theme is that any introduction of payment is likely to undermine that system.  I believe that this claim is false, and that the errors are best understood by a simple model of altruism that stresses the continuity between altruism and self-interested transactions, and that works regardless of how large or small the influence of altruism in human affairs.

Expanding Supply Within the Current System

Directed Donations.  The first of these goes to the question of directed donations, which I take is a subject that is now under review at UNOS.  The law on the subject today is that these donations are allowed, so that individuals who wish can match up in the same fashion as Sally Satel and Virginia Postrel.  Yet there is some unhappiness about this result, for apparent reasons of equity.  Right now the UNOS system works with rigorous queues that are set by a range of objective tests that have this virtue:  they remove (in most cases at least) the subjective element from the system, and thus tend to counteract the perception that the decisions of public bodies are skewed toward the rich, famous, and influential. But at the same time, the system does not give any indication of the relative value of the organ to persons on the list, whether measured in quality-of-life years or in terms of net social value contributed, as measured by income or some other more complex social indication.  If the organs tend to go to people who have been on the list for a long time, then the current system suffers from the regrettable defect that our principles of organ "sharing" do not do all that they could to reduce the total level of human suffering.  In light of the averages the actual recipient will gain fewer quality-years of life than some person further down on the list.

The use of directed donations within this context has been attacked as a reprehensible form of queue jumping, but in my view this amounts to a short-sighted and misanthropic view of the subject.  Implying that every donor should give a kidney to the first person on the list only casts doubt on the high purpose that someone like Virginia Postrel has in making the donation.  But this proposition is fantasy.  The only way to nourish altruism is to praise individual acts of altruism, not to condemn them. After all, the kidney transfer is more important than a refined discussion of whether this transfer is selfish (because of the adulation) or altruistic.  Let directed donations be banned, and no one else will get that kidney.  Allow it, and the queue for organs will be shortened by one person.  It is a situation in which everyone gains and no one loses.  It is a case in which if many other people followed the Postrel example, the queue would disappear altogether. 

The moral here seems clear.  The use of directed donations should not be regarded as some dubious loophole that eager regulators should plug.⁵ It should be encouraged by all the means that we have at our disposal.  Right now there is visible dissatisfaction with individuals who mount advertisement campaigns to secure themselves organs.  Frank L. Delmonico, President of UNOS has voiced an uneasy acceptance of directed donations to specific persons: "I don't think we can legislate or regulate how people get to know each other.  Once that occurs and someone decides they want to save another person, I don't think we ought to stop that as long as they are medically suitable, are not violating the law and are fully informed."⁶  Arthur Caplan, a University of Pennsylvania bioethicist, voices outright opposition to them: "It undercuts the ability of the system to get organs to those most in need and who have the best chance to survive.  It's not fair because it gives priority to people who can get attention."⁷  (I pass by the point that the persons who receive organs on the list are too sick to count as the ones with the best chance to survive.)  And Zink and his colleagues urge a misguided loyalty to the UNOS guidelines on the assumption that the supply of organs is fixed so that directed donations only allow privileged individuals to jump the queue.  "[T]here is no proof that a family who donates to an organ solicitor donated only because of the solicitation.  It is equally likely that someone who makes the decision to donate to a relative stranger would make the decision to donate to any person on the wait list who is also in extreme medical need."⁸

Unfortunately, this skepticism about directed donations misses the positive effects of this program on supply.  The solicitation clearly has effects on the overall supply.  Taking Zink literally, each two organs solicited result in an increase in one organ.  Indeed, it seems more likely that very few live organ donors who receive no compensation would give unless they had the choice in the selection of donees. No organ donation in the absence of solicitation seems to be the far more likely result.  Far from denouncing these personal campaigns, UNOS should imitate them, by running stories on the personal relationships that made all this possible.  I would hope that they would do that in connection with Virginia Postrel and Sally Satel.  There was nothing about their relationship on the UNOS site.  Indeed the UNOS website failed to thank by name any of the individuals who gave organs, or who gave their consent to the transfer of their loved ones' organs.  No private charitable organization would be so oblivious to the small things that help spark private generosity.  But UNOS just lacks the personal touch.  The momentum to stop directed donations has nothing to do with helping make the lives of others better.  It has a lot to do with the preservation of state-sanctioned monopolies in areas where some private initiative should be most welcome.  UNOS, even though it is a nonprofit organization, fits this description.  The federal government has granted it a monopoly over organ procurement under a contract that has been renewed four times over the past sixteen years.⁹ The nonprofit/profit line has little significance in this area because the desire for aggrandizement is equally present in both settings. It is not the first time that high ethical rhetoric has been used to preserve a state monopoly: State agricultural boards are also nonprofit organizations.            

Matchingdonors.com.  A second effort to expand the supply of available organs within the current legal framework is an organization called Matchingdonors.com.¹⁰  The "dotcom" in the title is no accident, for this on-line organization could not exist without the easy communications afforded by the web.  By its own formulation,  "MatchingDonors.com is a venue where patients and potential donors can meet and communicate, and hopefully expedite a donor agreeing to give a patient a much needed organ."  The overall strategy recognizes that no financial transfers are allowable, so the site operates on the principle that if it can narrow down the potential matches for any prospective donor, it can increase the odds that there will be a directed donation.  The basic intuition is again that people, whatever their dispositions, will find it easier to give to someone whom they like rather than someone they do not. 

I believe that the use of modern technology to expand the potential supply of donations is an unqualified good.  But the reaction from UNOS officials has been far more muted.  UNOS has in fact criticized the operation of the program because it requires a fee for participation, which is said to "exploit vulnerable populations."¹¹  Why this should be true in this context but none other is difficult, however, to determine.  In addition, UNOS protests that the program favors those with the best "media skills," which again ignores the increase in supply that these advertisements bring about.  Here there are no precise data, but the number is certainly not zero.  An organizer of a similar web-based donor-matching program said of the program's success, "We're drawing a lot of people to donate who wouldn't otherwise.  We're saving lives."¹²

Donor-Recipient Pairs  A third way to increase the supply of organs is through a system of barter involving donor-recipient pairs.  In most economic markets, barter has a limited role to play because it requires a precise matching of the needs of one person with those of another, especially if no cash can be added in to balance the transaction.  Your horse must be worth my cow, and each of us has to gain from the exchange.  In unregulated situations, we tend to see barter only with respect to low price goods of roughly equal value, where it is easier to work an exchange than to set prices for two goods.  In regulated situations, barter may be used to reduce the level of taxes or the risk of illegality.  In these settings, the parties are willing to suffer some level of market inefficiency in order to improve their individual positions against third persons.

It is this last element that explains the rise of barter in the form of donor-recipient transactions.  Thus a pilot program proposed (but not executed) at the University of Chicago contemplated this sort of transaction with donor-recipient pairs.¹³  The proposal suggests how it might be possible to incorporate gains from trade through a system of barter:  if donor A is not compatible with his or her family member, and donor B is not compatible with his or her family member, then the kidney center would offer to broker an exchange so that donor A gave to recipient B, and donor B gave to recipient A.  The double pairings in effect were done without the use of a price mechanism.  The simple mechanism has value because the barter sets a unique price that eliminates bargaining complications, and does so in a setting where the gains to both donor-recipient pairs are large enough to propel the situation forward.  Owing to the want of specific performance of organ donation arrangements, the two transfers have to take place simultaneously, as there is no other means of assurance that the second donation will take place once the first is completed. 

The effectiveness of this pairing-program depends in part on the asymmetrical position of persons with blood types O, A, and B.  O-type individuals are universal donors, but not recipients.  Persons of blood type A can receive O or A blood, but not B; similarly, persons of blood type B can receive O or A blood, but not B.  In this model, therefore, there are limited opportunities for barter given that most individuals are type O, so that in principle no cross-group pairing is needed for a type O donor to make a donation to a family member.  But barter could expand the potential donations in two situations that have somewhat different consequences. 

Thus, assume that the first donor/recipient pair is type A/type B, and that the second is type B/type A.  This is, in fact, a low probability pairing because of the relative infrequency of A and B types in the population.  But if it does occur, and the organs are of equal quality, then both pairs gain because the swap increases the supply of usable kidneys in this subpopulation from zero to two.  Ross calls these "balanced transactions."  Lawyers capture the same notion by indicating that the program has no disparate impact.  Since all the gains are fixed, there is no need for any side cash payment. The second situation arises when  the first donor-recipient pair has a type O/type A, while the second pair has a type A donor and a type O recipient.  The first pair does not need the second to complete the transfer.  But both transfers can take place if the first donor supplies to the second recipient and the second donor supplies to the first recipient. In this case, the increase in available organs is one because the ineligible A donor/O recipient pair is replaced by an eligible A donor/A recipient pair. Ross calls these transactions "imbalanced" because all the gains are enjoyed by the separate couple, and elsewhere has argued that the risks of coercion should block this transaction, even though it is more likely to occur than the first scenario.¹⁴ 

There is no question that this program does suffer from an intuitive unfairness, which I believe can be given a precise account, namely, that in voluntary exchanges we would like to see proportionate gains to the parties.  In addition, it seems as if these the unbalanced transactions are unlikely to take place precisely because there is no gain to the first pair, given that it faces higher transaction costs with no benefit (except perhaps when it receives a better organ for an inferior one).  Yet, rather than abandon the potential gain in the name of coercion, a cash transfer payment would allow us to expand the supply of organs.  It is just at this point that the intersection between economics and law enters the picture.  The use of these barter transactions between unrelated families looks as though it violates the standard terms of the National Organ Transplant Act, which prohibits the use of "valuable consideration" in payment for organ donations.¹⁵  The willingness of UNOS to allow them to pass muster seems to stem from the fact that there is no bargaining space in a straight organ-for-organ transaction, even though each organ could easily be regarded as valuable consideration for the receipt of the other.  But the imbalanced transactions, which promise smaller gain at higher cost, do require a cash supplement in order to make it mutually attractive, and thus open up the question, just how much should be allowed?  Hence, these transactions are illegal. 

It is easily possible to imagine other situations where gains from trade could be increased if cash supplements were allowed.  Thus, assume the first donor recipient pair is type A/type O, the second is type O/type B, and the third is type B/type A. The middle pair is self-sufficient, but without its participation, there is no sensible exchange between the first and third pairs, because only the third pair can gain, as the type B/type O transaction cannot take place.  So we have a mix of the balanced and unbalanced transaction, and, in light of the inability to arrange for a cash payment, two more lives are likely to be lost.

LifeSharers.  A somewhat different effort to reduce the chronic shortages under the current system is through an organization known as LifeSharers,¹⁶ whose founder is the tireless David Undis.  Unwilling to wait for action that unclogs the legislative logjam, Undis has put forward a program of preferential donations, whereby each program participant (I am one) gets preferential rights over non-participants to receive a suitable organ from other program participants.¹⁷ The program clearly seeks to work on mixed motivations:  some self-interest and some altruism in uncertain proportions.  Needless to say, the program attacks the strong criticism of those like Zink and her colleagues who think that all efforts to expand supply should be treated as efforts to disrupt the current UNOS structure.¹⁸

I do not think that there has yet been a successful transplant that has taken place through LifeSharers.  Indeed, there are good reasons to expect this outcome.  The dominant force in human affairs, as noted above, is self-interest.  The prediction, therefore, is that there will be a fundamental imbalance between a nonexistent supply and high demand.  Put otherwise, the individuals who are most likely to sign up are those who will need an organ, not  those who are in a condition to give. In addition, the small base of members (under 5000) makes it unlikely that any match would occur, even if a greater proportion of program participants were suitable donors.  Finally, there is some question as to whether the current UNOS rules permitting directed donations to specific individuals also permit donations to anonymous members of a class-a point on which the Delmonico quotation is somewhat evasive.¹⁹  But still the program has an important role to play because it urges people to find some way within the law to challenge the hegemonic authority of the UNOS program.  Neither Undis nor anyone else whom to my knowledge is familiar with LifeSharers thinks that it is cure-all. But other proposals to use voluntary reciprocal altruism on a national scale try to seize a similar impulse, simply by first asking individuals if they would like to have an organ transplant to save their lives, and then to ask them, gently, if they are prepared on death to consent to organ donation.²⁰  The same difficulties with strategic behavior remain, but it is yet another effort to expand the supply within the current framework.

Economic Theory.  Last, there is the question of what kind of model we can make of the problems at hand. In this particular context, it is often said that the narrow economic models of self-interest cannot be used to capture what is going on in a world of altruism.  I quite agree that the psychology of altruism is complex and delicate.  But for these purposes, that is neither here nor there.  The question to ask is rather different:  what are the fewest changes that have to be made to the standard economic models of human behavior to explain altruistic behavior?  I believe that we need make only one such change.  Draw a new supply curve that intercepts the y-axis in negative territory.  Here is the set up.  The explanation follows below:

Line I, sloping upward and to the right, indicates the supply of organs from nonaltruistic persons.  It assumes that the total number of organs offered is zero when the benefits received are zero; as benefits increase, the number willing to donate will increase.  The assumption is made for reasons of simplicity.  Typically the supply curve crosses the y-axis at some positive point to reflect the positive costs of goods.  But this model just sets the cost of the good at zero.  But for these purposes that does not matter, for it does not alter the basic qualitative analysis to increase the gap between Line I and Line II.  Indeed the formal analysis does not depend on the vertical difference between Line I and Line II, which is just an empirical measure of the degree of altruism within the system. Indeed, this construction of Line II does not make any comment on the motivations of individual altruists any more than Line I makes assertions about the motivations of self-interested persons.  Both lines only assert the common relationship that as the amount paid for any quantity of goods increases, so the supply will increase as well. 

All the action is in the lower line, Line II, which represents the current world with altruistic donors.  Insofar as it indicates that there is some positive quantity supplied at negative cost, it rejects the relentless model of self-interest that drives the traditional economic model.  But it does so parsimoniously because it continues to hold to the older model that states that supply curves are positively sloped.   At this point it becomes possible to use the same analytical framework that governs markets without any altruism at all, because it indicates that there is a consistent supply response even when prices are negative, which in this case, without loss of generality, is modeled in linear fashion.  Point A, at which Line II touches the y-axis, marks the point at which the costs are so high that all altruists decline to donate organs.  But the upward slope of Line II means the quantity supplied is positive as costs decrease, even if no compensation is paid. If this model is correct, it also follows that individuals who start on Line I in negative territory remain on that line once positive compensation is offered.  There is no sharp discontinuity where the use of positive compensation converts altruists into egoists whose supply behavior is governed by Line I once the activity takes place above the x-axis.  Both altruists and egoists share yet another feature.  Any increase in payment that is needed to attract the marginal organ donor must, in the absence of any system of effective price discrimination, be paid to inframarginal organ donors as well.  But those extra payments are not social losses, but only transfer payments.  The change in social welfare, apart fro the distributional consequences come from the gains associated with any reduction in organ shortage. 

Now that these points are established, assume that with the limited benefits that organ donors can receive-reimbursement for transportation and expenses for example-under today's law, the quantity supplied is point B, placed midway on the bottom line, between its y and x intercepts.  The conceptual question is whether we should treat this as a sale or a gift.  My contention is that the transaction is properly regarded as a gift precisely because there is no prospect of tangible gain to the organ transferor who by design is left indifferent between donating and not donating..  Indeed, so long as the total package of benefits and harm produces no net benefit, then all transactions up to the x-axis should be regarded as gifts as well, and therefore, one hopes, free of any and all complications under NOTA, with its valuable consideration requirement. 

Thus far, I have talked about the conditions of supply.  To make the model complete, we have to look at the demand side as well.  Here I assume that the demand side is the same no matter whether we deal with altruists or egoists on the supply side.   Hence by the basic law of demand, we observe the downward sloping demand curve represented by Line III.  It crosses the x-axis at point D, which represents the demand for organs at zero cash price, which is the situation we have today, where the demand is rightly huge.  If we assume a market of pure egoists, then we note that the observed supply will also be zero, so that OD represents the observed shortage.

The level of donations is, of course, positive, so that the orthodox model is wrong in picking Line I over Line II.  I leave to one side the unresolved philosophical debate over whether altruism is possible, given that it is always possible that apparent altruists receive some indirect benefit in the form of self-satisfaction or social approval from doing a good deed.  For these purposes, it is sufficient to distinguish those who receive some tangible gain in cash or in- kind in exchange, from those who do not.  In this model, the key question is, once we shift to Line II, what is the quantity that is supplied in equilibrium, and what is the shortage?  The demand remains constant at OD for a zero price.  But the supply conditions will change for the better if we reduce the amount of altruism that we demand from donors.  If we can find some benefits that cut the shortfall to potential organ donors from OA to OB, then we can increase the supply of organs from zero to OB, leaving only a shortage of BD.  If we could move further upward along Line II until we reached the x-axis, then we could elicit a quantity OC, with a shortage of only CD.

But is it possible to eliminate that shortage if we went to a market?  The answer here is yes.  The key question is what counts as the equilibrium position.  There are many people who take the position that once we introduce compensation, we alter the supply curve.  No longer is Line II the operative line. Rather it is Line I that becomes operative in the analysis.  I see no reason to accept that assumption.  The supply curve is continuous and positive sloping in the area below the x-axis.  What huge psychological transformation requires the supply to approach zero once a single dollar is offered for organs?  The more sensible assumption is that the supply moves upward.  The only possible complication here is whether infra-marginal altruists (i.e. those who would donate at negative prices) would continue to do so.  My guess is that many of them would.  If so, then the total transfer payments needed to secure payment at the equilibrium point E would not be equal to quantity supplied times price.  If all altruists were generous, and all persons not altruistic demanded the last pound of flesh, then in equilibrium, CE (on the x-axis) would demand payment, while OC (on the x-axis) would not.  Yet, no matter which way it comes out, we have an equilibrium in which altruism matters.  We get more organs in equilibrium than we do in a world of all egoists, where the quantity consumed is only OF (on the x-axis) and the price paid is OF (on the y-axis).  But either way we get rid of the queues.  Nor does the use of a price system alter any other incentives, including those to take care of one's self or to use medicines to avert a kidney transplant.

Indeed, there is this irony.  Once the model is fully understood, it follows that there are no institutional adjustments that need to be taken to respond to it.  The explanation here is that altruists and egotists are not distinct types of persons.  Rather, there are some individuals who are willing to accept benefits from a transaction that are less than their costs. So long as they are able to self-identify, there is no reason for the legal system to draw any hard-edged distinction between types, or to encourage one and discourage the other.  There can be degrees of altruism reflected by the size of the net loss that certain transferors are prepared to bear, which are captured by the observed patterns of voluntary transactions.  In the end, the more the altruism, the lower the equilibrium price and the larger the quantity.  End of story.

In response, it will be argued of course that these markets, even with limited altruism, are flawed by ignorance, opportunism, coercion and worse.  And so they are.  But that situation is made worse in a world in which voluntary sales are prohibited by the law, because it is hard to develop responsible intermediaries who could respond to the usual problems of mistake and sharp practice.  And it is equally the case that the current system that does not allow the market to reach equilibrium is open to corruption and influence as well, as desperate people, mostly egotists, seek to maneuver their way to the head of the queue.  The point of this little demonstration is that we do not have to ignore simple economic principles to model altruism.  Rather, we can use those principles to explain how the market I imagine would work, and why it would work better than any system of price controls, which would create the permanent shortages that economic theory predicts.  Just those shortages came about with price limitations on gasoline In the 1970s.  It remains true for rent control in New York and other cities today.  And it is shamefully true with respect to the market for organ transfers, which obeys the law on price controls and shortages to a "T."  Why it is moral to insist on an arrangement that results in needless suffering and death escapes me.  But let the philosophers debate as they will, so long as the regulators open up the supply side of the market.  It will work better with altruists, few in number though they are, than it does without them.  And it will work far better than the current misshapen system.

FOOTNOTES

20. Donald W. Landry,  Voluntary Reciprocal Altruism: A Novel Strategy to Encourage Deceased Organ Donation,  69 Kidney Int'l 957 (2006).