In a March 16th commentary in the Wall Street Journal, Sally Satel praises the Charlie W. Norwood Living Organ Donation Act,¹ which makes paired organ exchanges legal where they were effectively illegal before.² Paired matches enable patients who have willing but biologically incompatible donors to trade donors, and thereby avoid the long waiting list. It has been estimated that this approach could make between 6,000 and 6,500 more kidney transplants possible in the U.S. each year.

The Norwood Act is exactly the type of creative, win-win solution that donors and their families would have arrived at decades ago had they been free to engage in simple bartering. It is a welcome improvement to the current, but it does not go far enough. As a mere "clarification" of the National Organ Transplant Act, the Norwood Act fails on two accounts: 1) it does not challenge the premise that government is justified in preventing these voluntary transactions in the first place, and 2) it distracts policymakers from having to address the fact that a free market for organs would save even more lives.

The current waiting list system is essentially a rationing mechanism. It does nothing to increase the overall supply of the good in demand (such as kidneys); it only dictates the order in which people receive them. Bartering, by comparison, increases the supply available for exchange by bringing new people in the donor pool who otherwise would not have had a reason to donate. This increase, however, is still relatively small because for a successful exchange to be arranged, there must exist a perfect match (i.e. what economists term a "double coincidence of wants"), and finding such a match comes at a significant cost. This is why people invented money—a finely divisible, commonly-accepted medium of exchange that makes every participant a potential buyer or seller.

Early societies discovered the superior efficiency of monetary exchange over barter exchange long ago. The lives of countless more transplant candidates could be saved if only our legislators would catch up.

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¹ Satel, S., "Doing Well By Doing Good," Wall Street Journal, March 16 2007

² Paired matches by living donors are not specifically prohibited by law, but the language of the 1984 National Organ Transplant Act (which makes it a felony to give or receive something of value in exchange for an organ) is so broad that hospital administrators generally do not allow them.

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