Altruism and Intermediation in the Market for Babies

I. IntroductionFew proposals generate the moral outrage engendered by a suggestion that babies - or, more accurately but less vividly, parental rights - should be traded on the open market. More than anything else, baby selling flies in the face of our deeply held convictions that some items are too priceless to ever be bought and sold.1 Throughout the world, in fact, baby selling is formally prohibited.2 And throughout the world babies are bought and sold each day.In the United States alone in 2001, roughly 41,000 children were born through assisted reproduction, 6,000 of whom were created through the use of "donated" eggs and 600 of whom were carried by surrogates.3 In 2003, Americans adopted 21,616 children through international adoptions4 and gave birth to thousands of babies using commercially purchased sperm.5 Each of these children was purchased, usually, at great cost. As will be demonstrated in this Article, the baby market is big business - a business in which parents pay, intermediaries profit, and surrogates, birth parents, and providers of egg and sperm "donate" their products and services for prices ranging from under one hundred to over one hundred thousand dollars.Until recently, the most visible and contested debates regarding baby markets primarily addressed the normative desirability of an open-market baby exchange, largely assuming that formal bans against baby selling relegated the baby trade to the black and gray markets. Indeed, the supposed ban on baby selling has been forcefully lamented by those who view commercial markets as the most efficient means of allocating resources, and just as vigorously defended by those who contend that commercial markets in parental rights commodify human beings, compromise individual dignity, or jeopardize fundamental values.6 Yet both camps generally assume that such a ban exists.This assumption fundamentally misunderstands the true nature of the baby market and its distribution networks. Recent analyses persuasively document the legal, but highly imperfect, baby market, rendering (in some circles, at least) assertions regarding the existence of legal baby markets so widely accepted as to be almost mundane.7 This Article takes those analyses a step further, analyzing the complicated and interconnected roles of politics, altruism, and intermediation in the baby market.By and large, baby market debates have been stymied by the mistaken assumption that prohibitions against commercial sale by original suppliers of babies and their constituent parts can be equated with an absence of commercial markets.8 In fact, however, commercial markets characterize all aspects of the distribution of parental rights, with one exception: Legal restrictions purport to limit the ability of surrogates, birth parents, and egg donors ("Baby Market Suppliers") to reap the full monetary benefits of their production.9 One of the defining characteristics of the baby market is thus the legal regime's formal exclusion of Baby Market Suppliers from the full profits of exchange. As a result, although Baby Market Suppliers charge for their services, they are expected to derive a substantial portion of their compensation from the utility associated with altruistic donation. Meanwhile, their monetary compensation frequently is characterized as a gift, donation, or reimbursement and may be well below market value. Not surprisingly then, supply in most sectors of the baby market falls far short of demand.At the same time, a wide array of fertility specialists, agents, brokers, facilitators, and other middlemen ("Baby Market Intermediaries") legally profit handsomely from the baby market, without similar legal restrictions on their profit-making activities. As public choice theory would predict, these Baby Market Intermediaries are more economically and politically powerful than Baby Market Suppliers, whose market access is legally restricted. Not coincidentally, Baby Market Intermediaries also have agitated actively for legal and industry restrictions that undermine the ability of Baby Market Suppliers to collect the market-clearing price for their services, thus reducing competition and capping the price of their required inputs. …