Alvin Ross's 'Economics of Prohibited Transactions' - Analysis of Morally Controversial Transactions

(Seoul = Yonhap News) Reporter Kim Jeong-eun = Various markets exist in society and we live within them, making numerous transactions. However, among them, there are transactions that are the subject of controversy and sharp debate on a moral level. Some things are prohibited or regulated by law.

Alvin Ross, winner of the 2012 Nobel Prize in Economics and a world-renowned scholar in the field of 'market design', addresses various moral controversies surrounding which transactions should be allowed and which should be prohibited in his new book, 'The Economics of Prohibited Transactions.'

We look at controversial issues in a variety of areas, from private and intimate areas such as sexual relations, childbirth, marriage, adoption, and surrogacy to alcohol and drugs, high-interest credit loans and emergency product price increases, plasma and kidney donation, and medically assisted death.

The author explains these transactions with the concept of ‘disgusting transactions’. This means that the parties involved in the transaction want to participate, but others believe the parties should not enter into the transaction for moral or religious reasons.

And these transactions have been regulated by customs, social norms, and laws. However, this may change depending on the times and social changes.

Same-sex sexual relations and interracial marriage were once prohibited by law, but are no longer illegal in many societies.

The author also points out that banning certain transactions can create a black market that neutralizes the measure and creates various gray areas.

In the United States, there was an era of 'Prohibition' from 1920 to 1933, when the sale of almost all alcohol was banned. However, a black market run by criminal organizations emerged and alcohol consumption was not properly restricted, ultimately leading to failure.

There are controversial topics even in the medical field.

Many countries prohibit financial compensation to plasma and kidney donors.

This measure is partly due to the purpose of protecting the poor and vulnerable from exploitation, but it also stems from a broad social perception that buying and selling organs is wrong.

However, the authors say that even in this case, some degree of protection can be provided by efficiently designing and regulating the market.

In the United States, financial compensation is provided to plasma donors within a legal and regulated market. Accordingly, the author says that many people around the world are saving their lives with plasma donated by Americans.

The book broadly examines the issues and backgrounds surrounding these various problems, related regulations, and their results, and emphasizes the importance of efforts to find compromises that can be implemented effectively while receiving sufficient social support.

The author says, “There are policies that enable more productive discussions in terms of consequences and costs without necessarily forcing them morally,” and “We need to weigh the costs between what we want or hate and what we can actually achieve, and find a compromise between the two.”

The power of thought. Translated by Gyeong-sik Lee. Supervised by Jeonggyu Choi. Page 468.