Taboo Trades
Taboo Trades
Repugnance with Al Roth
Al Roth and I discuss hitmen, drugs, kidneys, paid sex, and other repugnances. We’re joined by co-hosts Madison White and Alex Leseney (both UVA 3Ls), with appearances from UVA 3Ls Thalia Stanberry, Caitlyn Stollings, Jackson Bailey, and Autumn Adams-jack. A good time was had by all!
Alvin E. Roth is the Craig and Susan McCaw Professor of Economics at Stanford University. He works in the areas of game theory, experimental economics, and market design, and shared the 2012 Nobel Memorial Prize in Economics.
Readings referenced in this episode:
Roth, Alvin E. Who gets what--and why: the new economics of matchmaking and market design. Houghton Mifflin Harcourt, 2015.
Roth, Alvin E. "Repugnance as a Constraint on Markets." Journal of Economic perspectives 21.3 (2007): 37-58.
Roth, Alvin E. "Marketplaces, markets, and market design." American Economic Review 108.7 (2018): 1609-58.
Chenlin Gu, Alvin Roth, Qingyun Wu (2022) Forbidden Transactions and Black Markets. Mathematics of Operations Research Published online in Articles in Advance 28 Jan 2022 . https://doi.org/10.1287/moor.2021.1236
Supposing instead I said to you, you know, I'm going to be coming to Virginia soon. And there's a guy at the University of Virginia who I found out refereed one of my recent papers and rejected it. And I just can't take it anymore. You look like the kind of guys who would know where I could hire a hitman. You know, I want to rub him out.
SPEAKER_08:Hey, hey, everybody. Welcome to the Taboo Trades podcast, a show about stuff we aren't supposed to sell, but do anyway. I'm your host, Kim Kravick. I'm super excited to have with us today my friend and co-author Alvin E. Roth, who is the Craig and Susan McCaw Professor of Economics at Stanford University. Al works in the areas of game theory, experimental economics, and market design, and he shared the 2012 Nobel Memorial Prize in Economics. He's known to many of you because of his path-breaking work on matching markets, including kidney exchange, and he's universally admired, not only for his amazing work, but for his kindness, and generosity. I'm so happy to have this discussion with him today. Okay, Al, thank you so much for joining us today. We're happy to have you.
SPEAKER_01:Well, thanks for having me.
SPEAKER_08:I am going to give my two co-hosts for today, Madison and Alex, a chance to introduce themselves.
SPEAKER_02:My name is Alex Licini. I'm a 3L here at UVA, and I'm excited to get to talk to you today. Nice
SPEAKER_01:to meet you, Alex.
SPEAKER_05:And I'm Madison Wyatt. I am also at the University of Virginia.
SPEAKER_01:Good to meet you, too.
SPEAKER_05:Great.
SPEAKER_08:And as you can see, we've got other students on here, and they have questions. And for the most part, Alex and Madison and I will be sort of telling you those questions, Al. And then at the end, we'll open it up to a more general Q&A if we are able. As you know, one of the things we wanted to talk to you about today, Al, is repugnance, which you've written a lot about but haven't, I think, at least given quite as many interviews about as you have about kidney exchange or market design. We wanted to Give you a chance to talk about this, as you know, we care you, I know you care a lot about repugnance we do too, we have a whole class on it. And so we wanted to ask you some questions to start out with just about repugnance and. sort of what you, how you define it. One of the things that I get pressed on, and I suspect you do too, is sort of what we mean by repugnance and whether the source of that repugnance matters. So I'm going to turn it over to you and let you tell us sort of what you have in mind when you talk about repugnance.
SPEAKER_01:Okay, so repugnance. I think of a repugnant transaction as a transaction that some people want to engage in and other people think they shouldn't be allowed to. And the people who think they shouldn't be allowed to don't take any easily measurable harms and often craft their opposition in moral language.
SPEAKER_08:Okay, great. And so as a broad definition, from your perspective, does it matter what the source of that repugnance is? In other words, does it matter that that opposition is just due to what we might call an ick factor, right? Something just seems gross or wrong. We're not sure why. Versus the type of sort of social corruption argument that that people like Michael Sandel and others have raised or worries about coercion or exploitation of people. Does any of that matter from a market design perspective or is it more neutral?
SPEAKER_01:Well, I think it might all matter. You know, when you talk about corruption, I don't identify a lot with that, but I do worry about slippery slopes. There might be things that are okay to do, but will lead us into living in a less sympathetic society than we'd like to live in. And that seems to me to be a very legitimate concern.
SPEAKER_08:Okay. And so I think that Alex and Madison both had some follow-up questions about this. I'm going to hand it over to Alex first.
SPEAKER_02:Sure. So, yeah, it seems like this definition of repugnance that we're using is sort of like it's a democratic sort of message. Things are repugnant if a majority of people in a certain area think they're repugnant. And that seems to me to incorporate some sort of, at least from the economics perspective, moral relativist view. And my question is, when we're designing markets, are we trying to make things less repugnant by shifting the opinion of the public? Or are we trying to design the market in a way that sort of tricks people into arranging transactions in such a way that the repugnance is hidden, even though the net exchange is still the same?
SPEAKER_01:Well, so as an economist, what I try to do is think about how to increase welfare. And that's why when I talk about repugnant transactions that some people object to, I mention right away that that. it's hard to measure the harms that the objectors have. If there are real harms, transactions can have negative externalities, then of course we have to take the objection seriously and think how to mitigate the harms and all of that. But when you think about, say something like same-sex marriage, the people objecting to it don't seem to feel threatened that they'll have to engage in same-sex marriages themselves. They have a different kind of objection. So I think I'm a little less, personally, I'm a little less concerned about their concern in a case like that. But as a designer, I would like to allow laws to be passed and judges to make decisions that reduce the harm that bans on things like same-sex marriage seem to have. So I'm certainly interested in... Reducing repugnance and making the psychic pain that people feel when things aren't going the way they would like to be less in order to make real benefits available to other people. The word real there is a tricky one. I don't doubt that people who don't like something may suffer real pain. discomfort and harm of some sort when decisions are made that they don't like. But just this morning, I have a blog on market design. And just this morning, I linked to a paper in the Journal of Medical Ethics that said, maybe when we talk about organ donation and we talk about eyes, maybe we should talk about ocular donation instead of eye donation, because some people don't like the sound of eye donation, but might not object to ocular donation. And it seems to me, I don't know if That's empirically correct, but it seems to me if we could get more in places where you have to check organ by organ, if we get more people to agree to donate their corneas when they're dead, by saying ocular donation, I'd be all in favor of doing that.
SPEAKER_08:Interesting. If I can jump in here, Al, sort of going back to your point about negative externalities and... This is something that I think that sort of the legal literature struggles with, and maybe the economics literature doesn't. But, you know, these sort of what to do with these purported negative externalities that are difficult to to measure, things like we will live in a worse society or markets and commercial surrogacy will cause a degradation of the way in which we think of families or children or women. I mean, how do you approach something like that? This is an area that, as you and I have discussed before, I think the law struggles with.
SPEAKER_01:Well, I guess economists should struggle with it too. But again, maybe professional biases is I like to measure harms. I like to think about harms that I can measure as perhaps being more immediate than harms that are very difficult to measure. And over time... Well, because I think about measurable harms, I think that, by and large, allowing same-sex marriage has improved welfare in the United States. Now, what I mean by that is there turned out to be a lot of people who wanted to marry each other who were prevented under the previous legal regime, who are now married, and I take that as evidence, real preference evidence, that they're better off when they're married to each other. And I don't see an equal... an equal way to talk about harms. Although if you were to tell me that the sort of political troubles and divisiveness we're having in the United States could be shown to be directly related to that issue, then I might have to rethink it.
SPEAKER_08:Got it. And when I say that this is something that the law has struggled with, I guess what, in some ways I meant by that is that there's a debate about whether sort of, even if the harms... There is a debate about whether all preferences matter, right? There are perhaps in a liberal society some things about which you're just not permitted to have legally recognizable preferences. And that is sort of a debate that has taken place for a while, including in the same-sex marriage context.
SPEAKER_01:You know, years ago, Amartya Sen wrote a paper about what he called minimal liberalism. This was in the Arrow General Possibility Theorem tradition. And the way he illustrated minimal liberalism, he said there's one thing that everyone is allowed to decide. And I think his example was it's whether you sleep on your back or sleep on your belly. And, of course, then he showed that along with the other axioms, you know, that led straight to dictatorship. It's the only consistent, you know, because you had these expansions. of axioms like independence of irrelevant alternatives that allowed you to take small decisions and enlarge their consequences. But yeah, I'm inclined to think that it's no one's business but mine and maybe my wife's whether I sleep on my back or my belly.
SPEAKER_08:Madison, I think you had a question for Al along these lines if you don't think it's been addressed already.
SPEAKER_05:I think it's been touched on a little bit, but kind of the question was at what point during the market building process do you as a builder adjudicate repugnance? And do you think it's important to adjudicate that repugnance during the market building process?
SPEAKER_01:Well, adjudicate may be a different word in a legal context than it does in an economic context. But as a market designer, one of my big jobs is to design something that can be adopted and implemented. And that's a very outward-facing part of market design. We have to convince people of things. So Kim mentioned that I spend a lot of my time these days thinking about kidney exchange. And with kidney exchange, as time has gone on, we've tried to extend the benefits of kidney exchange to more people. And sometimes we run into resistance. So repugnance is a very real thing in market design. At the very least, it's a constraint, right? If you can't convince people to do something, then you can't do it.
SPEAKER_08:Great. I think Alex has a question. It's actually a question that was put forward by Jackson, who you can see here, another student in the class. And it actually relates, Al, to your post from this morning, which by the way, I did read this early this morning since it's later my time than your time.
SPEAKER_01:You're probably the only person who reads my blog,
SPEAKER_08:Kim. No, that is not true. So Alex, do you want to ask Al to elaborate a little bit more on framing? I know that Al has done some work on this, including, Al, I was reminded of your heroism awards paper from a few years back.
SPEAKER_02:Go ahead, Alex. Yeah, I mean, just the question of framing, and you were talking about like ocular donation as opposed to eye donation, and that makes a difference. And Jackson's question was, how important are semantics in how markets are described to fighting against repugnance? Do you think repugnance to a market or transaction is derived from the transaction itself, or maybe just from the way it's portrayed in the public, like safe injection clinics versus legal heroin use clinics? They have different connotations. So how does that play in?
SPEAKER_01:I think it plays in. Often, market design involves a political process where you have to assemble a large enough coalition of people who want to do something. And so I think framing plays as much of a role in that as it does in any political issue, whether we talk about... you know, a social security lockbox or a trust fund or, you know, all the different words, whether we talk about estate taxes or death taxes. I mean, there's lots of framing that goes on in lobbying for legislature. And that's often what we're doing.
SPEAKER_08:Well, can you remind me of sort of, you had a short experiment, I think with Muriel about these, the heroism rewards. If you remember, I don't remember exactly what, What you found, but it was much less repugnant as my recollection.
SPEAKER_01:Well, so it wasn't as less repugnant as I'd like to remember. We conducted a survey and we said, supposing we had a couple of variables and we were going to give a heroism award. And the question was, who was going to give the award and to whom was it going to be given? And when it was the least repugnant and the thing that got the most support was a private foundation that was going to give a$50,000 award and a prize and a banquet in Washington to five individuals, one of whom would be a kidney donor and the others would be a soldier and a policeman and a teacher. We framed it that way. And a kidney donor. And that struck people as not so bad. On the other hand, when we said the federal government was going to do this for every kidney donor that had the least support.
SPEAKER_08:Got it. Got it. Okay. So I had misremembered sort of what the findings were and thought it was sort of a direct test of, you know, paying donors versus giving them a reward, but it sounds like it wasn't.
SPEAKER_01:Well, right. I mean, there was other things going on. Now, Nico Lachetta and Julio Elias and Mario Masses, they have an experiment about pain. And what they find is there are some people who are just opposed, no matter what you tell them about the consequences. There are some people who support the idea, regardless of how effective it would be. And then about 20% of their American population subject were swayed by whether you told them it would increase kidney donation by a lot.
SPEAKER_08:Yeah, and just to plug a prior episode, Nico and Mario were guests last season on the podcast and talked about a lot of their work, including their work on blood donation. So Madison, you had a question, I think, that was prompted by Jillian that you wanted to ask Al about blood donation. the introduction of money into transactions. So one of Al's interests and one of my interests as well is the way in which the introduction of money into a transaction can turn something that's previously not repugnant into something that is repugnant. And there were a couple of questions about that. So I'm gonna turn that over to Madison.
SPEAKER_05:Yeah, so the class just had some questions regarding the fact that there are some things that were okay happening whenever it's for free. But once we added money, people seem to have some objection to that. And we're curious whether it is the money itself that's doing the work there and making the transaction repugnant, or if there's something about the amount of money that also seems to affect the objections that people have.
SPEAKER_01:Well, I think empirically, both of those things matter. If you invite me to dinner at your house, I... by way of saying, thank you, I can't offer to pay for it, even if it's only... even if it's only a modest amount, that would seem like a violation of the code of hospitality and misunderstanding what an invitation to dinner at your house meant. It's an act of friendship. You're not a restaurant. So there, I don't think the amount matters. And I think that's much of the way that people object to paying for kidneys, although they also worry about words that are sometimes called things like coercion, that if I offer you too much money, it might deprive you of your agency. So I think both matter. And economists talk about the extensive and intensive margin. My guess, although I don't have good evidence to point this out, is that people would mind less if I pay you for something that you were already going to do than if I persuade you to do something by paying you. And that amount of money that I offer you might be more persuasive if it's larger. And we do have... Muriel Little and I do have a small experiment about things like that. And Sandra Amberwell, who's an economist who got his PhD at Stanford, is now in Zurich. He has a series of experiments that suggest that some people can be... What he set out to do was to see whether he could harm you in the laboratory by offering you more money. And to some extent, he can... succeed on the margin. And what his experiment suggests to me is that when there's lots of money on the table, informed consent becomes harder. You have to make sure it's muscular because informed consent, you're really getting people to pay attention to the information about why they might not want to do something might become harder when you're offering them lots of money to do it.
SPEAKER_08:So Al, can you remind me of, I do remember that paper, but I don't remember whether it was, what he found was that people's perception of the robustness of consent went down as opposed to people's actual knowledge went down. In other words, did people actually absorb less information or pay less attention to it?
SPEAKER_01:Yes. So he does have an experiment where people paid less information. So he offers you a gamble that with probability a half, you'll lose you know a a large sum in the experiment and with probability half you'll only lose a small sum and then he offers you a payment to take this bad lottery a payment that will cover most but not all of your losses if it's a large sum and will leave you with a a profit if it's a small sum and then he lets you look at the state of the world to tell whether whether the lottery is going to lose you a large sum or a small sum. And the state of the world is a computer screen filled with letters of the alphabet. And if there were more Gs, then... b's then it's the good state of the world and you and you'll only lose a little and you should take the the money and if it's more b's than g's then it's the bad state and you shouldn't take the money even when it's a large sum but he gets more people making mistakes when um when they offer lots of money it's hard to it's hard to count the b's and g's there and and he further In one of his experiments, he varies how hard it is to count the B's and G's. He makes it easier for some people. There's only 25 of them. And harder for other people, there's 100 of them. And what he finds is that when it's really hard to tell, then money matters more.
SPEAKER_08:Got it. So, I mean, I suppose a market skeptic would take away from that that, you know, our– our worries about inserting money into certain contexts then are founded, it can affect the consent process. I suppose another response would be that we have mechanisms for improving the information and consent process and we should perhaps be more sure that we are using them in a environment in which we might have reason to worry about coercion of that sort. Is that fair to say? I
SPEAKER_01:think that's very fair to say. But I'd also, you know, you said, you know, maybe there's evidence that money affects the consent process. And I'd say, of course, money affects the consent process. You probably teach more law classes, and I certainly teach more economics classes than I would if I weren't paid to do that. If I had to earn my living some other way and just teach economic classes as a hobby, I would teach fewer.
SPEAKER_08:Yeah, I told we discussed that actually in our class meeting, our last class meeting when I said, look, I really love you guys, but, you know, I am here because I'm being paid.
SPEAKER_01:And that doesn't corrupt the quality of the education you can give.
SPEAKER_08:Hopefully not. That is for you guys to decide at the end of the semester, I guess.
SPEAKER_01:You know, my understanding is that when you go out and become members of the bar, even lawyers get paid. So I'm not sure we can trust lawyers to decide whether money corrupts any more than we can trust anyone who's employed.
SPEAKER_08:Well, and unlike teaching economics or law, working at the jobs that these guys will have, which are incredibly demanding, is challenging. almost certainly something nobody would do for no pay. So we're going to actually come back to your work about unraveling in the law market, which is a market they have all just been through and are eager to talk about. But I guess first, I wanted to sort of return you to kidney exchange, which you brought up earlier. And in particular, one of the things I was hoping you could talk about is, and by the way, this is a question prompted by a student in the class, Neva, who had a couple of questions. And we were very interested about the seeming widespread acceptance of kidney exchange, most forms of kidney exchange in the US. And it's continuing repugnance in some other parts of the world and sort of why that is, what might explain these differences, whether they're cultural, legal, medical, all sorts of things. I'm not sure what it might be. And if you're able to also discuss what I know is one of your new innovations, global kidney exchange and the repugnance that it has encountered and why you think it is encountering that repugnance and whether you think that it will be overcome in the same way that resistance to kidney exchange was overcome, at least in the U.S.,
SPEAKER_01:Okay, so those are two different questions. Let me try to answer the cultural part in sort of general and then talk about global kidney exchange a little bit. One hypothesis that you could have is that some things are repugnant. Some things are against the law, are banned, because the people who find them repugnant form a majority in those places, in the places where they're banned. And they're not banned. They're legal in other places because the people who find them repugnant are a minority. So Stephanie Wong and I conducted a survey about prostitution, surrogacy, and kidney exchange, global kidney exchange, actually, in the U.S. and Philippines and Spain and Germany with structured samples that looked you know, something like the general population. And what we found is that kidney exchange, including global kidney exchange, is supported by a majority of people everywhere, including Spain and Germany. In Germany, where even kidney exchange isn't fully legal. So it's not that, so, and prostitution, almost no one likes, even in places where it's, well, that's not true. It gets, it's close to 50% in the places where it's legal, but it's certainly not a big majority. like, you know, big majorities. You could pass the, you know, if you had referenda, you could pass a law in favor of surrogacy in all these places, even though it's illegal in Germany and Spain. In fact, in Germany, I gave a talk on this before COVID. In Germany, the laws on prostitution, surrogacy, and kidney exchange are exactly the opposite of what they are in California, right? Only prostitution is legal in Germany, and kidney exchange and surrogacy are illegal. But of course, It doesn't mean that German parents who need surrogates don't come to California and use surrogacy services that are legally available here. But those things change by place and time. New York just legalized surrogacy last year, commercial surrogacy, commercial gestational surrogacy. I mean, you know more about this than I do. So it's partly social... social, cultural things, but it's partly hysteresis. If you started with a terrible surrogacy case in New Jersey in the 1990s, then it's a lot different than if the first surrogacy case that came to court was a simple contract dispute, as it was in California. And it takes a while for the laws to recover. Now, about kidney exchange and global kidney exchange, I think there are two things going on in the opposition. One is bigotry against poor people, right? That, you know, somehow the people who support kidney exchange often are against global kidney exchange in Spain, for example. And their idea, I mean, they like kidney exchange, so they agree with us that being able to try to save your life and the life of your loved ones is a basic human right, and that people love their family members and are prepared to donate kidneys to them, but sometimes medically you can't donate directly, and that these are just basic human rights that all human beings share. But they think that poor people don't share these properties. So that's a little hard to take, and I think that's a not insignificant part of what's going on. But a second less repugnant reason to oppose global kidney exchange is they have this idea that it might promote rather than compete with illegal black markets for kidney transplants that are performed by criminals under bad circumstances. And I think that's largely a misunderstanding of how black markets and legal markets interact with each other. So part of the anti-black market legislation in India, where kidney exchange is legal, is who can be your... intended donor is very subscribed. It's illegal in India to get a kidney from your uncle. That's within the family. But it's not legal for your uncle to be your intended donor in kidney exchange. Only your immediate family can be a member. And I think the idea was that this was sort of imposed, I think, by some past administrations of the Transplantation Society. who lobbied in this respect. And I think their feeling is that if you let in uncles into kidney exchange, it'll open up the doors to black markets. And I think that's exactly wrong. I think that if your uncle wanted to give you a kidney but was incompatible, but you could go through a kidney exchange, then you would have a legal, ethical way to get a kidney in the medical establishment. But if your uncle isn't allowed in, then maybe you can buy a kidney in India. Maybe there's someone in Chennai who wants to give you a kidney if you pay him. So I think that some of the reason people object to international kidney exchange, particularly where some of the countries are poor, is they believe that it'll open the door to black markets. And I think that this is a mistaken view of how illegal markets run by criminals are different than legal markets run in regulated ways. And we, of course, have plenty of experience with both. In the United States today, we have legal markets for alcohol, which weren't always legal. We had prohibition. And we have illegal markets for narcotics. And they operate in very different ways. And you may or may not be glad that alcohol is legally sold and promoted and all of that. But one thing you can't do in the legal market for alcohol is buy moonshine whiskey from gangsters. That part of the market has just disappeared. You can buy expensive whiskey from people who've kept it in warehouses for 40 years, but the moonshine whiskey that has some chance of making you blind has been driven off the market.
SPEAKER_08:Interesting. Going back to your discussion of the laws in India and talking for a minute about sort of resistance to kidney exchange. And then, as you said, there are two separate topics here, kidney exchange and then global kidney exchange. I'll come back to that second one in just a minute. But yeah, I guess that's right. There is a set of countries, and this is not uncommon, where there were worries about Black markets, where part of the hurdle to kidney exchange is that it just severely restricts who can who can be a donor. And that has in some ways an indirect, I guess, effect on kidney exchange. Is that the case in a country like, say, Germany? I know that they have had a lot of discussion about liberalizing their laws there. And I don't know exactly what the issues are. It seems to me far-fetched in a country like Germany to think that they have concerns about trafficking and that something else must be motivating their resistance there.
SPEAKER_01:You know, Germany has a complicated mid-20th century history that includes medical experimentation of unethical sorts. So I think that I think a little repugnance goes a long way in Germany.
SPEAKER_08:Yeah. Yeah. Do you think that they I mean, Do you think that they are moving towards liberalization, at least in the kidney exchange area? I do keep seeing it in the news.
SPEAKER_01:That's because you read my blog.
SPEAKER_08:That's true. I
SPEAKER_01:keep seeing it
SPEAKER_08:in the news, i.e. from you.
SPEAKER_01:Yes. So I debated a member of the Bundestag when I was in Germany before COVID, and he wasn't opposed to it. to changing the law on kidney exchange. He just didn't think it was a high priority. He said, you know, the German people can only take so much legislation on a given topic at a time. And he thought it was a higher priority to, to change some of the regulations about deceased donation.
SPEAKER_08:Got it. Got it. Okay. So then returning back to global kidney exchange and sort of the bigotry against poor people. And I'm just going to, I guess be a little more, I want to delve into that a little bit more for folks who sort of haven't been following debates about global kidney exchanges as you and I have. I mean, it's more than, so the term I would use, I mean, it may also be bigotry, right? But it is a deep, deep paternalism in some ways towards anyone I don't know whether it's correct to say anyone who was poor or whether it's anyone from a historically poor country, because the paternalism in some cases seems to extend to people who are not themselves poor, but are from countries that have historically been poor. And a belief that there's just sort of... no way to get valid consent, right? Or to have an exchange that doesn't lead, you know, as you noted before, lead into inevitably lead to trafficking or black markets. Is that your sense as well, Al, or is there more there?
SPEAKER_01:Well, I think there's a little more there. You know, So a recent event that I haven't gotten to the bottom of is that a whole bunch of transplantation society recently signed on to what they called a reaffirmation of transplantation in which they agree, in which they reaffirm that they think transplantation is a really good idea. These are transplant societies. And that they shouldn't discriminate against anyone on a variety of usual and not so usual grounds. criteria, you know, so race, ethnicity, national origin, and income. So I'm not quite sure what caused this to flash around the various transplantation societies, you know, the big ones, but also, you know, the liver transplant society, you know, all of those things. So I've actually agreed to go into the lion's den in September and speak in Buenos Aires at the the big international meeting of the Transplantation Society. This has been the group that has been most opposed to global kidney exchange. So if I live, maybe I'll have some data on how widespread that opposition is among the members of the Transplantation Society. But I get the sense that there might be some unrest at some of the positions taken by the leadership. But But I think they worry about black markets. But one way to worry about black markets is to say the more transplantation there is, the more opportunity there is for black markets. And I think that's exactly backwards. I think the more opportunity there is for legal transplantation, you know, in a regulated way through the medical institutions, the less black markets there'll be. I was in, as you know, I was in... United Arab Emirates in the summer in connection with a kidney exchange between Israel and the UAE. But I talked to nephrologists there who had patients who have gone to get, to buy kidneys in Pakistan. And what they said is they're still doing it, but that their outcomes are worse than before the Declaration of Istanbul, which says it's a war crime to buy a kidney. What they said is they used to go to Pakistan to get a kidney, and they'd get a kidney, and it would be in a real hospital, and they would come home with a post-operative report the way you expect from a transplant center, and it would explain what had been done, what drugs had been used, and it was a lot easier to treat them. And now they get their transplants in, they said, in villas, and they come home with no post-operative report, no information about what was done. And they often have opportunistic infections. They often are not well. And they thought that this was I don't know what evidence particularly they have, but they thought this was exactly related to the Declaration of Istanbul that had taken the illegal kidney transplants out of respectable hospitals and put them in non-hospital environments. So that's a separate question of is there more or less illegality, but a lot of the harm from from illegal black markets run by criminals is things are done in a bad way and the donors are not taken care of and the patients may not be taken care of in ways you'd like. So there are lots of harms. Think about why we object to the current state of the war on drugs in the US and why we objected to prohibition years ago. A lot of those have to do with organized crime. Prohibition funded a lot of criminal activity because it turns out Americans like to drink alcohol and made it a crime to sell alcohol. You really funded a lot of criminal organizations. And that's partly what's going on as we try to fight back markets like narcotics. More than 40% of our federal prisoners have drug convictions. And we're really tough on drug dealers. But what that means is it becomes very profitable because you chase out the big pharma companies who are formidable competitors. So partly, although we put lots of people in jail, we are, my guess is, if we really understood the dynamics of the narcotics market, is the guys who are running it are glad that it's illegal in the U.S. and dangerous and risky. I was in Northern California probably in 2016 on a vacation when there was a referendum in California to legalize marijuana for recreational use. And the The Humboldt County newspaper had accounts of the mixed feelings among the California Growers Association. Now, California has lots of farming associations with similar names, but all the other ones have a vegetable in their name. You know, the California Artichoke Growers or the California Melon Growers. But the California Growers Association grew marijuana. And they were not, by and large, it seems, reading the letters and the columns, they were not, by and large, in favor of legalizing marijuana for recreational use. And the reason is they were worried that this would bring in competition from farmers. When you talk to Illegal growers, they talk to you about how many plants they have. Farmers talk to you how many tons per acre they harvest. It's just a different scale. So I could see that if, you know, so, so, and we're seeing that now with, you know, marijuana is still federally illegal and only legal in some states. A lot of states like California, not all the growers have come in from the cold because once you come in from the cold, you can't as easily sell in the New York market where marijuana goes for much more because it's illegal. So, so thinking, you know, so, so I'm a market designer. I think about how to, how to design markets to work well. And part of that, and one reason I'm interested in repugnance is for a market to work well, it needs to have social support. But the same is true for bans on markets, for laws against them. And part of the story with marijuana is it doesn't have social support to have a ban on marijuana. I mean, there are places where people want it to be banned, but So I just published a paper and the first line is something like, why is it so easy to buy drugs and so hard to hire a hitman? And there's a simple model. It's hard to analyze, but the model is simple. And the model, I can sort of convey to you by the following conjecture. Supposing I said to you, I am coming to Florida or to Virginia and I would like to buy drugs. While I'm there, I don't want to travel with drugs on the plane, but I would like to buy some when I get there and pick a drug of choice. I don't know if marijuana is legal in Florida or Virginia. I
SPEAKER_08:think medical only, but I'm not positive. Well, Virginia has legalized, as the students told me last week, growing but not selling. Is that right, you guys? Yes.
SPEAKER_01:Okay, so supposing I said to you I want to buy marijuana, but if it'll help, supposing I said I want to buy cocaine. Since coming to California, we have lots of friends who are wine snobs, and we've decided we can't compete with that, so we've become connoisseurs of cocaine. But I don't want to travel with it. So you guys, you three, look to me like the kind of people who would know where I can buy cocaine in Virginia. So please tell me. So you probably... You may not know, and you probably wouldn't tell me even if you did. And you would also be sort of shocked. So when you got off the podcast, you'd say, poor Al, you know, he's finally tipped over the edge of senility. But that would be the end of it. Supposing instead I said to you, you know, I'm going to be coming to Virginia soon. And there's a guy at the University of Virginia who I found out refereed one of my recent papers and rejected it. And I just can't take it anymore. You look like the kind of guys who would know where I could hire a hitman. You know, I want to rub him out. Well, you probably don't know where I could hire a hitman and you wouldn't tell me if you did. But when you now talked about it after the podcast was over, you'd say, oh, poor Al, you know, he's seen Al. But then somebody would say, you know, he wants to hire a hitman. You should call the police. And and you would. I mean, you'd say this guy wants to kill one of my colleagues. He wants to know if I know a hitman. And the police would say, call him back and tell him you do. And if he goes to this dive bar on, you know, some street, ask for Joe and Joe will take care of him. And I would go and Joe would say, I need, you know, I need five thousand dollars. And I'd say, here it is. And he'd take care of me. And, you know, I'd be in jail. So so repugnance has to do partly with. With. Well, bans on markets need support. We do a great job of banning the market on Hitman, and we should stay the course. But we're doing a terrible job of banning the sale of narcotics, and maybe we should start thinking about harm reduction instead of continuing to try to put everyone in jail.
SPEAKER_08:So this is a good point. We also do a pretty bad job, I think, of banning the market in sex with some pretty sad effects. I mean... Why is do you have any thoughts on the persistent, persistent bans on some of these things? Right. Marijuana, at least at the federal level, and continuing in some states and prostitution and almost every state.
SPEAKER_01:Right. Well, so prostitution is a very interesting one. And I should turn it around and ask you guys, because the laws. So as you say, we ban prostitution almost everywhere. But in many, many places, it's a misdemeanor. And we are a country that- Or just unenforced. Yes. We're a country that has very tough laws about sexual crimes. If someone is, I forget what the right word is, but if you're convicted in the right way, you have to, a sexual offender or something. I mean, you have to register with the police wherever you go. You can't live near churches or schools. So there are- There are some cities where all the sexual offenders live in the same apartment complex because it's the only legal residence. So we can be very tough on sexual crimes, but we're not tough on prostitution. It's a misdemeanor. And so my guess is, first, we figured out that filling our prisons next to the drug offenders with the customers and the sellers of sex would not improve sex. society. And that bans on sex are very hard to enforce because many of us are around because of sex. Evolution has something to say about how hard it is to ban sex. So my guess is that the reason prostitution is against the law everywhere is if the house next door to yours starts operating as a brothel, there are some negative externalities. There's traffic and whatever. And it's easy for the police to close it down because it's a crime. Whereas if you had to go to the zoning commission and say, we're not zoned for brothels. We're a residential community. I would like you to close down this brothel. That would take a long time. So my guess is that it's a different kind of ban than the ban on... on trafficking, which we have very few convictions of because it's hard to prove. But, you know, it's a real crime where you can go to jail for a long time.
SPEAKER_08:I wonder whether in some ways it has to do as well, you know, the negative externalities that you have discussed fall sort of more broadly on the population. Yeah. the negative effects of, of say, you know, a brothel operating next door. Whereas the negative effects of the ban, especially in an under enforced or unenforced ban primarily fall on sex workers themselves who I guess are, are perhaps not a group well represented in the political system. And I mean, is that, does that have anything to do with it? You're probably more familiar with the research on sort of, the repugnance of sex work today in the general public than I am.
SPEAKER_01:Well, so I think there's two kinds of repugnance to sex work, and maybe there are two kinds of sex work. When we say sex work, we're mostly talking about voluntary sex workers who may have decided to work in sex because their other alternatives are poor, but the same could be said of coal miners and things like that. We also sometimes talk about trafficked women and children. And there we're talking about people who have much less agency. But it appears that that's a bit of a real thing, too. I mean, it's hard to gather evidence because, once again, given that everyone is a criminal no matter what, I think the system isn't set up for rescuing trafficked women. Yeah. But the sort of big empirical question about laws about prostitution are, how do they affect the welfare of voluntary sex workers and the size of the market? And how do they affect trafficking of women and children who don't get to keep the money they earn and may not get to choose what customers they have and things like that? So I don't know the answer to that, but we can start to gather some information on that, some evidence from the... places where there are different laws about prostitution including of course six years in rhode island that you know more about than anyone
SPEAKER_08:yeah yeah so i mean it's interesting and we are going to have future guests on this podcast that talk specifically about sex work um i guess i of course it's ultimately an empirical question but i remain at this point at least skeptical that um Bans against prostitution are the best way to control trafficking as opposed to more directed means. Going back to your points about black markets.
SPEAKER_01:So there's been enough variation in the laws and the designs of both the market for sex workers and the bans on market for sex that I think we can start to piece together at least– would be nice to run. I mean, social experiments at scale in some state. But what I would like to see, I think, as an experiment, I don't have enough evidence to say this would be a great social policy, is that we should legalize sex work for licensed sex workers. You need to get a license, and the license would involve not just health checkups, but sort of talking sex One-on-one, you know, once a month with a social worker so you could explain whether, you know, you had a pimp who beat you up if you didn't bring enough money home, things like that. And criminalizing being a customer of unlicensed sex workers. So you'd want to, and this way you could check up on immigration status. A lot of the, at least the thought about where trafficked women are to be found is in illegal immigrants who therefore for lots of reasons can't go to the law, things like that. So if you could be more like the six years in Rhode Island for legal and licensed and regulated sex workers and maybe more like Northern Europe for customers of sex workers, that might be a good combination that would concentrate on lessening the burden of being criminals on voluntary sex workers and allow us to identify and maybe rescue trafficked women. Now, not all trafficked women want to be rescued. The question of what does it mean to be trafficked? If you're dealing with immigration, some people made a deal to come from rural areas someplace to the U.S. and maybe are not unhappy with that deal. But still, illegal immigrants, it's a different part of the market. And separating those and trying to deal with them differently instead of a blanket ban, hardly enforced at all in any case, seems to me a way to start experimenting with social policy.
SPEAKER_08:Interesting. As you probably are aware, there is a movement in some circles, at least against sort of legalization and regulation of prostitution in favor of what they refer to as decriminalization. I don't like the term personally because I think it's a little misleading, but what they essentially mean is in many circles, you know, no real regulation other than regulation for the safety of workers themselves, or in some cases, no regulations that are particular to sex work, which I think would include testing requirements and the like. I don't know if you've followed that literature at all. I'm not
SPEAKER_01:against regulation. In other words, market design is about rules for markets and some kinds of rules are regulations put in by government agencies who have a comparative advantage for some kind of regulations. We have health regulations for restaurants and I imagine we could have health regulations for sex workers. But decriminalization is an interesting thing. So, to use the word, which, you know, I'm not a lawyer, Utah, the state of Utah, has recently decriminalized plural marriage. Okay, so, you know, there was this schism in the church. Yeah, and
SPEAKER_08:I didn't know they had done this.
SPEAKER_01:They have. I can send you... I can send you the link. As you know, I'm writing a book on repugnance. I'm in the chapter on marriage at the moment. So they've decriminalized it. So the idea of decriminalizing it was there can be some abusive marriages, but if the wives were criminals that deprive them of recourse to the law, especially if they were worried that their children would be taken away from them. So decriminalizing it, so it's now called an infraction, which I guess is a Utah word for misdemeanor, and it comes with a$100 fine, but they don't take your children away. So the idea was that's good for an abused woman, say, who wants to go to the police, but doesn't want to be treated as a criminal. On the other hand, a lot of marriage law is about divorce. So if marriage were simply decriminalized, divorces would be a real mess still. But instead, we've got lawyers for that.
SPEAKER_08:Thank goodness.
SPEAKER_01:Yes, exactly. That's what I was thinking just now. So, but, but I mean, that's better than, than, you know, the, the, the in-laws starting a family feud that goes on for generations. So, so of course, plural marriages are going to, some of them are going to dissolve, but they're not going to have regular ways to talk about custody. You know, there may be more than two parents for a child once you start talking about emotional bonds and things like that. So, so, you know, it's going to be a mess. Property and child custody and child visitation rights and child support. You know, all of those things that are sort of covered well or badly in divorce law are not going to be covered for plural marriages, even when it's decriminalized. So you can imagine that in the fullness of time, we'll start to want plural marriages all to be limited liability corporations with nice contracts that specify all these things.
UNKNOWN:Yeah.
SPEAKER_08:So one of the things that the students wanted to talk to you about is the sort of unraveling in the legal job market that you discuss. So I'm going to turn it over to either Alex or Madison. I'm not sure which of you had a plan to, you may both have questions about this. I'll let you decide how you approach it.
SPEAKER_01:Okay, let me just interject before you ask that if you're both three L's and we're on the market this year, then you must not be clerking for an appellate judge because those jobs went long ago.
SPEAKER_02:That's true. Actually, both of us got, we're both employed happily, but both of us got our jobs one L summer and just stuck with it, which is what interested me about what you were writing about how the market moves so quickly and that in some way that seemed like a failure because There's no way that the employers or us have all the information that we need to make such a long-term decision in such a compressed amount of time. I mean, we only had one set of grades out of six. So why have attempts to constrain or, I guess, redesign that market failed consistently? uh in the legal market where in other markets like in medical or or other places that have sort of a similar hiring process why have efforts there succeeded where they failed in the legal market
SPEAKER_01:okay so that's a good question and um i can i'm gonna offer you some conjectures but i don't i don't have firm evidence for them uh but let's compare the market for new law associates to the market for new assistant professors in economics. I'm engaged, as we speak, on both sides of that market right now. I'm both buying and selling new PhDs. We're not unraveled in economics. And one of the reasons is supposing we hired someone after his first year of graduate school when he still didn't have a dissertation and we didn't know what kind of economist he was going to be. Well, When we, by the time we finally hired him, even if we could still get him to come, if he'd written a bunch of great papers, you guys would know about him too. And vice versa. I mean, you hire someone who we didn't look at when he was a first year PhD student, but now it looks like he's the next John von Neumann. Well, you wouldn't get to keep him very long if he preferred to come to us than to you because we'd make them an offer. We can see his work product. It's not hidden. Whereas, If you become associates at a big law firm, there's a good chance that you'll work for some partner who will know how well you're doing, but no one else will, or maybe some small group of partners will. So if I want to hire the new associates who you hired long ago, I have to hire them sort of sight unseen. And so there's adverse selection, right? I'm a law firm in California, and I want to hire... You know, someone who just showed up as a new associate at your firm, who you hired years ago. But I can't tell them apart. So I make offers to, you know, to several of you. And the senior partner comes by. And to you guys, he says, you know, don't go to Roth's firm. That's a fine firm. But you're doing great here. You're going to make partner offers. and we'll give you a bigger bonus this year. But someone just sitting down the hall from you, he says, we hate to lose you, but Roth has a great firm. We wouldn't want to stand in your way. Go. And so I get the associates from your firm who your senior partners didn't want to keep because I can't tell. They're not publishing their papers. So I think the fact of when everyone's hiring early, my only opportunity to hire good law associates might be after their first year of law school when I can see their grades and that's all I'll ever see until they become partners and I can see who's a rainmaker and brings customers with them. So that's one issue, I think.
SPEAKER_08:Interesting. I'm not sure what that says about the... I don't want to say uselessness, but I don't want to, that might signal something about the next two years of law school where they're also getting grades. Yeah. So, Madison, did you have anything to add to this?
SPEAKER_05:I think just regarding the law clerks portion that we had talked about briefly, one of the things you mentioned in your paper was that part of the reason that limitations on law clerk hiring kind of have failed is simply because judges sort of just ignore the rules. So half the judges are saying we're going to hire early regardless of what the rules are. And because of that, the other half of the judges are like, well, I guess that means that we sort of have to move quickly as well. Do you think that there is a better way to change the way that we do law clerk hiring? Or do you think that running into this issue of certain judges moving early is always going to be an issue?
SPEAKER_01:I think a big thing in getting rid of exploding offers, which we've done in some areas, is that you shouldn't be able to capture people with an early exploding offer. So I helped fix a market for gastroenterologists where there were exploding offers, and now there's a medical-style match. And part of what we did is we got the medical schools to... not the medical schools, the gastroenterology organizations, the three principles, uh, professional organizations to make a statement that says, you know, if you accept an early exploding offer and later change your mind, you can change your mind. That would be okay. You know, the, we're, we're discouraging people from making exploding offers. So the bad guy in that story where I make you an early offer, you say yes. And then later you, you decide to go through the match. Um, The bad guy is me, not you. And that had the effect of really shutting down exploding offers. It's not that a lot of exploding offers are made, accepted, and then rejected again, right? It's the ability to capture you early that makes it exciting for me to make you an exploding offer when you're still a medical intern resident, an internal medicine resident. So I think the problem with judges is there seems to be a culture in which people can't say no to judges, right? That if you... Sometimes this is explicit in some of the cases we studied. I'm a judge and you're a law student and someone, maybe your professor, maybe Kim says to you, Judge Al has been my friend for a long time and he takes a lot of my students as clerks, but it's on the understanding that if you get an interview with him and he makes you an offer, maybe on the spot, you'll say yes. And so you have to, you know, it'll embarrass me if you don't say yes. Kim might say, I guess Kim wouldn't say that. But I think a lot of that goes on. So that means you can be captured with an early offer. And as long as that's the case, as long as... You know, the culture is such that once you've said yes to a judge, you can't change your mind. Then the temptation to make earlier office, then others will be very great. And as you say, judges are a law unto themselves. They don't have to follow the rules.
SPEAKER_08:Right.
SPEAKER_01:So the judicial conferences that try to make rules have failed.
SPEAKER_08:Up until this point, the students, other than Alex and Madison, have been muted, not because I want to silence them, but because of technological limitations. I can only merge a few tracks at a time. Here, I switched to single track recording and open up the session to more general Q&A. So there may be a difference in sound quality for the remainder of the podcast. To be honest, I'm not sure I notice a difference in sound quality. Maybe going forward, I'll save myself some time and just record a single track.
SPEAKER_06:I did have a question about whether... Can you introduce yourself, Talia? Oh, hi. Yes, I'm Talia. I'm a 3L. I had a question about whether the... legal market and exploding offers is dependent or changes due to the fact that with associate positions, we do work during the summers before we actually get hired permanently. So do you have any thoughts on whether us working during the summers would influence the rate of change that is available for us to either deny or for the firms to deny our physicians after they've seen a little bit of our actual work products on the
SPEAKER_01:job. Right. So I'm not intimately familiar with the market for associates in law firms because I don't teach in law schools and I'm not a lawyer. But my impression is that a rough description of what goes on is that second year associateships are often contracted in the summer after the first year and that many second-year associates, like a high percentage of the second-year associates at big firms, get offers to be permanent associates. So I think that's indicative of the fact that supposing I'm a big law firm and I think this is crazy and I want to hire my associates only in their third year of law school. I'm just going to wait and not hire some associates because we... I mean, I don't know how it's worked in COVID, but there was a time where it sounded like associates mostly got wooed rather than that there was lots of work that they did in the summer that was very valuable for the firm. Again, all I read in the newspaper is about the very biggest law firms. But here I am, I'm a big law firm, and I decide this is silly. I'm going to just wait till the third year. So now I have the same adverse selection problem. If I make you an offer, If you've already gotten an offer from the firm where you did a second year associate, as the majority of the associates at your firm did, the second year summer associates, then there's a good chance that you'll go work for the firm you worked in the summer. You already have friends there. You have some idea what the work is like. If you didn't get an offer, that's actually bad news that I discover only when you accept my offer. In other words, you're one of the 10% or so of summer associates who didn't get an offer to come back. And that's because the firm that hired you as a summer associate learned something about you that they didn't like. And so just as it would be difficult for me to hire the summer associates from your firm once they're already employed, because I'd only get the ones that they didn't try hard to keep. I think the same, maybe to a lesser extent, is true if I try to hire somebody else's second year summer associates, because I might only get the ones that they don't try hard to keep. So I think that's part of what's going on. But I haven't had law students who I try to guide through the market. So I would direct all these questions to Kim.
UNKNOWN:Yeah.
SPEAKER_08:Anybody else with questions about the legal market? Otherwise, I'm going to turn to you guys with some of the questions you had for Al about some of the other markets that he talked about in his papers and that you guys had questions about. OK. So one of the students, Caitlin Stallings, who I will ask to introduce herself in just a second, I thought had an interesting observation about prediction markets, and in particular, the repugnance with which the terrorism prediction market was greeted. So Caitlin, can you tell Al what we were talking about the other day?
SPEAKER_03:Yeah, so hi, Al. I'm Caitlin Stallings. I'm a third year here at UVA. We were talking about how in some ways, all markets are inherently based on predictions around death, kind of like a terrorism market, because We were talking about in class the other day, like COVID, for example, the economy as a whole has been largely for the last two years based on predictions about how COVID will affect the population. And, you know, the same goes with like life insurance. How do we, you know, reframe something like a terrorism market to make it less repugnant kind of in the way that we've reframed?
SPEAKER_08:Caitlin, you got cut off at that very end. Kind of the way in which we frame what?
SPEAKER_03:Other markets like the general economy, that sort of thing.
SPEAKER_01:Yeah. Got it. Well, that's a good question. Some of the repugnant objections to a terrorism market was that it would allow terrorists with inside information to make money from terrorist events. And I remember at the time thinking that that was a pretty weak argument because if I were a terrorist and I knew that the 9-11 attacks were going to happen, There's a much bigger market in airline stocks than you could easily imagine there ever being in airlines. in terrorism, and I would sell short airline stocks. And I bet that, and I think incidentally, if on September 10th, 2001, you happen to have sold short airline stocks, there are such people, you would get a visit from the FBI and you would have to show them that you were a short seller and you sold lots of stocks short all the time. But they wanted to know, did you have any special information that caused you to sell American Airlines short? So there were always opportunities for terrorism to affect the market, just as there are opportunities for COVID to affect the market. And those are a little hard to predict. You may recall that right at the beginning of COVID, the market generally took a sharp drop before people realized that actually there was a whole set of companies, mostly tech companies and later pharma companies, that were going to do very well from COVID. They were going to make lots of money. So predictions are complicated. I thought that particular objection was a silly objection. Of course, I don't know how much it would have helped law enforcement to have a terrorism futures market. You can imagine that we'd really want to know who placed which orders and depending how the market worked, you might be able to find out and that might help the market or harm the market in terms of its prediction ability. So there'll be a lot of market design issues to having a market for terrorism incidents or wars for that matter. Here's Russia on the borders of Ukraine. But I guess there must be Ukrainian industries that you can sell short as it is, but maybe not so easily, right? I mean, I'm not quite sure where Ukrainian stocks are mostly traded and how easy it is to trade them from the United States.
SPEAKER_08:One of the things that I found really interesting about Caitlin's question is I just thought it so much of, in my mind at least, much of the repugnance that people feel to certain transactions is really just how visible it makes things that are present in all of our society and in all of our markets, right? You know, some of the concerns that people have about coercion or exploitation in some of these repugnant markets, it's really just because it highlights sort of how unequal our society is. It's not unique to these markets, but it is highlighted by these markets in the same way that, you know, going back to Caitlin's point, you know, people are making bets based on bad things happening all the time. But because it's sort of noisy, it's a little bit harder to tell that that's exactly sort of what they're doing. Well, short selling in general is slightly repugnant. It is, I know, much to the consternation of many people and sort of who do financial regulation.
SPEAKER_01:Yeah, yeah. You know, life insurance had complicated rules. Yeah. who could be your beneficiary in life insurance? And then more recently, could third parties own your life insurance? And if you had whole life insurance, to whom could you sell it back? And the insurance companies lobbied against having, there's a fancy word for these pools now. They used to be called death pools. But you can make a mutual fund of sort of people's life insurance, which you bought from them. And when they die, the, the, uh, the article, the article, I think they're called, uh, and, um, you know, the insurance companies used to argue that, you know, selling you insurance means we're hoping you're going to live, but buying your insurance policy means someone's hoping you're going to die. And that's repugnant. Now, of course, the same insurance companies that will sell you life insurance will also sell you annuities. And then they're hoping you're going to die. So a lot of this is a framing of it. And I think viatical funds are now legal, but it's possible that if what you do is manage such a fund, when people ask you what you do, you just say, I work in finance rather than I buy up insurance, life insurance.
SPEAKER_08:Right. No, that was a particular repugnant objection that I found. It just seemed so self-serving from so much of the insurance industry that I sort of, I was surprised that it had really any traction at all, but it did. Yeah. Well, you know, Baptists and bootleggers. The classic combination. So a couple of students, both Jackson and Talia actually had some questions about refugees and sort of designing matching markets for refugees and some of our failures there. I'm going to turn it over to Jackson first to ask you a question. And Talia, if you have any follow-up, you can either... you know, follow up on what Al says or follow up on what Jackson says.
SPEAKER_00:Yeah. Hi, Al. I'm Jackson Bailey. I'm also a 3L at UVA. And I found your discussion of matching markets with regard to school choice and how they might apply to refugees really interesting. And just so going off of that and tying in repugnance, I thought maybe it'd be good to ask if Is it repugnant for rich nations to show their preferences for having refugees if they're allowed to pay other countries to house refugees that they might otherwise have matched with in this preference process? And also, does that have the potential to create a market where certain groups of refugees are then valued at a higher amount than groups of refugees from other parts of the world? And just your thoughts on that.
SPEAKER_01:I guess we already have that. Didn't former President Trump express a wish that the refugees would all come from Norway? We have a long history in the United States of trying to foster immigration from some places and not others. Western Europe, English-speaking Western Europe in particular, being a a place that a lot of immigrants came from. And then when we started to get immigrants from Southern Europe, we, along around 1920, I think, started to impose limits, national limits. And of course, we had various kinds of limits on Asian immigrants and on Mexican seasonal workers. There was something called the Bracero Program for a long time that turned into immigration and illegal immigration uh when it was ended uh so yeah we have a long complicated history of immigrants and of course um you know in a lot of you know before we talked about markets for sex you know in a lot of countries people come from sex but in america people come from immigration and um but but we're very ambivalent about it so so i think there's lots of repugnance going on but it's also you know some of the objection to immigrants i think it's it's often misplaced, but it's based on a belief that immigration causes negative externalities, right? So the politicians who campaign against immigration, they like to look at anecdotes of immigrants who have been criminals. And there's some concern that immigrants will compete for low wage labor and therefore lower the wages of unskilled Americans or that they might compete for high wage labor. You know, we have a lot of immigrants in Silicon Valley working in tech companies and maybe And of course, in academia, we have lots of professors who grew up overseas. Maybe they're keeping down the wage of law professors. So at least those arguments are based on a certain kind of fear of negative externalities, which I think are mostly unwarranted when you look at little natural experiments like the Mariel boat lift that brought a couple of hundred thousand Cuban refugees into Miami. What you mostly see is that the economy grew to accommodate them. So I've a little bit lost the thread of your question. I think refugees is a matching market because Countries can't easily control their borders, and refugees can't easily decide where they're going to go. We already, through international aid of various sorts, resettled, at least temporarily, a lot of refugees near the place where they're refugees from. So Kenya has a lot of refugees resettled. from Somalia. Lebanon and Jordan have a lot of refugees from Syria. And to the extent that we support through the UN and other things, support their maintenance in those places, we're already paying the countries near where the refugees are to take care of them. Is that repugnant? Well, it's not nice. I mean, it's not cheerful news, but It's also not crazy that you start taking care of refugees where you first find them. But for sure, the market for resettling human migrants is very broken, right? I mean, we've been reading for a long time about deaths crossing the Sonoran Desert into the United States and drownings in the Mediterranean. And recently, there were a bunch of drownings off the Florida coast, I think.
SPEAKER_08:Yes, I just read it. I think coming from Bermuda, maybe, a boat. I don't remember.
SPEAKER_01:Yeah, full of migrants. Refugee is a legal term. You have to qualify to be a refugee, but you might want to be a migrant just because you're starving or in danger from criminal gangs. So we're going to have to do better at that. We're going to have to... give people enough hope of getting where they're going that they'll be willing to stay somewhere while we process them in an orderly way, right? I mean, when you want to go to another country, you don't go in little boats. You you land dry footed from an airplane. And, you know, there's no reason why all immigration to the United States couldn't be dry footed, you know, in a in an orderly way. But we would have to have more immigration. They'd have to be a reason, you know, who are going to have consular officials in Turkey or wherever the refugees are. processing them. They have to have enough hope of getting someplace worth getting to so that they're willing to go through the process in an orderly way and we can run it. So they have to be carrots, not just sticks. And there's some repugnance.
SPEAKER_08:Anything else about refugees from you guys? Okay, I'm going to turn to Autumn. if that is okay. You actually raised an interesting point about an example that Al had used in his paper involving Italy where surrogacy is legal. Can you tell Al what we were discussing about that?
SPEAKER_04:Yeah, so I was just looking at your example where basically- Autumn, can you introduce yourself? I'm sorry, can you introduce yourself? Sorry, I'm Autumn, I'm a 3L. So yeah, I just was reading in your paper how, There's an interesting example how in Italy there, where surrogacy is illegal, the courts removed a surrogate child from the parent's place and placed them up for adoption. So I just wanted your opinion about when we say there's an action that's repugnant and that's why they're doing this, but they're replacing it with another action that could be deemed repugnant instead, when it's replacing a repugnant action with a different repugnant one. So I just wanted to see. your opinion on
SPEAKER_01:that. Yeah. You know, adoption is also full of repugnancy. I believe in, in fairness to Italy, I believe that the intended parents, the ones who wanted to be the surrogate parents, I believe neither of them was genetically related to the child. I believe they had arranged both for sperm and egg and that the Italian court, uh, didn't want to have designer babies you know that that it was not just surrogacy that they were against uh but they but that this particular couple that they thought you know why should they be the parents of this of this baby and you know there's a real conflict uh you know i shouldn't talk to you know i'm just an economist i'm not a lawyer but but There are really different kinds of courts that have to make these decisions. So on the one hand, there's sort of constitutional courts. And I think the European Court of Human Rights or whatever, some pretty high level court eventually ruled on this case and supported Italy. But there's also family courts. And family courts aren't supposed to make highfalutin decisions about what's good and bad and repugnant and not. They're supposed to decide on the best interest of the child. And so in places like Germany, where surrogacy is illegal, the German State Department didn't want to issue passports in California to German babies who were born of California surrogates, but the German family courts have started to open up paths for the parents of the baby to adopt the baby and therefore qualify the baby to come to Germany and be a German baby. And it seems to me that those are not entirely inconsistent. There's some German court that thinks that surrogacy is a terrible idea and demeans women or whatever. That's what the German law is about. But that's not the family court. The family court's supposed to look at the baby and say, we don't want the baby here tonight. We want the baby to go home with someone. And the parents are natural candidates for who the baby should go home with. So That's part of the way that bans on markets need social support. I believe, I could be wrong here, but I believe that in Germany, at least for a while, and maybe still, in vitro fertilization was illegal, right? To get pregnant through... through donor sperm with medical systems, but that it's legal in Spain. And so German women who were subfertile or who needed some kind of medical assistance in becoming pregnant could go to Spain and become pregnant and then come back to Germany and just be pregnant German women. And so a law that said that that was an illegal way to get pregnant just had no chance of being enforceable when IVF is legal in other countries. accessible jurisdictions. So, so laws about babies are complicated, but I guess states, I mean, we have lots of laws about parentage and we're changing them. So I think there's, I mean, you know, one of the things laws should do is protect the most vulnerable people and nobody's more vulnerable than an infant. So I think states have, It makes sense to have laws about who our parents are, and we can disagree about what the laws should be. But adoption and even assisted reproduction technology are not out of the realm of laws about parents. So I don't have a blanket. It's not like we shouldn't have laws about who's the parent because sometimes there are custody disputes and a judge has to decide who's the parent.
SPEAKER_08:Yeah, Al, to go to your point about sort of, you know, the different courts coming to these rulings and these sort of competing repugnancies, I mean, essentially the same thing happened in the Baby M case in the same court, right? If you recall with the court saying, no, this is not an enforceable contract, it's repugnant and it's contrary to public policy and demeaning to women and children. But then at the end of the day, doing a best interest of the child analysis, which we could, you know, contest as many people have, but in any event, nonetheless concluding that the intended parents should have custody because that was in the best interest of the child. And so even sometimes the same court can have these competing views about repugnancy.
SPEAKER_01:And best interest of the child seems like a really good legal principle. When we talk about how, well, so again, I'm going to go outside my expertise and into yours. Best interest of
SPEAKER_08:the child is not my expertise.
SPEAKER_01:Okay. But in the Supreme Court decision that legalized same-sex marriage, Ober-Gurvell versus whatever, well, the majority actually said something. They said, you know, there's no harm done. And Roberts, in his dissent, said, first of all, It's all very well to say there's no harm done, but that's not a reason not to make laws against things. We make laws against things all the time that we just don't like, you know, because they were a partner. But then he also said, you know, and next thing you know, we're going to have plural marriage. You know, it's the same arguments would apply. But one reason why the same arguments... wouldn't necessarily reply is this issue of parentage. In other words, one of the big things that goes on in divorce courts is custody of the children. And that's supposed to be best interest of the child. And it seems to me we'll probably need new thinking about that in children from plural marriages.
SPEAKER_08:Okay. Al, I know that we promised to let you go after an hour and a half because you have another appointment. So I'm going to thank you. for joining us today.
SPEAKER_01:Thank you. I feel the law is important. You guys should go out and practice law in humane and welfare increasing ways.
SPEAKER_08:I'm sure they will. Thank you, Al.
SPEAKER_01:Thank you. Bye-bye.
SPEAKER_08:Bye. We've heard it from none other than Al Roth himself. The law is important. What a treat for the students to get to meet Al and talk to him about his work. And what a treat for me as well. Thanks everybody for listening.
