Third of three guest posts by Enrique Guerra-Pujol
A final and potentially devastating argument against blood markets is that such markets would be self-defeating or self-destructive. Some of my Freakonomics commentators noted that “vampirism is contagious” and that “vampires procreate via their bite.” Or as Glen Whitman ominously puts it in his essay “Tragedy of the Blood Commons” (in chapter 15 of Economics of the Undead), “At present, humans are plentiful and vampires relatively rare—but that pleasant condition may not last forever.”
Why not? Because if vampires procreate via their bite, then each vampire bite converts a potential blood seller into a blood consumer (i.e. a fellow vampire) and thus every vampire bite reduces the aggregate supply of blood. At some point, vampires (blood buyers) will not only outnumber humans (potential blood sellers) but the number of humans or sellers will dwindle to zero and the market for blood will collapse.
This notion of “peak blood” is similar to the familiar and oft-lamented problem of “peak oil” — the point in time when the maximum rate of extraction of petroleum is reached after with the rate of petroleum extraction is expected to enter terminal decline.
But this line of reasoning is actually an argument for legal markets, not against them! With legal markets based on well-defined property rights, owners of blood will have a powerful incentive to manage and conserve their blood resources; without such legal markets, we run the risk of a tragedy of the commons. For my part, I favor assigning rights to human blood to humans, but such rights could just as well be assigned to vampires! [Note: Ownership of humans by vampires is the solution proposed by the vampire-economist author of Chapter 15, mentioned above. – GW]
Lastly, notice that the “peak blood” argument assumes that markets move toward some equilibrium or end state. But, frankly, I don’t think this standard equilibrium assumption is warranted. What if, instead, markets are open-ended, evolutionary, creative processes?