Peak Blood?

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?

Although most academic economists do tend to think in equilibrium terms, in an important paper titled “The Market as a Creative Process,” James Buchanan and Viktor Vanberg present an alternative vision of markets — markets as a means or creative process for achieving such values as human self-expression and creativity — instead of markets as a goal-oriented or teleological end, such as efficiency or utility maximization. In the words of Buchanan and Vanberg, if markets are open-ended and non-deterministic, “any insinuation … of a ‘telos’ toward which the process can be predicted to move must be inherently misleading.”

But are vampires a special case? After all, if vampirism is contagious — if vampires procreate via blood sucking — then vampirism carries with it the seeds of its own destruction, whether we view markets as a creative process or as moving toward some equilibrium. But this critique begs the following question. If vampires exist, and if vampirism is contagious, etc., etc., then why are there still so many humans — over seven billion of us at last count!

In any case, to the extent some humans would actually prefer to become vampires — economist Steven Levitt immediately comes to mind; listen to the beginning of the Freakonomics podcast — legal markets would channel vampire procreation in a positive sum and mutually beneficial direction. Rather than taking blood by force, risking lethal retaliation, vampires could actually charge people for the privilege of being bitten!

Summing up

Over the last few blog posts, I have considered a wide variety of objections to legal markets in blood: Vampires aren’t real. Too many people fear the undead. Vampires prefer raiding to trading. Vampirism is contagious and thus self-destructive.

None of these arguments, however, hold water. First, even if vampires are not real (or are they?), it is still useful to imagine a world in which actors with diametrically opposed interests — vampires and their victims — are still able to engage in mutual cooperation.

Secondly, even if most people fear vampires, legal markets put a cost on our fears and thus help us to overcome our fears. In brief, the true or economic costs of not trading with vampires are the benefits foregone — not just revenues or profits, but also friendship and romance — from not interacting with vampires.

Thirdly, even if vampires prefer raiding to trading, raiding exposes vampires to the risk of lethal retaliation. Legal markets, by contrast, provide a safe and positive sum outlet for expressing and satisfying our preferences and creative impulses.

Lastly, even if vampirism is contagious and self-destructive — thus leading inevitably to a “tragedy of the blood commons” — legal markets offer the best solution to this potential problem. Legal markets require well-defined property rights along with the enforcement of contracts, and it is these conditions that reduce the risk of overuse or, in the case of vampires, oversucking.

Before concluding, do you see a pattern here? Ironically, the various arguments and claims made against markets in blood actually help to show why blood markets are a good idea! Moreover, there is deeper lesson to be learned here: legal markets not only reduce violence; they also break down cultural barriers and unleash creative impulses…

I thus conclude this post with three conjectures: (1) Legal markets in blood would benefit both humans and vampires. (2) With legal markets, the rate of vampire violence would decline dramatically. (3) Legal markets would break down social and cultural barriers between humans and vampires.