01 Jun 2006

The Baby Business

A burgeoning market cries out for discipline

by Garry Emmons


In her new book, The Baby Business: How Money, Science, and Politics Drive the Commerce of Conception, HBS professor Debora Spar takes an unflinching look at a taboo topic: the myriad kinds of interpersonal arrangements and financial transactions that increasingly are bringing children into families. By viewing this widespread activity through the lens and logic of markets — and daring to define it in terms of supply, demand, and property rights — Spar aims to bring realism and thoughtful public-policy debate to a subject that most people would prefer to avoid altogether.

The U.S. market for creating and acquiring children is, Spar argues, disorganized, legally conflicted, and virtually unfettered. It includes people who sell their eggs; buy sperm from strangers; undergo fertilization procedures; pay surrogates to bear children; and finance costly adoptions. In the name of public health, morality, and fairness, it is high time, she says, to consider how to bring order to this chaotic arena.

Is this really a “market,” and if so, how big is it?
We don’t like to think of children as economic objects, and yet over the past thirty years, advances in reproductive medicine have indeed created a market for babies. Parents can choose the traits they want, clinics advertise for customers, and specialized providers are getting rich — it’s a $3 billion business in the United States alone. And that figure doesn’t include what’s paid for eggs or sperm, or for surrogacy or adoption, for which we don’t have reliable numbers.

You say that this market is driven by such deep-seated human feelings that banning it outright would be futile. Yet obviously some rules are needed.
We need to look at this area as objectively as possible and then decide where we as a society want to draw some lines. I don’t think we want to set up, as other countries have, what amounts to a central authority that looks at everybody’s choices. But we need to look at the extremes and whether there are some practices we just don’t want to allow.

For example, there’s not enough scrutiny of the health risks involved here, and we need to take care of that. We also need to decide whether reproduction is some sort of human right or whether infertility is a medical condition. If the answer is yes to either of those, then we should pay for it, as we pay for other elements of health care.

You’ve noted elsewhere that regulation can provide the legitimacy and order that nascent industries need in order to grow. Are there any calls for regulation from within the baby business itself?
In the early days of a technology, few participants want regulation, and at this stage of the baby business, such calls are few and far between. The better doctors and clinics may not realize it yet, but eventually it’s in their interest to have more regulation in order to distinguish themselves from the guy down the street who botches things up. That kind of malpractice generates negative headlines that tar the entire business, including the most skilled and conscientious practitioners and organizations.

Could regulation disqualify some people from having children? If couples can be judged by the state as unfit to be adoptive parents, shouldn’t they also be prohibited from acquiring children by other means?
Yes, there is a fear that if you start putting those kinds of regulations on the fertility market, all kinds of parents will be deemed unfit. Yet I do think there needs to be some sort of scrutiny as to who is allowed to become a parent. In one case, for example, a couple used high-tech reproduction to create more children because their existing children had been taken away by the state because of child abuse. The clinic they used knew of the situation but went ahead and helped that couple conceive. That’s a bad idea!

My guess is that if we had some kind of regulation in this area, we would impose it only in these extreme cases.

A largely unregulated system leaves open lots of different ways to acquire children but the drawback, you say, is that it benefits only those who can afford it.
In my book, I lay out various models of regulation, one of which is the jewelry model. That is, on one level, a child is a luxury item: Those who can afford it will get it, and those who can’t will not. That’s fine when we’re talking about diamonds, but the concern here is that when it comes to children, we need to think differently. If the desire to reproduce is a fundamental human trait, then those who can’t do it are at a real disadvantage, especially if they’re poor. We have to decide whether that’s an inequity that we as a society should accept.

You’ve written about the business of stem cells, which is also emotion-driven to a great extent. Can you compare it with the baby business?
There really is no business of stem cells yet. There’s research, and money going into research, but to date there are no products being sold on the open market. It’s a fledgling business.

The other major difference has to do with the regulatory environment between the two areas, and this is where I find significant irony. In the reproductive market, we have virtually no regulation. Doctors can do just about whatever they want in the lab, with the exception of cloning and one or two other things. With stem cells, by contrast, federal money cannot be used, and some areas of research may be off-limits. So in two markets where much of the raw material is the same, we regulate the market for therapies that could save existing lives much more than the market that creates new lives.

Is there any country that seems to be ahead of others in coherent policies and structure?
The United Kingdom pretty much lays out what people can and cannot do in the market. For example, women cannot sell eggs, and men can’t sell sperm. I don’t think that would work in the United States, but the British are much more accustomed to regulation than are Americans. In their context, it seems to work well. In Denmark, infertility is defined as a disease, and the national health system pays for all women under 40 to have three cycles of IVF if they need it.

It sounds like there’s opportunity out there for entrepreneurs.
There’s a lot of opportunity in intermediation or brokering, given the intimate nature of this market. As an individual, you don’t want to stand out on a street corner and tap people on the shoulder and ask them if they’d like to donate their eggs or their sperm to you. You want an arm’s-length transaction. That creates a nice market for sperm banks, egg donation, egg brokers, and egg freezing. As the technology gets better, the options will multiply and so too the opportunities for entrepreneurship.

What has been the reaction to the book?
It has generated a fair amount of controversy. The libertarians have been opposed. Some of the religious groups are split — they like pieces of it. Some parents and others are happy because somebody’s taking a rational look at all this. But there’s always a tendency for people to say, “You’re telling me I bought my child, and that’s a horrible thing to say.”

— Garry Emmons


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