Outsourcing pregnancy and limits on free markets

Outsourcing pregnancy and limits on free markets

We need to strike a balance between free markets and social needs

Markets pervade our society. For transportation we have Uber, for living space Airbnb, and for tickets Stubhub. Even the right to pollute is for sale, at 13 (HK$111) per metric tonne of carbon dioxide, on the European emissions market.

Michael Sandel, the renowned Harvard University professor, complains: “We have drifted from having a market economy to being a market society.”

Some people praise this expansion of market values. Libertarians believe markets promote individual freedom by allowing parties to engage in mutually beneficial agreements. The libertarian philosophy is that, as long as coercion is not involved, a trade of any sort will only occur if both parties stand to gain. Thus, any such trade should be permitted.

The only problem is when such a deal may harm a third party. For example, if my neighbours rented out their flat to be run as a nightclub, the noise would bother me, and I would not benefit from the deal.

Yet, despite the expanding role of markets, it is illegal in many countries for two parties to sign a contract for the exchange of certain goods or services. Notable examples include prostitution, organ exchange, and commercial surrogacy (an agreement under which the surrogate receives compensation beyond the reimbursement of medical expenses).


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A libertarian would argue that prohibiting such transactions violates individual freedom. Preventing a transaction that would have benefited both parties, and doesn’t harm a third, reduces economic efficiency. This, they argue, harms society.

Strictly speaking, bans on activities like commercial surrogacy do reduce economic efficiency: two people who have found a willing surrogate mother cannot enter into a monetary transaction.

Many parents pay women in countries where commercial surrogacy is legal and costs are cheap – the most popular choice is India – to be surrogate mothers. This is effectively outsourcing pregnancy.

It is also legal in many countries for individuals to enter into unpaid surrogacy agreements.

So should commercial surrogacy be prohibited?

Supporters of the ban say that many women sign surrogacy contracts only because they need the money. Financial problems may force an individual into a contract she would otherwise reject, they say.

On a more complex level, people like Sandel argue that adding the word “commercial” to surrogacy devalues the human body. As a society, it is argued, we have agreed that the human body is precious. This sanctity is violated when someone essentially rents out their womb. We live in a society that does not wish to objectify humans in such a way. In contrast, unpaid surrogacy hints at compassion, not objectification.

Objectification of the body, it is claimed, fosters unhealthy attitudes towards the poor. Allowing the underprivileged to be paid for surrogacy may lead to a social expectation that the impoverished act as surrogates to support themselves. And this could lessen support for welfare measures.

However, often left out of arguments about morality and legality is the presence of black markets. From the American experiment with Prohibition (when it was illegal to make or sell alcohol) in the early 20th century to the current war on drugs, it is very clear that when people want something, they find ways to get it – legal, or otherwise.

Governments usually ban things like drugs and other criminal activities to preserve public morality. Yet such laws can empower criminals and promote a culture of lawbreaking among citizens.

Legalisation, on the other hand, is not always the best solution: it would likely increase the consumption of harmful substances and more people would take part in illegal activities.

In outlawing commercial surrogacy, the majority of the international community has decided that the adverse effects caused by legalisation would be far more serious than the creation of a black market.

Striking a balance between morality and markets is difficult. Under libertarianism, it makes sense to grant individuals the freedom to enter into contracts that don’t harm others. Outright bans can cause damage. But we must draw the line somewhere between individual freedom and social needs.

This article appeared in the Young Post print edition as
Markets and morality

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