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This Article considers one aspect of the ongoing debate about the moral limits of markets – namely, the purported harmful effects of market transactions on particular relations, goods, services, or society at large, due to an inappropriate valuation. In other words, the argument is that some markets are ‘repugnant’ because they degrade and corrupt a variety of nonmarket values and relations, not just to the willing parties to the exchange, but to larger segments of society. This objection contains both a (frequently unacknowledged) empirical component and a moral component. This Article critiques these empirical claims on two grounds. First, market skeptics fail to provide evidence of the negative effects they hypothesize, despite widespread variation over time and across legal regimes. Second, these objections fail to account for the well-documented human tendency to fashion repugnant exchanges in a manner that reinforces – rather than undermines – deeply held values and relationships.

We read with great interest and appreciation the careful consideration and analysis by Ambagtsheer et al. of the most critical ethical objections to Global Kidney Exchange (GKE). Ambagtsheer et al. conclude that implementation of GKE is a means to increase access to transplantation ethically and effectively.1,2 These conclusions by their European Society of Transplantation (ESOT) committee on Ethical, Legal and Psychological Aspects of Transplantation (ELPAT) represent a step forward toward a greater understanding and an open, honest debate about GKE.

Background Global Kidney Exchange (GKE) offers an opportunity to expand living renal transplantation internationally to patients without financial means. These international pairs are entered into a US kidney exchange program that provides long-term financial support in an effort to identify opportunities for suitable exchanges for both these international pairs and US citizens. Objective While the promise of GKE is significant, it has been met with ethical criticism since its inception in 2015. This paper aims to demonstrate the selection process and provide >3 yr of follow-up on the first GKE donor and recipient from the Philippines. Design, setting, and participants The first GKE transplant occurred with a young Filipino husband and wife who were immunologically compatible, but lacked the financial means to continue hemodialysis or undergo a kidney transplant in their home country. The pair was enrolled in the Alliance for Paired Donation matching system, several alternative kidney exchanges were identified, and the pair subsequently underwent renal transplantation and donation in the USA financed by philanthropy. The resulting nonsimultaneous extended altruistic chain provided transplantation for the Filipino husband and 11 US patients. Outcome measurements and statistical analysis The Filipino donor and recipient were followed by transplant professionals in both the Philippines and the USA. Follow-up data were maintained as required by the Organ Procurement and Transplantation Network in the USA. Results and limitations The Filipino donor has normal blood pressure and renal function, and the Filipino recipient is doing well 3.5 yr after their donation and transplantation. Conclusions While criticisms of GKE highlight concerns for possible exploitation of financially disadvantaged groups, these results demonstrate that these concerns did not come to fruition, and the outcome experienced by the GKE donor and recipient (and other US participants) was successful. Patient summary The first Filipino Global Kidney Exchange (GKE) donor-recipient pair continues to be followed by both US and Filipino transplant centers. Both are in good health, support the GKE program, and advocate for its expansion.

Organ shortage is the major limitation to kidney transplantation in the developed world. Conversely, millions of patients in the developing world with end-stage renal disease die because they cannot afford renal replacement therapy-even when willing living kidney donors exist. This juxtaposition between countries with funds but no available kidneys and those with available kidneys but no funds prompts us to propose an exchange program using each nation's unique assets. Our proposal leverages the cost savings achieved through earlier transplantation over dialysis to fund the cost of kidney exchange between developed-world patient-donor pairs with immunological barriers and developing-world patient-donor pairs with financial barriers. By making developed-world health care available to impoverished patients in the developing world, we replace unethical transplant tourism with global kidney exchange-a modality equally benefitting rich and poor. We report the 1-year experience of an initial Filipino pair, whose recipient was transplanted in the United states with an American donor's kidney at no cost to him. The Filipino donor donated to an American in the United States through a kidney exchange chain. Follow-up care and medications in the Philippines were supported by funds from the United States. We show that the logistical obstacles in this approach, although considerable, are surmountable.

In "Consentability," Nancy Kim tackles an important and current topic—in an age of increasing options about how to live, die, and procreate, what limits, if any, should the law place on those choices? "Consentability" is a valuable resource for scholars and policymakers alike, summarizing the arguments for and against government intrusion on the choices of consenting adults with encyclopedic thoroughness. After weighing the arguments, Kim proposes that “bodily integrity exchanges” be permitted, subject to limitations. Although we agree with the general conclusion that bodily integrity exchanges should be permitted, we disagree with the specific limitations that treat the decisions of the poor as suspect, proposing instead methods of structuring payments and the consent process that would enhance the decision-making quality and reduce the possibility of impulsive decisions for all donors— not just those meeting an arbitrary definition of poverty. In any event, when it comes to a life-saving transaction like kidney donation, it is ethically important to consider the welfare of the recipient as well as the donor.

Lauren Edelman’s Working Law: Courts, Corporation, and Symbolic Civil Rights (2016) is remarkably relevant to the study of financial regulation. In particular, three factors that Edelman identifies as contributing to legal endogeneity and symbolic compliance—ambiguous law, a lack of clear outcome measures, and the presence of legal intermediaries—are especially salient in this context. It has long been recognized that powerful financial institutions and the lawyers, lobbyists, and other agents who serve them have the ability to influence the law ex ante, through political lobbying. Edelman’s work reinforces the point that they may also do so ex post through an endogenous process of interpretation, implementation, and, ultimately, enshrinement of symbolic compliance with ambiguous law.

Researchers have made progress in understanding the role of repugnance in transactions involving the human body. Yet, often, the focus remains on exchange between individuals and how they mentally cope (or not) with repugnance. But these exchanges also entail a “vertical” dimension in which organizational and state actors both directly manage repugnance and also limit the repugnance management tools available to the marketplace. Analyzing repugnance and its management as an organizational and regulatory problem, in addition to an individual one, suggests that a single, harmonized system of exchange in bodily goods is unlikely to emerge with the passage of time.

Today, more than five years after Dodd-Frank was first signed into law, uncertainty surrounds many aspects of the Volcker Rule’s application and ultimate impact on financial markets and bank stability. Many more years will likely pass before that uncertainty is resolved. We demonstrate through a quantitative and qualitative analysis that these difficulties were presaged by the Volcker Rule’s political history. The Volcker Rule -- originally rejected by Congressional lawmakers and economists within the Obama administration as unworkable -- arose as a political concession designed to quiet critics who contended that Dodd-Frank did not do enough to control risky bank activity. But deep divisions about the proper scope of the rule persisted even as the statute was signed into law, ensuring that these debates continued into the rulemaking phase. Efforts to influence the Volcker Rule at the agency level began immediately after presidential signing and persisted until enactment of the final rule. Those expressing an opinion on the rule included affected industry members, academics, public interest groups, private individuals, and state and foreign governments, among others. Systematic analyses of meeting logs and comment letters reveal that much of this activity involved the market making exemption. Specifically, commenters disputed how broadly the exemption should be interpreted and applied, the extent to which limitations on banks’ abilities to make markets would reduce market liquidity, and the likely costs of any such reduction, should it occur.

This article seeks to illustrate egg donation's incompletely commodified status through an analysis of two cases of first impression, highlighting the tensions that arise from attempts to reconcile egg donation's reality as a robust commercial industry with the nonmarket norms that traditionally underlie reproduction. Antitrust and taxation litigation may seem unlikely sources for guidance in navigating the tensions in egg donation's uncertain place between the worlds of gift and market exchange. Nonetheless, this litigation forces an explicit consideration of how egg donation is perceived, talked about, and operationalized, and where along the gift-market spectrum it fits. These cases also engage familiar questions of commodification, coercion, and exploitation, which are surprisingly central litigation issues.

Policy Shock examines how policy-makers in industrialized democracies respond to major crises. After the immediate challenges of disaster management, crises often reveal new evidence or frame new normative perspectives that drive reforms designed to prevent future events of a similar magnitude. Such responses vary widely - from cosmetically masking inaction, to creating stronger incentive systems, requiring greater transparency, reorganizing government institutions and tightening regulatory standards. This book situates post-crisis regulatory policy-making through a set of conceptual essays written by leading scholars from economics, psychology and political science, which probe the latest thinking about risk analysis, risk perceptions, focusing events and narrative politics. It then presents ten historically-rich case studies that engage with crisis events in three policy domains: offshore oil, nuclear power and finance. It considers how governments can prepare to learn from crisis events - by creating standing expert investigative agencies to identify crisis causes and frame policy recommendations.

If the American Society for Reproductive Medicine's recommendations for egg-donor compensation limits have been successful, they violate antitrust law. If they are ineffective, egg donors are not being sufficiently protected against coercion and commodification.

In "The Dignity of Commerce", Nathan Oman sets out an ambitious market theory of contract, which he argues is a superior normative foundation for contract law than either the moralist or economic justifications that currently dominate contract theory. In doing so, he sets out a robust defense of commerce and the marketplace as contributing to human flourishing that is a refreshing and welcome contribution in an era of market alarmism. But the market theory ultimately falls short as either a normative or prescriptive theory of contract. The extent to which law, public policy, and theory should account for values other than economic efficiency is a longstanding debate. Whatever the merits of that debate, we conclude that contract law does not need morality as envisioned by Oman — a fluid, subjective, and seemingly instinctual approach to the morality of markets.

Financial institutions have always been exposed to operational risk - the risk of loss from faulty internal controls, human error or misconduct, external events, or legal liability. Only in the past decade, however, has operational risk risen to claim a central role in risk management within financial institutions, taking its place alongside market and credit risk as a hazard that financial institutions, regulators, and academics seriously study, model, and attempt to control and quantify. This newfound prominence is reflected in the Basel II capital accord, in numerous books and articles on operational risk, and in the emergence of a rapidly expanding operational risk management profession that is expected to grow at a compound annual rate of 5.5%, from US$992 million in 2006 to US$1.16 billion in 2009. This increased emphasis on operational risk management corresponds to a much wider trend of responsive or enforced self-regulation, both in the United States and internationally, that attaches significant importance to the internal control and compliance mechanisms of business and financial institutions. Driven by legal changes and well-organized compliance industries that include lawyers, accountants, consultants, in-house compliance and human resources personnel, risk management experts, and workplace diversity trainers (hereafter, legal intermediaries), internal compliance expenditures have increased substantially throughout the past decade, assuming an ever-greater role in legal liability determinations and organizational decision-making, and consuming an ever-greater portion of corporate and financial institution budgets. This chapter situates operational risk management - particularly those components of operational risk related to legal risk and the risk of loss from employee misconduct - within the broader literature on enforced self-regulation, internal controls, and compliance, arguing that the increased focus on operational risk management portends both positive and negative effects. On the one hand, business and financial institutions that are law abiding and avoid unforeseen and unaccounted for disasters are an obvious positive. At the same time, however, all operational risk management is not created equally. Some operational risk expenditures may prove more effective at enhancing the profits or positions of particular firm constituencies and legal intermediaries, or luring regulators and firm stakeholders into a false confidence regarding operational risk management, than at significantly reducing operational risk losses. Indeed, recent rogue trading losses such as those at Societe Generale and MF Global Ltd. demonstrate that operational risk measures such as those embraced in Basel II are no substitute for sound firm management and regulatory oversight.

Market design and matching have been especially important for markets in which the use of money is viewed as repugnant or distasteful. This article employs the example of kidney exchange, with a particular focus on a new form, global kidney exchange (GKE), to highlight the manner by which repugnance and the law limit exchange and create scarcity. Yet it also opens the door to innovation that, at each stage of market development, prompts new repugnance concerns and initiates a renegotiation of legal rules, social norms, and institutional barriers.

In this Essay, we examine a case in which the organizational and logistical demands of a novel form of organ exchange (the nonsimultaneous, extended, altruistic donor (NEAD) chain) do not map cleanly onto standard cultural schemas for either market or gift exchange, resulting in sociological ambiguity and legal uncertainty. In some ways, a NEAD chain resembles a form of generalized exchange, an ancient and widespread instance of the norm of reciprocity that can be thought of simply as the obligation to “pay it forward” rather than the obligation to reciprocate directly with the original giver. At the same time, a NEAD chain resembles a string of promises and commitments to deliver something in exchange for some valuable consideration--that is, a series of contracts. Neither of these salient "social imaginaries" of exchange--gift giving or formal contract--perfectly meets the practical demands of the NEAD system. As a result, neither contract nor generalized exchange drives the practice of NEAD chains. Rather, the majority of actual exchanges still resemble a simpler form of exchange: direct, simultaneous exchange between parties with no time delay or opportunity to back out. If NEAD chains are to reach their full promise for large-scale, nonsimultaneous organ transfer, legal uncertainties and sociological ambiguities must be finessed, both in the practices of the coordinating agencies and in the minds of NEAD-chain participants. This might happen either through the further elaboration of gift-like language and practices, or through a creative use of the cultural form and motivational vocabulary, but not necessarily the legal and institutional machinery, of contract.

This article employs section 619 of the Dodd-Frank Act, popularly known as the Volcker rule, to examine agency level activity during the pre-proposal rulemaking phase – a time period about which little is known, despite its importance to policy outcomes. By capitalizing on transparency efforts specific to Dodd-Frank, I am able to access information on agency contacts whose disclosure is not required by the APA and, therefore, not typically available to researchers. I analyze the roughly 8000 public comment letters received by FSOC in advance of its study regarding Volcker rule implementation, and the meeting logs of the Treasury Department, Federal Reserve, CFTC, SEC, and FDIC prior to the Notice of Proposed Rulemaking. This analysis reveals significant public activity, but also a stark difference in investment by financial institutions versus other actors in influencing Volcker rule implementation. It also reveals a greater unity of interest among financial market participants than would be suggested by press reports and the provision’s legislative history. Finally, the data shed light on the efficacy of the notice and comment process as a means for federal agencies to engage the general public.

Throughout the world, baby selling is formally prohibited. And throughout the world babies are bought and sold each day. As demonstrated in this Essay, the legal baby trade is a global market in which prospective parents pay, scores of intermediaries profit, and the demand for children is clearly differentiated by age, race, special needs, and other consumer preferences, with prices ranging from zero to over one hundred thousand dollars. Yet legal regimes and policymakers around the world pretend that the baby market does not exist, most notably through prohibitions against baby selling - typically defined as a prohibition against the relinquishment of parental rights in exchange for compensation. This Essay explores the costs of societal pretense that legal baby markets do not exist. Those costs include scarcity, foregone opportunities to address market failures, an inability to develop regulations designed to further particular public policies unlikely to be advanced solely through the goal of profit-maximization, and the promotion of rent-seeking. This Essay focuses specifically on the rent-seeking problem, arguing that, although frequently defended by those who contend that commercial markets in parental rights commodify human beings, compromise individual dignity, or jeopardize fundamental values, bans against baby selling (at least as currently written and enforced) serve little purpose other than enabling anti-competitive behavior by the most economically and politically powerful baby market participants.

Over the last generation, the concept of diversity has become commonplace and taken-for-granted in discourses ranging from law to education to business. In higher education, for example, it is hard to imagine a faculty job search or a student admissions discussion that was not heavily laden with talk of diversity, in the sense of the representative inclusion of women and racial and ethnic minorities in a group or organization. In this paper we present the results of an interview-based study of the discourse of diversity in a particular business setting: the corporate boardroom. Our principal observation is that - thirty-one years after the Supreme Court's Bakke decision introduced the term into public discourse - corporate insiders appear not to have arrived at a master narrative to explain the pursuit of diversity on boards of directors. Instead, their accounts stress a variety of factors and feature few concrete examples.

Since ancient times, legal scholars have explored the vexing question of when and what a contracting party must disclose to her counterparty, even in the absence of explicit misleading statements. This fascination has culminated in a set of claims regarding which factors drive courts to impose disclosure duties on informed parties. Most of these claims are based on analysis of a small number of non-randomly selected cases and have not been tested systematically. This article represents the first attempt to systematically test a number of these claims using data coded from 466 case decisions spanning over a wide array of jurisdictions and covering over 200 years. The results are mixed. In some cases it appears that conventional wisdom is correct. For example, our data support the claim that courts are more likely to require disclosure of latent, as opposed to patent, defects. In addition, courts are more likely to require full disclosure between parties in a fiduciary or confidential relationship. On the other hand, our results cast doubt on much of the conventional wisdom regarding the law of fraudulent silence. Indeed, our results challenge ten of the most prominent theories that have been asserted to explain when courts will require disclosure. We find that courts are no more likely to impose disclosure duties when the information is casually acquired as opposed to deliberately acquired and that unequal access to information by the contracting parties is not a significant factor that drives courts to require disclosure. We do find, however, that when these two factors are present simultaneously courts are significantly more likely to force disclosure. Perhaps most interestingly, although it is generally understood that courts have become more likely to impose disclosure duties over time, we find that courts actually have become less likely to require disclosure over time.

Across a range of legal regimes - including environmental, tort, employment discrimination, corporate, securities, and health care law - United States law reduces or eliminates enterprise liability for those organizations that can demonstrate the existence of "effective" internal compliance structures. Presumably, this legal standard rests on an assumption that internal compliance structures reduce the incidence of prohibited conduct within organizations. This Article demonstrates, however, that little evidence exists to support that assumption. In fact, a growing body of evidence indicates that internal compliance structures do not deter prohibited conduct within firms and may largely serve a window-dressing function that provides both market legitimacy and reduced legal liability. This leads to two potential problems: (1) an under-deterrence of corporate misconduct, and (2) a proliferation of costly - but arguably ineffective - internal compliance structures. The United States legal regime's enthusiastic embrace of internal compliance structures as a liability determinant is consistent with the increasing influence of what are referred to in this Article as "negotiated governance" models that seek to improve government regulation and/or the litigation process through more cooperative governance methods that provide a governance role to the regulated group and other interested parties. Drawing on the incomplete contracts literature, this Article argues that, although the negotiated governance model provides valuable descriptive insights into the mechanisms by which legal rules develop, the model's proponents minimize the dangers of opportunistic behavior during the renegotiation phases of governance (that is, the implementation and enforcement phases) by those with the greatest stake in the meaning of incomplete law - in this case, business organizations and legal compliance professionals, including lawyers.

This essay discusses two recent episodes in the financial derivatives industry and the television coverage of those episodes. Our discussion focuses on (1) the 1994 bankruptcy of Orange County and the 60 Minutes television program describing that county's derivatives losses and (2) the 1998 near-collapse of Long-Term Capital Management (LTCM) and the PBS NOVA program describing that hedge funds' losses. Orange County and LTCM appear at opposite ends of the spectrum of recent derivatives losses. Orange County's Treasury was a one-man show, and its now-infamous treasurer, Robert L. Citron, was a seventy-year-old college dropout. In contrast, LTCM was a slick, sophisticated hedge fund, led by John Meriwether, whose principals included two Nobel laureates and several "rocket scientists" recruited from the investment bank Salomon Brothers. Notwithstanding these differences, Orange County and LTCM had two things in common: each lost more than a billion dollars on derivatives and each shrouded the details of its operations in secrecy. Coverage of LTCM was more accurate than coverage of Orange County. We discuss possible reasons for the difference and make some recommendations about how television programs could depict the derivatives markets more accurately, an important issue given the substantial number of policymakers who learn about derivatives through television. We conclude that television, when done properly, is more than capable of keeping pace with derivatives markets.

Whether and how the federal securities laws should restrict insider trading is one of the most hotly debated topics in the securities law literature. Paradoxically, both the theoretical analysis and the legal rules concerning insider trading remain extraordinarily vague and ill-formed. What is the special character of insider trading that leads to this apparently irresolvable puzzle? In this Article, I argue that there is, in fact, nothing special about insider trading that creates this dilemma, but rather there is something special about the nature of information itself. Accordingly, this theoretical dilemma is not limited to insider trading regulation, but rather pervades all areas of intellectual property law. In this Article, I situate insider trading regulation within the larger body of intellectual property law by discussing three potential allocations of the property right in valuable inside information. First, inside information could be treated as a public resource, meaning that a person in possession of inside information could not legally exploit that advantage for personal profit. Such a regime would forbid some or all insider trading by forcing the disclosure to the marketplace of inside information prior to trading. I argue that regulators should reject this alternative because, despite it's proponents' tendency to justify the rule in terms of fairness, this proposal is unlikely to foster fairness in any meaningful way. Alternatively, the property right in valuable inside information could belong to issuers, as the producers of such information. I argue that regulators should reject this alternative because, despite its proponents? tendency to frame their arguments in terms of promoting informational efficiency, a legal regime treating inside information as the property of the issuer is unlikely to further that goal. In fact, such proposals assume an affirmative answer to a question that is fiercely debated in other areas of intellectual property law: does creating a property right in information producers incentivize additional production to the extent necessary to offset the social costs of excluding others from use of the information? Finally, the property right in valuable inside information could reside with "outsider traders" (traders who possess inside information, but are neither insiders nor constructive insiders of the issuer). I argue that regulators should pursue this alternative because, although there is no need to encourage issuers to create valuable inside information, the need to encourage the dissemination of such information to the marketplace has been recognized for many years. Accordingly, I propose in this Article a system of federal securities regulation that would permit trading by corporate outsiders who did not receive their information in a tip from an insider or constructive insider. Such a system, I argue, provides the hope of filling in the gaps left by the current disclose or abstain system, by encouraging the reflection of material information in stock market price without disclosure of the actual inside information. At the same time, this proposal avoids the perverse incentives and negative impacts on market efficiency attendant in a system that permits insider trading by corporate employees.

In this article, I analyze the motivations underlying the actions of "rogue traders" - market professionals who engage in unauthorized purchases or sales of securities, commodities or derivatives, often for a financial institution's proprietary trading account - and the motivations of the managers or supervisors who are assigned to oversee such traders. After beginning with the observation that rogue trading incidents are neither new nor isolated events, I argue that the continued existence of pervasive rogue trading has remained a mystery for industry observers, particularly given both the extensive legal regime and formal institutional policies apparently designed to curb such behavior. If firms are comprised of rational wealth maximizers who, by definition, behave in a manner that enhances their own self-interest, then why do managers and employee-traders engage in conduct that jeopardizes not only the continued existence of the firm, but also jeopardizes the integrity of the markets in which the firm operates? Drawing on insights from the fields of psychology and social norms, I argue that most commentators have underestimated the benefits of rogue trading to traders, managers, and, arguably, shareholders. Furthermore, commentators have underestimated the costs to managers and shareholders of curbing rogue trading. Accordingly, a cost-benefit analysis indicates that financial institution management has made a conscious decision to foster an institutional culture that tolerates at least some rogue trading. Consequently, contrary to the conclusions of most other legal scholars, I conclude that market forces cannot be expected to eliminate rogue trading, because eliminating the conditions that give rise to rogue trading is not in the best interest of traders, managers, or, perhaps, of shareholders.