This article appeared on SubStack on May 25, 2023.

Organ sales are illegal in the United States and most other countries (Iran is a partial exception). The National Organ Transplantation Act of 1984 states, “it shall be unlawful for any person to knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce.” The penalty for breaking the law is a fine of $50,000 or up to five years in prison, or both.

In Libertarian Land, organ markets are legal. This makes everyone better off.

Consider first kidneys. People have two but can live normally with one. If the kidney market were legal, a person whose kidneys fail could purchase from a willing seller, and both could then live healthy lives.

The seller would risk that their remaining kidney might cease to function, but in a legal market, the supply of kidneys would be large and the price low, so such persons could likely buy a kidney from some future seller.

The situation is similar for liver transplants; recipients need only a partial transplant, and the donor’s remaining liver regenerates.

What about more extreme cases, where someone wants to sell a heart or other vital organ?

Such behavior might sound irrational, but imagine an aging parent in poor health (unrelated to their heart) who could earn a large sum by, in effect, committing suicide and selling their heart. The income might make it possible for that person’s children to attend better schools, or migrate to a safer country, or escape poverty. All at little cost to the quantity or quality of the seller’s life.

Why should policy interfere with such a trade? This act benefits the organ recipient as well, so it makes all participants better off. Most real world examples are less extreme, but the same principles apply.

One possible objection to legal organ markets is that some people might sell out of desperation, against their long term interest. A reasonable response is to require informed consent, rather than banning the organ market.

A second possible objection is that only the rich will benefit from legalized sales. That is unlikely, since the increased supply of organs due to legalization will drive organ prices down. Plus, private or public charities can subsidize organ purchases for low income patients, while keeping the trade legal to foster greater supply. Government funding for organ purchases might even pay for itself by improving recipient health and reducing public expenditure on health care (e.g., dialysis treatment for kidney failure).

Thus a legal market for organ sales would have the key feature of other markets: voluntary exchange that benefits both sides of the transactions.

On Friday, June 2nd at 3 PM, Cato will hold a book forum on the newly published Letters in Black and White: A New Correspondence of Race in America. This book is a epistolary correspondence between a white woman (Jennifer Richmond) and a black man (Winkfield Twyman). This book models civil discourse on race and illustrates how dialogue about this touchy subject can be difficult yet generative and, ultimately, worth it.

I am proud to have written the Foreword for this book. In that Foreword, available for free in The Journal of Free Black Thought, I explain what I see as the book’s primary benefit.

Twyman and Richmond provide us with profound lessons: the power of immersion into cultural pluralities that shed light on our commonalities while appreciating our differences; the detriments of dogma and empty sloganeering; the necessity to define ourselves by our present and not our past; the importance of a black history that celebrates triumph as much as tragedy, etc. I could go on—and the reader will no doubt uncover their own lessons—but my main point is that a dialogue between two people can hold a trove of insights, considerations, and facts that power us toward that Blessed Society.

This is a valuably informative and entertaining book. “Edutainment,” the hybridization of “education” and “entertainment,” is achieved! And what better way to convey such an important message. As I write in the foreword:

I truly believe that it is exactly what we need at this moment in the American culture war of race relations. Not only does it provide perspectives one does not get from mainstream accounts of “whiteness” and “blackness,” but it also shows the benefits of mature and honest dialogue, the need to embrace America’s virtues in the face of its vices, and the promise of classical liberal values.

I hope you can attend the book forum and read the book at your earliest convenience.

Minnesota Governor Tim Walz signed Senate File 2974, the Omnibus Human Services appropriations bill into law on Wednesday, May 24. Among the most notable features of the spending bill is that it appropriates $55.49 million in one-time grants in 2024 for:

[O]rganizations to establish safe recovery sites that offer harm reduction services and supplies, including but not limited to safe injection spaces; sterile needle exchange; naloxone rescue kits; fentanyl and other drug testing; street outreach; educational and referral services; health, safety, and wellness services; and access to hygiene and sanitation. (emphasis added)

In a recent Cato briefing paper, I reported there are currently 147 government-sanctioned Overdose Prevention Centers (OPCs)—called “safe injection spaces” by Minnesota lawmakers—saving lives in 91 locations in 16 countries. Switzerland, home of the first sanctioned OPC in Bern in 1986, has 14 of them. Germany has 25. Canada has 38.

The first two government-sanctioned OPCs in the United States began operating on November 30, 2021, after the City of New York authorized OnPointNYC, a non-profit harm reduction organization, to operate them in East Harlem and Washington Heights in Manhattan. At a Cato online policy forum in March, Kailin See, the development and implementation lead for those OPCs, told us that during the first year of operation, the 2 OPCs reversed 750 overdoses—those are 750 people who would otherwise be dead.

Rhode Island lawmakers authorized privately funded OPCs in August 2021. Two Rhode Island harm reduction organizations have partnered to open the state’s first OPC in early 2024.

OPCs are federally illegal under 21 U.S.C. Section 856, also known as the “crack house statute.” On March 1, 2023, I provided testimony to the Subcommittee on Crime and Government Surveillance of the U.S. House Judiciary Committee, in which I called on lawmakers to repeal the statute to remove federal obstacles to harm reduction organizations seeking to save lives in their communities.

I did not advocate that taxpayer funds go toward establishing or operating OPCs. Plenty of private non-profit organizations are eager to establish OPCs if only the government would get out of the way.

Among the policy recommendations in my briefing paper, I stated:

Finally, if Congress cannot repeal the “crack house” statute, it should at an absolute minimum amend existing federal law so harm‐​reduction organizations can establish and run OPCs.

So now we have New York City, Rhode Island, and Minnesota disobeying federal law. If more state and local governments continue defying federal law by authorizing OPCs, it will hopefully pressure Congress to remove the federal ban.

Over the last 48 hours, national news outlets have begun reporting that Ukrainian militias used U.S.-made armored vehicles (albeit unconfirmed by the U.S. government) in an attack over the Russian border and that Ukraine’s security services conducted a drone attack against the Kremlin earlier this month. It is important to note that despite Washington’s support for Ukraine, the United States was not involved in either attack. This recent escalation – with U.S. weapons systems in one case – is disappointing but not surprising.

Since the start of the conflict, I have written eight different editorials addressing loose weapons in Ukraine. This weapons dispersion happens for a few reasons. First, there is a history of weapons dispersion in Ukraine. According to the 2021 Global Organized Crime Index, Ukraine has one of the largest illegally trafficked arms markets in Europe, especially when it comes to small arms and ammunition. About 300,000 small arms and light weapons were reported lost or stolen after Russia seized land during the invasion of Crimea between 2013 and 2015. Of these, only slightly more than 13 percent are recovered, while the vast majority remains in circulation on the black market.

All of this was already a problem before the conflict. The invasion exacerbated these issues as the country was flooded with a sudden influx of millions of arms and ammunition and an increasing number of civilians received military training and weapons. As Rep. Sara Jacobs (D‑CA) noted at a 2022 Cato policy forum on the risk of weapons trafficking in Ukraine, the United States does not “have the capacity to do the end‐​use monitoring we were doing before” because monitoring changes when you begin to “arm an insurgency.”

This sort of weapons dispersion is not surprising, nor are its effects. Loose U.S. weapons threaten to entangle the United States in a conflict with another nuclear power by unintentionally increasing escalation against Russia, while also risking further destabilization within Ukraine if a disagreement breaks out between different armed groups or in any post-conflict situation.

The world has seen weapons dispersion of U.S. arms cause similar damage twice over the last two years. First, in Afghanistan, where the Taliban have used U.S. weapons left behind to arm themselves and generate profits. Second, in Yemen, when U.S. weapons sales to Saudi Arabia turned the United States into an unwitting participant in the conflict.

Nonetheless, while the damage done in Afghanistan and Yemen is severe, they pale in comparison to what could happen in Ukraine. Dispersion in Ukraine risks great power war and destabilization in Eastern Europe. Regrettably, there is little that the United States can do now to prevent this from continuing to happen.

Corner Post is a convenience store and truck stop in Watford City, North Dakota. Like many similar shops, its business model relies on a high volume of small‐​dollar transactions. And when customers pay for those purchases with debit cards, merchants like Corner Post pay a set fee to banks to process the transactions. Although this fee is 21 cents per transaction, the cost adds up quickly over numerous sales and is a significant operating expense for any business model that relies on small‐​dollar purchases.

The rate of 21 cents per transaction was set in 2011, when the Federal Reserve Board issued a regulation establishing that fee amount. The actual cost for banks to process each transaction ranges from 3.6 to 5 cents.

Corner Post opened for business in 2018, and a few years later it challenged this fee‐​setting regulation under the Administrative Procedure Act (“APA”) in the U.S. District Court for the District of North Dakota. Corner Post argued that the 21‐​cent rate set by the regulation was not “reasonable and proportional to the cost” that the banks incurred and that the regulation therefore exceeded the Board’s statutory authority.

But the district court never reached the merits of Corner Post’s legal argument. Instead, the court dismissed Corner Post’s case as being brought too late, holding that the suit was barred by the APA’s statute of limitations. The APA sets a six‐​year time limit for legal challenges to agency rules, and the court held that this time limit started running for Corner Post when the regulation was issued in 2011. The court thus held that Corner Post’s time to challenge the rule expired in 2017, a year before Corner Post opened its doors for business.

The Eighth Circuit affirmed the district court’s decision, and Corner Post petitioned the Supreme Court for review. The Cato Institute has now filed an amicus brief in support of Corner Post’s petition (with thanks to a team of Wiley Rein attorneys who took the lead on drafting our brief: Jeremy Broggi, Michael Showalter, Boyd Garriott, and Hannah Bingham).

Our brief explains that under the text of the APA’s statute of limitations, the six‐​year clock does not start until a particular plaintiff is actually injured (for Corner Post, it did not start until the business opened in 2018). For hundreds of years, the start date for statutes of limitations has traditionally been the date of a plaintiff’s injury, and nothing in the APA’s text contradicts that traditional understanding.

The government argues that since the APA provides for review of “final agency action,” the statute of limitations implicitly begins for all plaintiffs whenever the “final agency action” occurs (in this case, when the regulation was issued in 2011). But nothing in the text of the APA requires this reading; Congress did not explicitly depart from the traditional rule that the clock starts on the date of injury. The better reading of the APA is that the clock does not start until a plaintiff is injured and the agency action is final—in other words, finality is a necessary but not sufficient requirement to start the six‐​year clock.

The government’s argument would impermissibly protect agencies from lawsuits by businesses that did not even exist when a regulation was issued. Since Corner Post opened more than six years after the Board’s regulation was issued, the government’s approach would mean Corner Post never had a chance to challenge these burdensome regulations. The Supreme Court should take this case to correct the Eighth Circuit’s erroneous decision and allow Corner Post and others to challenge unlawful regulations.

On May 19, Minnesota Governor Tim Walz signed into law a bill legalizing all drug paraphernalia, including testing equipment and syringes, and decriminalizing drug residue. As Sophia Heimowitz and I explained in our Cato policy analysis last year, drug paraphernalia laws stand in the way of harm reduction organizations that seek to help people who use drugs avoid drug overdoses and the spread of infectious diseases.

In the late 1970s, the Drug Enforcement Administration began successfully encouraging states to enact drug paraphernalia laws and even developed and provided model legislation. Our study found that Alaska is the only state that never enacted drug paraphernalia laws. Our policy analysis called on all other states to emulate Alaska by repealing their drug paraphernalia laws.

Last June, I moderated a Cato online policy forum in which the Executive Director of Alaska’s oldest harm reduction organization compared notes with the Executive Director of Arizona’s oldest and largest harm reduction organization.

Arizona amended its paraphernalia laws in 2021 to permit syringe services programs to operate and to allow distributing and using fentanyl test strips. Still, it left most of the drug paraphernalia law intact. Minnesota, however, has gone even further by becoming the first state to repeal its drug paraphernalia laws. The law takes effect on August 1.

Hopefully, the remaining states will follow Minnesota’s lead.

Senate Finance Committee Chair Ron Wyden (D‑OR) held a hearing last week to counter the House Republican plan to cut the recent IRS enforcement boost. Sen. Wyden said, “If you’re looking for the big winners of the McCarthy IRS defunding plan, it’s billionaires and corporations who cheat on their taxes … Repealing that funding is a $191 billion giveaway to wealthy tax cheats.”

I offered a different view at the hearing. I noted that tax enforcement imposes collateral damage, that the tax gap has been stable for decades, and that the U.S. tax gap appears to be smaller than Europe’s. The “tax gap” means unpaid taxes from errors and cheating.

Here’s one problem with Sen. Wyden’s view: IRS audits find relatively smaller errors and cheating on higher-income returns than lower-income returns. As shown in the table below, IRS audits recommend additional tax of 5 to 8 percent of income for middle-income households, but just 1 to 4 percent of income for high-income households. These are averages within income groups over 2017 to 2021.

For example, for households facing additional tax, the average is $6,100 for those earning $75,000 to $100,000, which is 7.0 percent of income, and it is $117,033 for those earning $5 million to $10 million, which is 1.7 percent of income. Note that the average audit change of $117,033 for this high-income group may seem large, but that is just 6 percent of the average tax paid by these households. Also note that the large relative audit change in the bottom group mainly stems from errors and cheating on the earned income tax credit.

Why does the IRS find relatively smaller errors and cheating at the top? It may because these households are more likely to hire expert accountants and lawyers who have their reputations on the line. The relatively smaller errors at the top are impressive, given that high-income returns often involve complex issues such as business income and capital gains.

Data Notes. The IRS publishes aggregate results of audits in its annual Data Book. My table is based on a Government Accountability Office summary of the IRS data in GAO-22–104960 (p. 34).

The income groups are based on “total positive income” not adjusted gross income (AGI). However, the IRS and GAO do not appear to provide average total positive income within the income groups, so I roughly estimated it using average AGI for 2019 within AGI income groups.

A final note is that these are the additional taxes “recommended” by IRS auditors. But many taxpayers appeal these amounts and get them reduced. Also, some taxpayers challenge IRS audit results in court and many of them win, as discussed here.