My Take

Milking the market for all it's worth

PUBLISHED : Tuesday, 09 July, 2013, 12:00am
UPDATED : Tuesday, 09 July, 2013, 5:04am

The economic boom from trade without barriers over the last couple of decades has given advocates more evidence that market forces are better at shaping things than a controlled economy. But as the law of supply and demand is applied in more areas, evidence is emerging that a free market is not all milk and honey.

Recent reports of an agency in Shenzhen offering wet nurses for adults is clearly an example of that.

A section of people there apparently believe that breast milk is rich in nutrients and good for adults. To cater to them the agency offered nurses for hire at about 16,000 yuan (HK$20,000) per month to provide breast milk. The "client" can drink straight from the breast or from bottles. After the reports came out, the agency denied offering such services, but advertisements the firm placed earlier cast doubt on the denials.

"Consuming human breast milk is quite popular among my social circle … spending 10,000 to 20,000 yuan hiring a wet nurse is not uncommon at all," Southern Metropolis Daily quoted an anonymous client as saying.

Even in the home of free-market capitalism, the United States, market forces throw up practices that make you cringe.

In his book What Money Can't Buy, Harvard professor Michael Sandel describes the business of "viaticals" - whereby insurance policies on people dying of Aids are bought by punters who pay a lump sum to a patient and cash in when they die - as an example.

Another similar business was "life settlement". The idea was to buy life insurance of people aged 65 or over, usually worth a few million dollars, and go on paying premiums. The buyer then collects the death benefit when the insured person dies. Former CNN host Larry King hit the headlines in 2007 when he tried to cancel a deal through which he sold two US$15 million policies for US$1.5 million. He told the court that the broker had misled him and his lawyer complained: "We do not know whether the owner is a Wall Street hedge fund or a mafia don."

Sandel argues that greed is not the root of this. In his opinion, it is "the expansion of markets, and of market values, into spheres of life where they don't belong."

The Shenzhen report is an example of that. A business that sought to milk what someone saw as a heaving demand.