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In Praise of Rules

Debora Spar of the Harvard Business School argues that new medical technology can't go unregulated forever.

BY Rachel Gotbaum // Summer 2006
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Debora Spar

Dennis Kleiman for Proto

As breakthroughs emerge in reproductive technology, stem-cell science and genetic research, the public clamors to know how and when these technologies will reach them. But there’s a more important question, contends Debora Spar: How and when will they be regulated? Spar, a political economist and an associate dean of the Harvard Business School, says a new technology can exist without laws for just so long. Policymakers have a window of opportunity during which they can either make or break a technology, for both its developers and consumers.

Q: Why have politicians generally been slow to regulate new technologies?

A: When Samuel Morse brought his telegraph to Washington in 1838, politicians thought it was magic, not technology. It takes a while for the rest of the world to figure out how to create rules for something new. People once said that governments couldn’t control the Internet because it crossed national borders. But you can control some elements of it—keeping seven-year-olds from watching porn, for example. There are benefits to these controls, and many people would prefer physical protection, national security and privacy over total freedom. There’s a similar reluctance to regulate reproductive technology because society is uncomfortable admitting that we’re treating babies as commodities; yet we’ve reached the stage at which we need rules.

Q: Which you argue in your new book, The Baby Business. Why regulate reproduction now?

A: Infertility has always affected about 10% to 15% of adults. But now many cases are treatable, and people who once would have viewed their infertility as simply bad luck now want cures. Their demands, combined with the high cost of treatments, are forcing society to consider whether infertility is a medical condition. If it is, we need rules that treat it that way. If you need coronary bypass surgery, we’ll find a way to get it for you. But we consider infertility treatments luxury goods.

Q: But rules can emerge too soon, as you’ve observed about stem-cell research. Or there may be too many.

A: Absolutely. If you put too many rules on technology, innovation will suffer. That might explain why the United States tends to lead the world in this regard: We almost never put rules in place until new technologies have been exploited and a market has been created. But stem-cell research is a troubling exception—and it’s one of the few areas in science during the past century that the U.S. government has not supported with significant money.

Q: How does lack of federal funding affect stem cells’ business potential?

A: This is incremental science, akin to the Human Genome Project. Hundreds of scientists are each working on small pieces of the puzzle; to put it together, you need big money. And even though we like to think of the United States as the Wild West of capitalism, the fact is that a lot of big money doesn’t want to fund highly speculative, early-stage ventures, let alone ventures that may someday be deemed illegal.

Q: So, if we must depend on private funding, what’s the best model?

A: There are two possibilities. In a typical capitalist model, the science would shift quickly toward areas that might lead to products. In that case, we would expect investors to patent and take ownership of ideas, since that would enable them to reap their profits. But these activities could also threaten the kind of collaboration that, especially in early-stage research, tends to drive progress. What’s worse, some research will be abandoned prematurely because it doesn’t look commercially viable. An alternative model is philanthropy—very rich people, whose goals are social, not monetary, funding basic research. That’s how the birth-control pill was developed: funded almost entirely by one wealthy woman.

Q: Whatever stem-cell “products” are finally developed will be physical commodities. How do we regulate something less tangible—like information?

A: We know what the rules need to be when you’re selling cars, but when we start selling products based on genetic information, we don’t know how to think about property rights. When a woman sells her eggs, is she selling property? Not exactly: She’s really selling her DNA and the prospect of a life to be created from it, and it’s hard to assign commercial value to that. If your hairdresser takes a piece of your hair and extracts your DNA, can he sell it?

Q: Is there a lesson here?

A: Yes: that anarchy only lasts for so long. It’s great to have periods of chaos and euphoria when technologies create new markets, but the best businesses will advocate regulation because protecting intellectual property rights and setting technical standards will be in their own best interest. I explain it to my students this way: Some bureaucrat will decide how many prongs are needed for toaster plugs. If your company makes toasters with four-pronged plugs, you have to hope that the standard is set at four. That’s how rules can confer power.

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