Living wills

21st May, 2005

Dear Economist,
I realise that I may not die a simple death, but I don’t want to lie comatose for years and I don’t want my family to argue about what happens next. Would a “living will” solve the problem?

— Edgar Andrews, Boston

Dear Edgar,

It does seem that a living will, instructing doctors to withdraw treatment if your brain dies, would do the trick. But medical decisions are not black-and-white and cannot be reduced to a set of contractual contingencies. In everyday life, incomplete contracts are accompanied by a bit of give-and-take along the way. In the case of your brain-death, this simply would not be possible.

So somebody should have “residual control rights”, which are the rights to make decisions when the contract is vague or silent. Appoint someone – your wife, say – as your proxy, and she will interpret your wishes.

Of course, if somebody else – your father, perhaps – has a stronger view about what should happen to your body, he will be able to pay your wife to do what he wants. There is no need for the family to argue. Your father can pay your wife a few thousand dollars (or more, if that is what it takes) to secure her agreement.

If she refuses, that indicates that she has the stronger preferences about how to dispose of you.

For the rest of us, the most important thing is that property rights over your body are clear. In the recent case of Terri Schiavo, they were disputed strongly enough to produce enormous transaction costs.

You may not care about such transaction costs. You may be more worried about the prospect of your wife and father striking a deal that does not respect your preferences. But as economist Steven Landsburg observes, in a charming article titled “Imagine Terri were a Toaster.”, if your brain dies, you won’t have any.

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