ArticlePDF Available

Black Market Medicine: An Ethical Alternative to State Control

  • Med-Consilium
Black markets cannot exist in a free society. They are the
stigmata of interference with the voluntary exchange of
goods and services. The road to an underground economy is
paved with state planning, regulation and intervention. Pol-
itically oriented distribution of public resources invariably
creates market imbalances. Excessive market tensions in
state controlled economies sooner or later lead to price con-
trols, restrictions and rationing. Such standard bureaucratic
cures for market distortions penalise both producers and con-
sumers. In mixed economies, imperilled industries react by
lobbying for protectionist measures, while consumer groups
press for more price control. If powerful enough, both suc-
ceed in steering parliamentary action. Protectionism and
over-regulation run rife and stifle incentives for efficient pro-
duction. More and more intervention is called for, which ul-
timately climaxes in crisis situations: marginal producers are
phased out of official markets by unrealistic price freezing;
over-regulated outlets fail to meet demand; the more adven-
turous amongst unprotected entrepreneurs turn for survival
towards informal distribution channels, whilst impatient con-
sumers look for ways to jump the queues. At this point, the
economy is ripe for the black market.
Most economists are familiar with the above scenario. Re-
cent history has indeed shown that, if unopposed, the inter-
vention cycles of state controlled economies always result in
(1) falls in production, (2) inefficient distribution, (3) ram-
pant corruption, and (4) flourishing black markets.
Medical services are not immune from this process. Black
market medicine is not a theoretical concept. It is a blatant
reality in many parts of the world. This paper proposes to
dwell on the ethical questions raised by the underground
practice of medicine.
Black market medicine can be defined as the practice of me-
dicine outside existing legal frameworks. These frameworks
vary from one country to another. Thus when a Madras sur-
geon grafts a kidney bought from a living donor, he is ac-
complishing a legal, socially useful and lifesaving action. A
Harley Street doctor performing the same type of curative
organ transfer in a London hospital is party to an illegal
transaction. If found out he will be spared no ignominy.
When Manchester born Doctor Jack Preger sets up his medi-
cal tent in the sidewalks of Calcutta, as he stubbornly does
every morning in breach of Indian laws, he knows he may be
having to spend more time at the police station or in court
before the day is over, than in attending to the sufferings of
his needy patients. A Swiss Red Cross team engaged in
similar humanitarian action near the Afghan border will be
offered near diplomat status and a warm welcome from Pak-
istani officials. Bare-hand Philippino surgeons command
some measure of respect in their native island. Their craft,
alas, is not easily exportable. Two elusive Philippino healers
ingloriously ended their Alpine career in jail after several
months of highly successful albeit illegal practice of their art
in the rooms of otherwise sedate Swiss hotels. As these
examples suggest, the forms underground medicine can take
from one country to another, depend qualitatively on the sec-
tors of state involvement in health matters and quantitatively
on the degree of bureaucratic regulation of medical services.
For the sake of clarity some kind of classification is necess-
ary. Four main types of services or commodities are poten-
tially available in an underground health market:
1. The patient contracts for standard medical care outside
public health laws with a practitioner trained in medical
school, holder of a University degree in medicine and bound
by the Hippocratic Oath or some equivalent ethical covenant.
This can be called standard black market medicine. Such a
service usually thrives wherever the public health systems
boasts a legal monopoly over heavily rationed medical ser-
2. The patient contracts for forms of health care not avail-
able otherwise, with practitioners not trained in medical
schools and not licensed by law to deliver medical care.
Health healers, bare-hand Philippino surgeons, naturopaths,
etc. are in this category, which can be defined as under-
ground alternative health care.
3. The patient contracts with healthy individuals on a com-
mercial basis for specific health related services such as sur-
rogate pregnancies or organ transfers whenever these are
restricted or forbidden by existing law. We can name this
the underground bio-transaction market. One cannot doubt
that if the present trend towards political regulation and cur-
tailment of human gene technology continues, we will soon
be faced with a specific black bio-market for gene surgery.
4. There is of course a black market for pharmaceutical pro-
ducts. This encompasses both addictive, recreational or per-
Political Notes No. 54
ISSN 0267-7059 ISBN 1 85637 022 4
An occasional publication of the Libertarian Alliance,
25 Chapter Chambers, Esterbrooke Street, London SW1P 4NN email:
© 1990: Libertarian Alliance; Louis Alphonse Crespo.
Louis Alphonse Crespo is an orthopedic surgeon in Switzerland.
He is the Swiss representative of the Libertarian International.
The views expressed in this publication are those of its author, and not
necessarily those of the Libertarian Alliance, its Committee, Advisory
Council or subscribers.
Director: Dr Chris R. Tame
Editorial Director: Brian Micklethwait Webmaster: Dr Sean Gabb
formance enhancing drugs, as well as curative drugs either
restricted by rationing of imports (e.g. antibiotics in Eastern
Europe) or unavailable because of bureaucratic regulations
governing the introduction of new drugs (e.g. those of the
FDA in the US).
There is a strong case against laws which force healers out-
side regular markets. These laws violate freedom of contract
as blatantly as those which would imprison doctors and pa-
tients within closed bureaucratically regulated markets.
Much could also be said on the perverse side effects of “the
moral equivalent of war” governments have launched against
drug black marketeers. Such isues, however, lie somewhat
beyond the scope of a study meant to focus on the relation-
ship between the underground market and the medical ethic.
Only those types of black market services which involve the
professional group bound by the Hippocratic code of conduct
(i.e. medical practitioners) will therefore be dealt with here.
The Hippocratic covenant is at the core of medical ethics.
The Oath is basically a moral contract between the gradua-
ting physician and his teachers tacitly binding him to all his
future patients. This contract is specific to medical practice
and constitutes the common ethical deonominator which
traditionally governs the conduct of the medical profession.
The Hippocratic code rests on two basic principles known to
all medical doctors. The first obligation being of course “to
treat patients to the best of one’s ability and judgement and
above all not to harm them or do them wrong.” The second
precept stresses the confidential nature of the contract be-
tween patient and physician: “I will keep silence on what-
ever I see or hear concerning the life of men in my
attendance of the sick ...”
Much has been written on the political cotrol of medicine
and its effects on medical ethics. Ernest Truffer, a Swiss
ENT surgeon, was the first to expose, in 1981, the emer-
gence of a “veterinary ethic” whenever and wherever intru-
sion from third parties led to a breach of the Hippocratic
contract. Indeed few are the doctors today who do not have
to face, in their everyday practices, the moral dilemmas and
ethical compromises which plague the delivery of healthcare
in a bureaucratically regulated environment.
If, as it clearly appears, state intervention is leading to a
gradual erosion of medical ethics, two questions must be
answered before the medical profession can consider with-
drawing its cooperation with the state on ethical grounds:
does government intervention proceed from an ethical postu-
late morally superior to Hippocratic values? If this be so,
the shortcomings of state medicine can be denounced, but
there is no point in opposing, at least on moral grounds, the
legitimacy of state control. Assuming on the other hand that
we find no clear cut ethical justification for government ac-
tion, a second question follows: is a Hippocratic ethic at
lesser risk in the black market than within current legal
Let us deal with the first question. Is today’s government
control of medicine - a heritage from Bismark’s Prussian so-
cialism - morally justified whatever the losses incurred in
terms of our Hippocratic legacy? The moral code of a single
well defined professional group is of course easier to identify
and to defend than that of a complex institution such as gov-
ernment. Taken outside its medical context, the Hippocratic
ethic is after all nothing but an expression of natural law. It
sets the guidelines by which the ailing, the wounded and the
weakened members of a thinking species can be looked after
and cared for. The very terms of the Hippocratic covenant
are designed to safeguard the fundamental interests of the
weaker of two contractants. It ensures that patient and doc-
tor contract as equals. The Hippocratic contract is attuned to
the fundamental axiom of self ownership: each human being
belongs to himself and not to others. Whether he is ailing or
not does not alter this basic truth. The doctor is not the
owner of his patient’s body, neither is the health administra-
tor nor the politician. The reverse is also true. The patient
cannot own the doctor, he can only contract for his services.
The health administrator can regulate the doctor’s work only
if both doctor and patient voluntarily consent to regulations.
Slavery is never far when contracts are tainted with coercion.
The Hippocratic legacy cannot possibly clash with any legal
framework which respects the axiom of self ownership and
its corollary that one must not do harm to others. As long as
all parties respect the property rights all individuals have
over their own minds and bodies, and over the product of
their work, there can be fundamental moral conflict between
the medical doctor, and a law enforcing agency, whether it
call itself the State in an open system or the Mafia in an
underground system. Looking at the past history of these
two powerful institutions one may see that neither can claim
a spotless record when it comes to elementary respect for
property rights.
We have so far established that medical actions are morally
acceptable insofar as they are founded on the primum nihil
nocere principle, the obligation, above all else, to do no
harm. We must now take a closer look at the state and try to
find a common denominator for all of its actions. We must
find a hallmark which would be as specific to state agents as
the primum nihil nocere principle is to the medical pro-
We are of course all familiar with the forms taken by state
intervention in everyday life. The day we are born, our par-
ents register us in state files. They are penalised if they fail
to do so. Compulsory education comes next, on grounds of
the commendable goal to fight illiteracy (although Mormon
fathers are known to have been shot to death by US agents
for attempting to school their offspring outside official in-
stitutions). Then we have military service, seldom voluntary.
And of course the inevitable taxation of our income as soon
as we start working for a living. Now, what is it that distin-
guishes state intervention in our lives from that of other ben-
evolent institutions such as the churches, the Salvation army,
the Diners’ Club, our family doctor or our favourite aunt?
The answer comes in one word: coercion! We cannot refuse
to pay taxes or do military service without dire conse-
quences: in the best of cases some of our property will be
forcefully seized by the tax man, or we will be bodily taken
away from our homes and imprisoned. If we happen to re-
fuse armed cooperation with government when it engages in
that murderous rampage known as war, our lack of com-
pliance is tantamount to “treason” and can cost us dearly. In
every one of these cases the property rights individuals have
over their own bodies and over the product of their work, are
violated. We should be cautious about the moral code of an
institution so readily prepared to resort to violence in order
to implement its goals. Let us assume, however, that wicked
as the state may be when it tramples the rights of young men
who refuse to be trained as cannon fodder or when it com-
pels working citizens to feed its bureaucracy with part of the
product of their toils, it may after all be redeemingly moral
when it comes to interventions in medical matters.
As stressed before, it is an instinctive notion of our species
that those in direct need of care must be helped in some way.
One could argue that if an organisation such as the state is
the best agent for the realisation of this end, it could be logi-
cal and moral that the medical profession, which after all
follows the same goal, should be subordinated to the state in
its delivery of care. However, is the state, when it intervenes
in health care, truly guided by the principle that all in direct
need must be taken care of?
Bismark was probably the first modern ruler to implement a
coherent national system of state controlled health care de-
livery. That such social endeavours were dictated by politi-
cal expediency, rather than by moral considerations, can be
suspected of a man who professed that: ... Historys great
problems must be solved by blood and iron. Bismark
understood that only a strong German society structured in a
Prussian military way would efficiently furnish both the iron
and the blood needed for present and future power games.
The social security scheme was the glue for this design.
Some early socialists saw Bismarks project as a bribe, in-
tended to divert the working class from true socialist revol-
ution. The prospect of outflanking rival socialist orators,
may indeed have proved a powerful prod for a consummate
political strategist such as Bismark. Whatever the ulterior
motives, Bismarks social security turned out to be a far
more radical and pioneering step towards socialist control of
society than inefficient programs such as Soviet five year
plans or ephemeral experiments such as the Paris Commune.
From its inception, state control over medicine has had at
best an ambiguous relationship with ethics. It will on the
other hand remain intricately related to power politics. The
mechanics of present day state intervention in health matters
tend to corroborate this perception.
In all fairness, it is not possible to pass a moral judgement
on state intervention in medical matters without looking at
the decision making process which commands such action.
One cannot determine whether decisions implemented by
state agents in the medical field are dictated by ethical or
moral considerations, without first identifying the decision
makers. Politicians and civil servants will generally answer
that the ultimate decisions are taken by the people. This
could theoretically be true in countries where the rule of
civil servants and politicians over citizens at large is checked
by the principles of direct democracy. Even in such model
democracies as Switzerland however, one could quote in-
numerable instances where those in power manipulate the
democratic decision making process to suit their own ideo-
logical or political pursuits.
Let us make, for the sake of argument, the very hypothetical
assumptions that there exists an ideal democracy where deci-
sions taken by the people are untainted by previous manipu-
lation by politicians and where civil servants comply with
these decisions and implement them scrupulously. In such a
system citizens will tend to vote according to emotions or to
immediate interests. Many will enter the polling booth with-
out full information on the issues put to ballot (and may
even unwittingly undermine their own interests by their
vote). Some may let their moral principles guide them in
their choice but it is not certain this group would command a
majority. Even if, against all odds, a majority of fully
briefed citizens, overcoming emotions and egoisms, did oc-
casionally attune their ballot to moral principles, the moral
priorities of citizen A and B will not necessarily match those
of citizen C, nor will they take into account the egoistical
interests of citizen D. In fact, every democratic vote ulti-
mately does some violence to the interests and aspirations of
the defeated minority. Is such violence truly moral?
Doctors and patients everywhere constitute a minority with
respect to citizens at large. The potential dangers they face
even in a utopian democracy are evident: their fate can be
settled by a process which escapes their direct control. In a
planned society the funding of the health system is in com-
petition with that of the armed forces, of education, of
leisure, etc. The diversion of public funds towards the con-
struction of sports facilities often meets with more popular
support than the equipping of public hospitals with magnetic
resonance scans. From the very earliest times, ruling politi-
cians have acknowledged the importance of the circenses
even if they have sometimes tended to forego the panem.
Ceaucescu starved the Roumanians, but did not fail to offer
them a Nadia Comanecci.
The issue of people power is theoretical. If one breaks
down the state as an institution into its different components,
one can see that, whatever the political regime, final deci-
sions are made by politicians and implemented by civil ser-
vants. They are the ones who must answer for the course of
action taken by the institution. They cannot disown personal
responsibility for their actions by claiming to be the agents
of a superior power. The moral legitimacy of the state must
be examined in the light of the moral standards of its agents.
Politicians and civil servants respond to various motivations.
The former might enjoy the taste of popularity, power and
honours whilst the latter will often be guided by an under-
standable desire for a safe career in an environment free
from the risks of the market place. Except for party loyalty,
dutiful repayment of political debts and equitable balancing
of lobby pressures (more important than balancing budgets),
ethical imperatives seldom get past the rhetoric state in the
political market. The public political discourse is rarely in
tune with the true intentions of the politicians nor is it con-
sistent with the end results of their actions.
It is no secret that todays government actions in health mat-
ters are dictated by economic considerations, not immune to
the pressures of conflicting health lobbies. Medical doctors
lobbies are overpowered by those of other interest groups.
The sick and the lame and the wounded have other battles to
fight than those of the political arena: except for AIDS activ-
ists, few have had the stamina to build resilient influence
lobbies. In fact if one goes beyond the rhetorics of welfare,
one can see that practically everywhere today, public health
policies have come to reflect the interests of the stronger
members of society! It logically follows that if one puts the
Hippocratic ethic on one side and that of government inter-
vention on the other, the moral balance unquestionably tilts
in favour of the medical ethic. This brings us to the obvious
conclusion. There is no moral justification for state control
of medicine. We can go further and postitively state than
any action by state agents which interferes with the Hippo-
cratic covenant is clearly immoral. The fact that there may
be laws or decrees which condone such intrusion is irrele-
Having established that the Hippocratic ethic is not safe in a
state controlled health system, one has yet to demonstrate
whether its survival in an underground market is possible.
Let us examine in turn different forms taken by black market
medicine and try to establish if they meet the ethical criteria
defined at the outset, namely: is the self ownership axiom
respected, is the primum nihil nocere principle safe and can
the confidentiality of the medical contract be safeguarded?
The last point is the easiest to demonstrate. Insofar as black
market medicine is by definition an illegal activity, confiden-
tiality is an essential condition of its existence. There is
little room for third parties. It is therefore obvious that the
confidentiality of the medical contract is safer in the black
market than it would be even in an open market free from
state intrusion.
Let us now look at the underground fate of the primum nihil
nocere precept. The patient who resorts to underground
medical services has in fact made a voluntary choice. After
assessing the quality of treatment he would be getting at low
cost in the public sector and that which he expects to receive
in the black market at a cost, he has opted for the latter. His
freedom of choice does not stop there: in an underground
system he is free to choose his doctor. Practitioners compet-
ing for black market patients have a potent incentive to de-
liver the best possible treatment. A dissatisfied customer can
land his doctor in jail! Doctors in the state monopoly cannot
quite match that which builds up in an underground situ-
ation. The accountability of the physician is greater in the
black market: he cannot dilute his personal responsibility
when things go wrong or hide behind the heavily protected
legal environment of state medicine. It is easier for a doctor
to treat his patient to the best of his ability and judgement
in the black market than in a state controlled system which
constantly pressures him to ration his time and care.
How does the self ownership axiom fare in the black mar-
ket? Publicly financed medical care fosters a peculiar rela-
tionship between patients and political health planners.
Sooner or later, the latter tend to act as the owners of the
former. Patients loose their freedom of choice whilst doctors
forfeit their professional independence. In the black market,
the patient pays directly for his medical care. His contract
with the physician subordinates him to no-one. He is and
remains the owner of himself.
The notion of self ownership in the black market can also be
studied from another angle. Defending the morality of the
black market by approaching the emotionally charged issue
of the brokerage and sale of organ transplants may seem a
perilous course. Yet this controversial topic best highlights
the relationship between the self ownership and market.
The shortage of legal donors and the risks linked to pro-
longed hemodyalisis has led to an active black market in the
sphere of kidney transplants in countries where organ sales
are banned. Doctors partaking in such transactions have
been accused of unethical conduct and have suffered heavy
legal and professional sanctions.
Lawmakers who condone the bureaucratic rationing of medi-
cal technology are not necessarily in the best moral position
to condemn kidney brokers whose transactions, letting aside
emotional reactions, objectively diminish the number of vic-
tims of dialysis quota fixing. As long as the biological trans-
actions, letting aside emotional reactions, objectively dimin-
ish the number of victims of dialysis quota fixing. As long
as the biological transaction is done fairly, with a consenting,
fully informed and healthy donor, the fact that an individual
should part with one of his organs for altruistic reasons or in
exchange for money, is his prerogative. In giving or selling
an organ for transplantation, he is exercising in full the
ownership rights he has over his own body. If one must at
all costs find a villain in commercial bio-transactions one
should not point at the risk taking broker nor at the ailing
receiver but rather turn ones eyes to the welfare planner
whose tamperings with the market breed such dire situations
in which the destitute find it more expedient to sell their or-
gans in black markets than to sell ordinary goods in ordinary
What conclusions can we draw from these considerations.
The first is that a complex collective institution whose entire
action ultimately rests on coercion cannot be expected to fol-
low a consistent moral code. The second is that when such
an institution is empowered with total control of medical
care, it becomes easier for the physician to stand by his own
ethics in an underground environment than within the institu-
tions monopoly. The ethical doctor in the black market can
neither be goaded nor coerced into forsaking his principles.
Doctors willing to overlook the Hippocratic covenant will
find many opportunities for fulfilment as state employees:
the difficult environment of the black market is not for them.
Defying the law can sometimes be the only course left for
the doctor faced with legislation contrary to his ethics. In so
doing he is guilty of no crime other than that of non-cooper-
ation with a morally empty institution. By thus refusing vi-
olence to his conscience, not only does he act as a worthy
disciple of Hippocrates: he also demonstrates his will to live
as a free man in a free world.
Peter H. Aranson, Rational Ignorance in Politics, Economics and Law,
Journal des Economistes et des Etudes Humaines, vol. 1, no. 1, 1960, pp.
Lewis Albert Alesen M.D., The Physician’s Responsibility as a Leader, The
Caxton Printers., Caldwell Idaho, 1953.
Frank Chodorov, The Income Tax: Root of All Evil, Devin Adair, New York,
Bertrand De Jouvenel, The Ethics of Redistribution, Cambridge University
Press, 1951.
Hernando De Soto, El Otro Sendero, Instituto Libertad y Democracia, Lima,
Peru, Editorial Printer Colombiana, Bogota, 1986.
Wendy McElroy, Demystifying the State, The Voluntaryists, Baltimore,
Maryland, 1982.
Elizabeth Pflanz, Aspects éthiques, juridiques et commerciaux des
transplantation dorganes, Panorama Medical, 1990/I, Berne.
Murray Rothbard, Power and Market, Sheed Andrews and McMeel,
Mission, Kansas, 1970.
Ernest Truffer, Independent Medicine, Hippocratic Medicine, Paper
delivered to First Iatros Congress, Sydney, 1981.
Ludwig Von Mises, Socialism, Liberty Classics, Liberty Fund, Indianapolis,
Carl Watner, Towards a Proprietary Theory of Justice, C. Watner,
Baltimore, 1976.
ResearchGate has not been able to resolve any citations for this publication.