One of the most famous misstatements in economics is “Supply creates its own Demand.” It was improperly identified by John Maynard Keynes as Say’s Law. Keynes used the statement to mock the self-adjusting mechanism of market prices and outputs—the way that Jean Baptiste Say and Adam Smith described market dynamics. Keynes, in contrast to Say, believed that markets often would not clear. That meant that government had to intervene with ‘brute-force’ market coordination. In this, Keynes opened wide a new role for government in the economy.
In fact, J.B. Say wrote that the act of supplying one thing constitutes a demand for something else. This is quite different from “Supply creates its own Demand.” Supplying pet rocks, or lemonade, or stainless steel sculptures to the market does not guarantee a demand for precisely those items; it does mean that the suppliers would like to exchange it for a different item. Say correctly interprets the demand-supply relationship.
With Say’s Law in mind, I have to ask whether the newly announced ability to clone dogs in the laboratory is really an instance of supply in search of a demand that doesn’t currently exist. One clue is that practically all of the active research and experimentation has been publicly funded, meaning private entrepreneurs aren’t risking a lot of dollars on this. The fact that it is possible to clone a dog with laboratory technology doesn’t mean it is worth the resources needed to do so. Only a market demand for cloned dogs, reflected in market prices, can tell us that.
So far, the prospective uses for a cloned dog are: 1) explore the physiological similarities between canines and humans, in order to pursue research on human diseases, and 2) genetically, at least, have your pet dog live forever. Both of these applications have drawbacks. Whatever the potential benefits, huge monetary and resource commitments are needed for the process.
Seoul National University recently celebrated the first successful cloning of a dog, an Afghan hound named Snuppy. The cloning process requires “a staggering amount of work,” according to researchers. The South Korean team who produced Snuppy started with over 1,000 cloned dog embryos and 123 surrogate mothers, from which two pups were born. One survived. Given the current technology and success rate, the cost of cloning for research or to continue to enjoy a treasured pet, even one time, is extremely high. And given technical difficulties, the cost of creating a genetically true series of research-bound hounds is, at present, prohibitive.
As a general rule, technological innovations are only adopted commercially if they lower costs or improve quality. If genetic duplication is more lucrative than ordinary, or even selective, breeding, we can expect entrepreneurs to pursue it. It is unclear whether continuing funds from the private sector would be forthcoming if governments withdrew their support for dog cloning projects. A market test would be informative.
Some pet cloning is already available. Cat clones, a relatively easy product by comparison to the dogs, are available commercially at about $32,000 per animal.
A human lifetime with Snuppy might require six to eight clones, or more. It can be done. The real question is: what would you pay to avoid ‘losing’ Snuppy? Even for willing consumers, having your childhood pet around, in the form of a series of genetic duplicates of the original, may be more appealing in theory than in practice. The new Snuppy (or Kitty) will look like the original, but it won’t necessarily have the same temperament or personality.
Cloning isn’t just comedy sci-fi or fantasy theme anymore, but it’s not primarily a market phenomenon, either. Since supply does not create its own demand, in a world of scarcity, we have to decide what resources we are willing to risk, and what goals are worth the costs. For now at least, dog cloning seems likely to be limited to an elaborate and expensive public funding project.