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The market for this service was small and quiet at first, composed almost entirely of men who couldn’t inseminate their wives through natural means. For them, sperm banking was entirely a nonmarket operation; it was only a step in the process of artificial insemination (AI). Before long, however, observers of the field noticed that there was an additional demand for insemination, one that transcended both the marital link and the normal bounds of markets. Many women, it appeared, were eager to obtain sperm that did not necessarily come from their husbands. Some of these women had husbands with genetic diseases; others had husbands who couldn’t produce sperm under any conditions; still others had no husband but a desire to produce children nevertheless. In each of these cases, sperm banking solved a problem and created a market.

The commercial market started slowly, as reproductive clinics edged into the business of intermediation. Initially, the clinics used sperm only from their patients’ husbands. Then they began taking donations from friends or family. And then they realized that a more impersonal system could actually enhance both the quantity and the quality of the sperm supply. By moving toward the market—soliciting donors and paying them a nominal fee—the clinics could reduce their dependence on their patients’ circles of friends and impose a more anonymous form of quality control. Using donated sperm, women (and their husbands) wouldn’t actually have to choose a man to father their child. They only had to choose his sperm.

If we consider this progression in purely economic terms, it parallels the growth of any market. At stage one, production occurs only within the boundaries of the family. At stage two, barter appears, bolstered by the personal ties of relationship. And then at stage three, the producers begin to specialize, selling the components of production across an impersonal, rule-bound market. [9] Presumably, neither the suppliers nor the customers of donated sperm wanted to see their relationship as part of a commercial transaction, but that’s what it was. By 1980, there were seventeen frozen-sperm banks across the United States, offering more than one hundred thousand samples for sale. [10] They furnished the raw material for twenty thousand babies that year, charging roughly $66 per specimen. [11]

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