Saturday, November 19, 2011

Why I Disagree with Legalization of Prostitution

I guess I have not fully elaborated my points on my previous post on prostitution and inequality, as I might need to address some concerns from those who are in favor of legalizing prostitution. You can read some of their main arguments here. Their arguments can be summarized as follows: by regulating the industry, the government can give incentives to the industry players to treat the women better, create a safer environment, and by doing so, helping the women for a better life. Furthermore, if it's truly a voluntary transaction, people should be free to do so. As good as they may be, I disagree with these lines of arguments, and I am not even talking about morality issues.

First of all, I doubt that regulating prostitution will be more efficient than making it illegal. We know that people respond to incentives. In other words, the government may require people to comply with certain regulations, but if there are no legal enforcements, it is most likely that they will not comply. The case is similar to prostitution. So when the government actually regulates prostitution, there would also be enforcement costs to ensure that the entire industry comply with the rule. Can the defenders of legalization show that the costs will be cheaper rather than enforcing law against prostitution. Because if the net effect is same, why bother legalizing it?

Second, I'm surprised if there is any free market defenders who support the notion that the government should regulate prostitution in order to protect the women. Most free market defenders despise government intervention in the market. The market works best when there is no intervention as usually, people will only enter into a voluntary transaction if that transaction benefits the relevant parties. So I find it amusing that some people ask the government to interfere with the prostitution market. Not only it shows that the business is inherently bad that we need government help to deal with it, it also shows that they tend to forget that intervention by regulation does not always end up well, which will lead us to my third point.

The major question is, what type of regulation that will be needed for an industry like prostitution? To what extent will we allow people to freely sell their body? Can we say that in line with the rising of the price, the consumers are allowed to demand more extreme sex actions? Should we allow consumers to sue the women in case their performance is not satisfying? Should we allow wives to sue the men and the prostitutes in case the wives found out the act in accordance with the principle that each party should be liable for the externalities that they cause to third parties and therefore are obliged to compensate such third parties? Or, in accordance with the Chicago style, when transaction costs is low, resources will be allocated efficiently, meaning that the prostitute and the husband will "pay" the wife for the right of having an affair.

I mean if we agree that people are free to do everything as long as they "voluntarily" agree to do so, why bother making safety regulation? This is precisely in line with the case of whether there should be a mandatory safety regulation in a construction project if the employer has offered bigger payment for those who want to take higher safety risks. The main issue is what would be the correct price where additional risk taking is justified. If those who agree with legalization of prostitution can accept this notion, I will rest my case. But if we are still talking about protecting the right of the prostitutes, the legalization does not have a strong case other than whether the costs of enforcing the protection are cheaper than making it illegal.

But let us stop this debate for a while. What are we trying to achieve here? The better protection of the women? Or finding what idea should win between the freedom of women with her own body and the compliance with moral values? The first is important and pragmatic, the latter is simply meaningless in practice. If we agree that the whole debate is made to find the most efficient and effective way to protect women from abusive treatment, then we are in the same track.

Let us remember that prostitution consists of 2 type of worker, i.e., those who might enjoy the profession and receive good benefits (the lucky ones), and those who are not lucky, which will stay in poverty, who are prone to high risk of death and terrible sickness. Those who have already enjoy a good position surely want to regulate the profession. It gives them better protection. But the case is not the same for the unlucky ones, which sadly, can be in the majority.

Now, for the unlucky ones, I disagree with legalization. The fact that they are in that state shows why we should not trust that the pimps and customers will treat them better without strong enforcement action from the government. As I said in my previous post, rather than spending costs for enforcement of regulation, why not spend the money to actually reap the profits of the pimps and the money of the customers to compensate the prostitutes? What do you think is the main incentive for pimps to send women to prostitutes? Money! If such incentive is taken, would they still do it? If they are being required to give their entire profits and capital from the business and then the funds are distributed to the women, wouldn't that be better? Of course the sanction will not work if the fine does not reflect the entire benefit of the business. This is standard economic analysis, if the benefits of doing criminal activities are higher than the costs, the criminal will most likely do it.

So if the defender of legalization says that the fine is not effective, most probably because the fines do not reflect the whole economic benefit of prostitution and the prostitutes do not receive any compensation, which of course will induce them to return to their usual life. Remember, in my proposed solution, prostitutes should not be sanctioned. The target should be the pimps and customers, which will effectively increase the costs of doing prostitution and hopefully reduce the level of prostitution itself. I can imagine a sanction where not only the customers will need to pay a huge fine (which will be distributed to the prostitutes), his name will be also publicly announced. This business can survive for so long, partly due to anonymity, destroying such advantage will impose a significant costs to the customers and I expect that their behavior will be pretty much affected.

Another thing about legalization, is there any guarantee that legalization of prostitution will effectively erase all illegal prostitution? If the legalization is made on the basis that we need to protect the women, is there any guarantee that customers will comply with all the safety standard regulation? Isn't there a possibility of a black market where all of those earthly desires, which reject all notion of limitation, still exist? And in such case, legalization does not have an effective purpose other than dividing the customers into two types, the nice ones who go to the legalized brothel, and the bad ones who go to the illegal brothel. Of course, further empirical research is needed to support this argument. But this is something that must be considered by the proponent of prostitution legalization in case the probabilities are huge.

2 comments:

philry4n Sunday, November 20, 2011 1:50:00 PM  


The case is similar to prostitution. So when the government actually regulates prostitution, there would also be enforcement costs to ensure that the entire industry comply with the rule. Can the defenders of legalization show that the costs will be cheaper rather than enforcing law against prostitution. Because if the net effect is same, why bother legalizing it?


Yes there will be cost for enforcing the legal prostitution business to comply with the industry/service standards. Why bother? Safer transaction for the worker and customers, regulated industries, taxes, insurance for the workers, minimum salaries, severance pay etc.


The major question is, what type of regulation that will be needed for an industry like prostitution?


Service industry types? Like Massage Therapy Industry regulations probably?

To what extent will we allow people to freely sell their body?
To the extent of what is comfortable for the seller and safety standards.


Can we say that in line with the rising of the price, the consumers are allowed to demand more extreme sex actions?


Yes, if these services are available and complying with the safety standards.


Should we allow consumers to sue the women in case their performance is not satisfying?


Depends on how the presale agreement perhaps? It also depends whether s/he is an independent contractor or a part of a business entity as a worker.


As I said in my previous post, rather than spending costs for enforcement of regulation, why not spend the money to actually reap the profits of the pimps and the money of the customers to compensate the prostitutes? What do you think is the main incentive for pimps to send women to prostitutes? Money! If such incentive is taken, would they still do it? If they are being required to give their entire profits and capital from the business and then the funds are distributed to the women, wouldn't that be better?


These steps only cuts the middle men and make the government as the middle men. 'Want to pay for sex? Here just pay the government some money and we will distribute the money to all sex workers'


Another thing about legalization, is there any guarantee that legalization of prostitution will effectively erase all illegal prostitution?


No.


If the legalization is made on the basis that we need to protect the women, is there any guarantee that customers will comply with all the safety standard regulation(s)?

Safety standard regulations are to be complied by the industry, the industry can force the customers to act accordingly?

Isn't there a possibility of a black market where all of those earthly desires, which reject all notion of limitation, still exist?


Yes there's a probability they will still exist.


And in such case, legalization does not have an effective purpose other than dividing the customers into two types, the nice ones who go to the legalized brothel, and the bad ones who go to the illegal brothel.


Yes it divides the customers into two types, but also the industry (whether they are the sex workers, pimps, cleaning services, administration staffs, business owner) into two types: the legalized one with arguably better pay, better insurances, pay taxes just like any other legal industry and the 'bad' ones that are illegal.

Pramudya A. Oktavinanda Monday, November 21, 2011 9:44:00 AM  

Thanks for the insightful comments! Again, you have elaborated the usual arguments for legalization of prostitution, especially with respect to the improvement in the quality of life of prostitutes.

I wonder though, how much money will be spent by the Government to ensure that the industry will fully comply with all of these life improving regulations and whether such regulations can help the prostitutes to be released from this profession and start a new life?

What would be even worse if then the government must spend additional resources for two actions once prostitution has been legalized: (i) supervising the industry; and (ii) chasing the industry players who refuse to play with the rule.

I disagree with the notion that the government will be the middle men in my solution. The payment to be made by the pimps and customers do not and should not reflect a portion of their economic benefits. Instead, it should cover the whole economic benefits plus any punitive damages, the amount of which will be used to finance the enforcement and to give capital to prostitutes to start a new life. Essentially, it is to increase the costs of prostitution to a level where it is no longer a profitable business and therefore, no one wants to do it anymore.

My impression, the job of prostitution itself is degrading. Every effort should be made to prevent and save girls from being trapped in the industry instead of giving them better life but still in the same industry.

Of course this will be a policy debate in which cost benefit analysis should be further used. Nevertheless, your points are taken for the formulation of better policy. Thanks again.

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