On Victimless Crime
One of my favorite legal issues is the existence of victimless crime,
usually defined as non-forceful actions whose participants are not
complaining for their participation and no direct injuries are inflicted
to non-participants of such actions.
Victimless crimes are
traditionally associated with actions performed by consenting adults
which harm the society's moral foundations but not the society directly.
These include drugs use, prostitution or non-marital sex and gambling,
to name a few.
Some economists would argue that rather than
criminalizing the above acts, it would be better to instead legalize
them. Not only that those acts can provide additional income to the
government in the form of tax, it can also minimize the costs of legal
enforcement. A good example would be the war on drugs which has caused a
significant costs in the form of money and lives.
Contrary to
the above opinion, I, on the other hand, argue that victimless crime
does not exist. If we are calculating the general welfare of the
society, the costs imposed to each member of the society, even if they
don't directly affect other members, would still matter.
There
are costs involved associated with drugs usage, health costs of the
user. There are also costs associated with prostitution, costs related
to sexually transmitted disease and possible costs to marriage
relationship because yes, marriage too is a form of investment between
the parties.
And how about gambling? It is a form of property
transfer which may easily fall into an inefficient form of resources
allocation. Why? Because the game is usually designed to ensure that the
bookie will always win.
A simple example: most gamblers' chance
of winning is very slim in many types of games, while the winning chance
of the bookie depends on the probability of the gamblers losing the
game, i.e. 1 – whatever the probability of the gambler to win. If the
gambler only has a chance of 1 percent or 0.01, the bookie will have 99
percent chance to win the game. A really easy way to gain money.
Sure,
we always have the usual argument: those adults have already given
their consent and they must take the responsibility for themselves. And
it is also true that the regulations are not always consistent.
Take
the cigarette industry as an example. The business is legal and they
pay a considerable amount of taxes to the government each year in order
to maintain the business.
So why don't we do the same for other
type of "victimless crimes"? Let us view this not from moral point of
view, but from economics point of view. Usually most people forget that
when we legalize certain acts, it does not necessarily mean that the
enforcement costs will disappear into thin air.
You still need to spend money to ensure that the "legalized" business will comply with the rules set out by the government.
As
an example. If you criminalize drugs sale, you will need to allocate
funds to enforce the law and punish the violators. If you legalize
drugs sale, you will spend funds to also supervise the business,
ensuring that these "business men" will play in accordance with the
rules on drug sale. And if they don't? You will simply penalize them
again.
How about income from tax? Well, you don’t need to
legalize an act in order to gain additional income via tax, you can
simply change the rule so that instead spending times in the prison, the
criminals are required to pay all of their profits to the government.
The effect will be similar to a tax and the government will receive
money too.
How about prostitution? Legalizing the prostitution
might reduce the costs of supervision because legalizing the business is
usually associated with its localization. This will reduce the
possibility of sexual diseases transmission and improve the protection
of the sex workers.
But it is also not without additional costs.
Localization may also increase the costs of the prostitution business.
The procurer will need to pay taxes and the building lease fee, not to
mention that there will be additional costs for moving the business
place. With increasing costs, the service fee will also increase.
Who
will guarantee that it will not create incentives for a black market
with cheaper services for consumers who don't have enough money to go to
the valid prostitution area? This will again impose another costs for
legal enforcement, i.e., eradicating the illegal prostitution outside
the legalized area.
Through these examples, I would like to show
that thinking about victimless crime is not as easy as imposing tax and
reducing legal enforcement costs. Instead, for every action, there would
be economic consequences and if we want to make a proper policy, we
need to carefully calculate the costs and benefits of such policy.
1 comments:
Capitalism (as practiced since at least 1492) is not a victimless crime.
By now we've seen and measured the fallout from the Chicago Schools's experiments. But it doesn't matter; in the end, the earth will trump us and our foolish theories.
- brimstoner
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