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Why isn't legalized prostitution more popular?
Some of this was new to me:
An in-depth look at the legal brothel regime reveals that while the system is preferable, it is stunted by unequal bargaining power between the prostitutes and brothel owners owing to collusive arrangements with local sheriffs. But since a regulated brothel system, with all its faults, provides a safer environment for prostitutes and their customers than prohibition while maintaining a sufficient barrier between the prostitution activity and the community to ameliorate citizen complaints, I ask why this system is not in use in other jurisdictions, specifically Las Vegas, Nevada. Using public-choice analysis, the paper concludes that lower employment costs for casino and hotel owners due to kick backs received by hotel employees from prostitutes and their customers, the interests of rural governments to maximize revenues from tourism generated by brothels, and the interest of Las Vegas legislators to portray the town as family-friendly maintains the status quo of illegality.
Here is much more, hat tip to www.bookforum.com. The author is Ashlie Warnick, to whom I once taught macroeconomics.
Addendum: Here's something else on the same general topic, call it a new installment in Markets for Everything, hat tip to Freakonomics blog.
Posted by Tyler Cowen on January 12, 2008 at 09:44 AM in Law | Permalink
Comments
This study illustrates the problem with the American tendency to not look outside the US - there's effectively a sample of one (Nevada - not the most typical place) for examining legal prostitution. So can any general conclusions can be drawn? Probably not.
Perhaps the author needs to look at other jurisdictions with legalised prostitution e.g. several states in Australia.
Posted by: Dan Hill at Jan 12, 2008 12:45:25 PM
I love the economist way of thinking- a big part of why I read this blog- but it strikes me as extremely obtuse that someone would look at this question without factoring in religion. I am no expert on the population of Las Vegas, but I do know that there is a very large Mormon population in the city, owing to the fact that Mormons helped settle the area in the 19th century.
Posted by: Jim Clay at Jan 12, 2008 1:17:38 PM
Prostitution is legal in some form or another in every Western country I can think of, including the UK, Canada, Australia, Belgium, Holland, etc. Americans have a tendency of thinking however things were, that's how they're supposed to be, and since prostitution has always been illegal, it always should be.
Posted by: tim at Jan 12, 2008 1:49:33 PM
How do you legalize prostitution when many of the prostitutes do not have legal residential status,most of them are either lured into prostitution or are forced into it because of drug addiction? This is true not only in western countries like USA,Canada,UK but also in developing countries like India and China
Posted by: anonymous at Jan 12, 2008 2:41:32 PM
Anonymous, lot's of people are "lured" into risky, unpleasant professions by good pay: police officers, sewage plant workers, farmers. I fail to see how you would make prostitutes better off by adding the risk of jail time to the other unpleasantries they face.
In fact, anti-prostitution laws hurt prostitutes in a variety of ways. It's harder for prostitutes to maintain stable locations (thereby pushing them onto the streets), they can't turn to the police for protection, and in fact, the police themselves frequently extract "protection sex" from prostitutes. See this reason article for more:
http://www.reason.com/blog/show/124358.html
Posted by: Christopher Rasch at Jan 12, 2008 6:28:55 PM
Isn't the "big-sister" an amazing economic model? I think its a unique arbitrage opportunity that was waiting to be exploited by some smart enterprenour! Reminds me of the captcha-busting spammers who used porn sites. Very similar models.
Posted by: anon at Jan 12, 2008 6:30:15 PM
"Prostitution" is legal in America as long as you video tape it, then it is called porn.
Maybe how prostitution is handled in Singapore, Hong Kong, and Taiwan might be instructive.
http://pmsol3.wordpress.com/2008
/01/02/chinas-growing-sex-industry/
Since it is obvious that no state that was not totalitarian has managed to stop prostitution (Mao in China came pretty close although during the Cultural Revolution young girls traded sexual favors with party officials regularly) we should regulate it by license dependent on monthly disease testing; proper safety standards at sex houses; no street walking; tax it; etc.
This way prostitutes can protect themselves from pimps and gangs/mafia by going to the police, whereas in an underground economy they have no protection from economic predators.
Posted by: Dragon Horse at Jan 12, 2008 8:30:15 PM
Why isn't legalized prostitution more popular?
Tyler, are you trying to tell your family something?
Posted by: happyjuggler0 at Jan 12, 2008 10:13:45 PM
Since it is obvious that no state that was not totalitarian has managed to stop prostitution (Mao in China came pretty close although during the Cultural Revolution young girls traded sexual favors with party officials regularly) we should regulate it by license dependent on monthly disease testing; proper safety standards at sex houses; no street walking; tax it; etc.
It is equally obvious that no state, totalitarian or otherwise, has managed to stop murder. Does that mean we should license it?
Posted by: Bernard Yomtov at Jan 13, 2008 12:41:37 AM
So what exactly are the argument against prostitution? If I can sell my labor to the highest bidder why not a particular kind of labor?/
Posted by: Raul at Jan 13, 2008 4:30:27 AM
From a broader social context, I'd be very surprised if there weren't some element of social signaling involved. If one is in favor of legalizing prostitution, one is seen as being "for" prostitution. This would seem to signal sexual undesirability ("not that *I* would ever need to pay for sex...")
Posted by: Anthony Damiani at Jan 13, 2008 10:39:43 AM
Bernard,
Your point is valid, but significantly undermined by your apparent equation prostitution to murder, which I doubt you believe.
Posted by: M. Hodak at Jan 13, 2008 11:12:46 AM
Bernard Yomtov,
To equate prostitution with murder shows you haven't spent much time thinking, or trying to think, like a libertarian. For a libertarian it is completely obvious why prostitution should be legal, namely it occurs between consenting adults. You can't say the same about murder, with murder someone's liberty is being violated.
Quite frankly it is no one else's business what consenting adults do with each other if they don't violate anyone else's liberty.
Posted by: happyjuggler0 at Jan 13, 2008 11:35:33 AM
Legalized prostitution has been tried for the last ten years or so in Holland, more form the 'safer and healthier for the prostitutes' argument than from a 'consenting adults' side. The ideas was that prostitutes would prefer to work for legal businesses, while at least some brothel owners would prefer to be released from the trouble of illegal businesses.
From what I have heard about it, it didn't really work out as hoped. Basically, very few prositutes appear to be really 'consenting'. Many or even most are illegal immigrant from Eastern Europe or China, many others are threatened by violence if they change brothels or want to leave the business, and there is also a sizable group of desparate junkies.
So, there was very little reason for brothel owners to become legal and open their books, since they had far too much too hide, and while the legalization might have worked out for the prositutes in the relatively respectable side of the business, for the rest it remained a very nasty business.
I am not sure how much of this applies to the American situation, but I wouldn't be too surprised if the same problems, i.e. illegal immigrants without options, threatening brothel owners and drugs are just much a problem as here.
Posted by: Great Zamfir at Jan 13, 2008 12:02:52 PM
I wish to point out to both M Hodak and happyjuggler0 that I did not equate murder and prostitution. I fully understand the difference.
Rather, I was trying to show that Dragon Horse's argument is worthless, simply because it could obviously be used in the vastly different case of murder.
To review, DH says that since you can't stop it you should regulate/license/tax it. But that dodges the issue. If prostitution is sufficiently harmful socially then it should be illegal. If not, then questions of regulation arise. The argument that it should be legal just because law enforcement is imperfect makes no sense.
As to thinking like a libertarian, let me just say that, judging by most of the libertarian thinking I see on the web, I'd say it was something best avoided.
Posted by: Bernard Yomtov at Jan 13, 2008 6:10:58 PM
As for the netherlands example, are you sure that those immigrants do not come to the Netherlands, and engage in that business, because of the expected money they can make? If they know it to be a lucrative trade with low barriers to entry (very little education or prior experience needed) then we might expect many immigrants to enter the country to join that business, no?
Posted by: Kire at Jan 14, 2008 2:45:02 PM
As someone who studies casinos (and a former casino employee), I've got to disagree with the author's conclusions, at least somewhat. I don't think that "kickbacks from prostitutes and customers" significantly impact the wage structures of casino resorts. While it's hard to say without a doubt that none of the thousands of people who work in casinos profit from prostitution, I can say unequivocally that I never, ever, saw or even heard about anyone getting a kickback for referring someone to a prostitute. Furthermore, many of the employees that would be in a position to refer customers--particularly bellmen and bartenders--already work primarily for tip income, so the casino neither gains nor loses, economically, if they receive kickbacks or not. So that can't explain why casinos don't support legalization in Las Vegas (and Reno).
So why don't they? The "Baptist" half of Warnick's argument is, I think, directly on point. Legalized prostitution would be a disincentive to more potential tourists than an incentive. Therefore, the casinos oppose it. I think the more important reason(and one that Warnick mentions) is that if prostitution were legal in Las Vegas, it might divert money from the casinos.
So why wouldn't casinos support legalization then just get into the business themselves? Again, it's the "Baptist" argument (most tourists would be put off by legal prostitution), but I can think of a good reason from a strictly business viewpoint: liability. Casinos are besieged with trip-and-fall cases everyday, and that's just because people can't walk through the place without hitting a snag in the carpet or slipping on freshly-polished marble (or faux marble). I can't imagine the kinds of lawsuits that legalized casino prostitution would bring.
Posted by: Dave at Jan 14, 2008 5:16:41 PM
@ Kire: Well, there are of course many reasons, but the basic scenario is that people smugglers promise women that they can get a job in a restaurant or cleaning business, and by the time they arrive here they are told that 'temporarily' there are no other jobs, But hey, if they need the money, there is this other job as massage lady, and you are in our debt, remember?
So these women are in a foreign country, they don't speak the language, don't know the system, their passports have been taken, they probaby have been told horrible stories about the local immigration service, and when they are form Africa or Asia, their families have probably paid serious money to get them here and they feel they must repay this.
Then they take up the work and by the time they have a better view on their situation,they're used to it and keep going, sometimes under threat of violence, sometimes for the family at home, and probably some mixture. For Eastern European women the money may be an important feature, since they can get back home if they really want to. For people from farther away, the situation is a lot nastier.
As I said, I'm not sure how common this is in the US, but I would expect that at least the Asian side of it works pretty much the same way.
Posted by: greatzamfir at Jan 15, 2008 6:28:56 AM
Bernard Yomtov:
First off I'm not a libertarian and my primary argument is not "well we can't stop it so live with it".
I think sex between to consenting adult people should not be illegal in any situation. It is not the states business to dictate who I can have sex with and why. We are a little beyond sex being controlled by marriage as a way to maintain order between families. We do not live in a tribal society, the divorce rate is 50% and a lot of those people remarry.
If any adult wants to pay for sexual services I could care less. I do not consider prostitutes any better than women who go bar hopping and have one-night stands every weekend with a guy who spends a lot of money on them for dinner and drinks. The only difference to me is frequency of sexual contact.
That frequency can be problematic from the point of the sex worker becoming a disease vector. The more unprotected or even protected sex you have the more diseases you are likely to get. The solution to this is the regulation I talked about. This would make the situation safer than it currently is, from a public health perspective.
The other problem is pimping/sex slavery. These women have limited legal protection under the law so they fall prey to predators. Legalization and regulation would help with this. Would it eliminate it? No, but it would significantly change the equation for many women on the streets.
Posted by: Dragon Horse at Jan 15, 2008 6:37:22 AM
Dragon Horse, the trouble is that experience in the few countries that tried legalized prostitution is that does not significantly change the equation, or far less than people expected. I think one factor is that the legalization makes it much harder to prosecute bad pimps. Being involved in prostitution is apparently much easier to prove than than involvement in forced prostitution. For the latter ,the women have to press charges against their pimp, and if the pimp has enough influence to force them into prostitution, he can probably force them to keep quiet about it too.
Posted by: GreatZamfir at Jan 15, 2008 9:46:41 AM
"To equate prostitution with murder shows you haven't spent much time thinking, or trying to think, like a libertarian."
This is a totally bogus argument. (And I'm on the presenter's side of the question, BTW.) To *compare* two things in no way is to *equate* them! The (quite valid) point Bernard made is that the formula "The State can't stop X so the State should legalize X" doesn't work -- just fill 'murder' in for 'X'. Advocates of legalized prostitution need some other argument.
Posted by: Gene Callahan at Jan 15, 2008 12:36:54 PM
my litmus test is 'you can take this job and shove it'. if a person can walk away from bad conditions without fear of violence, imprisonment,deportation, blackmail or being left with no other option whatsoever for supporting themselves then i would say that what they do is their own business. but prostitution follows war, poverty and severe inequality. there are 'massage parlors' in my city where the women are illegal immigrants living in squalor. the city can't, or won't prosecute the owners for trafficking. i don't totally buy the argument either, that 'those people' are so destitute that this is a great opportunity, but i wish we had more testimony from the women involved.
Posted by: Nancy Green at Jan 16, 2008 6:19:26 PM
Why is it illegal to charge money to do something that it is legal to do for free?
Posted by: Mr. Terwilliger at Jan 17, 2008 8:00:34 AM
@ Great Zamfir: Trafficking women in the NL is extremely rare. One must be an EU citizen to work there. Since there is so much legit competition, there is little work for the illegals and even less work for pimps. We need data, I know, but the trafficking story is far more common in, say, Italy, where prostitution is legal under restrictive laws. This Factbook (1999) is helpful, if dated, as a source on global prostitution.
Posted by: David Zetland at Jan 19, 2008 1:11:57 PM
Mr. Terwilliger, you beat me to the punch.
To anyone who doesn't know,"Why is it illegal to charge money to do something that it is legal to do for free?" is a quote by comedian George Carlin. Penn & Teller refer to it on their prostitution episode of Penn & Teller's Bullsh*t.
I beleive that if the U.S. sets up a regulated, legalized brothel system using brothels like the one Penn & Teller visited in one of the few legalized areas of Nevada, much of the undesirable aspects of the business will fly out the window. The brothel in the show(due to it's open location)is surrounded by a perimeter fence and a gate with a "buzz in" system. Once inside, the client would be screened for STDs and then things would carry on normally until time to pay. Instead of a pimp, the client deals with a secretary who takes the payment. The money from the client then flows through the same monetary system as your $12.95 for a medium pizza at Pizza Hut and makes its way to the employee(formerly known as prostitute). The employees(just like in every business and especially for this one)are also screened regularly for drugs and STDs in interests of their safety and well being. If a psycho attempts forced entry to the brothel or other atrocities to the business or employees, they are free to call the police for assistance with no fear of being jailed themselves. Show me one illegal street hooker that has a life like that and I will show you *mythical creature here*. And since these legal establishments arise, police can focus on brothels running illegally and street prostitution, discouraging and eventually eliminating pimps.
In review, pimps who skim off the top are replaced with legitimate business, dangerous situations are replaced with a secure and safe environment, rampant STDs take a nose dive off the charts via the screenings, psychologically women employed will feel better in a safer environment and will be less likely to turn to drugs. Employees get a regular paycheck and can live focusing on the long term instead of living day-by-day.
This is how I feel about all this, we might not end up helping everyone by following this, but we darn sure aren't helping anyone by making it illegal.
Posted by: Chris Rundle at Apr 26, 2008 3:44:19 PM
