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Trade-offs
If Governor Spitzer wanted to have sex with a younger woman then instead of hiring a prostitute he could have gotten a divorce and remarried, just like so many other rich and powerful men. Or he could have had an affair. Of these options hiring a prostitute is the least threatening to marriage but it's the only option which is illegal. In contrast, getting a divorce and remarrying a younger woman is so common it doesn't even stop a man from running for President.
Trade-offs are everywhere, whether we choose to acknowledge them or not.
In closely related news, Eric Zitzewitz says that although Spitzer may have hired a prostitute he was not himself for sale. Justin Wolfers reflects and like me thinks our moral compass is off kilter.
Posted by Alex Tabarrok on March 13, 2008 at 07:47 AM in Current Affairs | Permalink
Comments
Speaking of trade-offs, what I find so striking is the contrast between the second picture, in which she is actually attractive, and the third picture, which is more likely to earn her money: http://www.nytimes.com/2008/03/13/nyregion/12cnd-kristen.html?_r=1&oref=slogin
Posted by: Tyler Cowen at Mar 13, 2008 8:00:58 AM
Why don't we just legalize prostitution? Prostitutes would be better empowered and they would fare better. Their clients would pay less. Society would be more peaceful and STD rets may decline as a result of the legal market.
Posted by: Chairman Mao at Mar 13, 2008 8:33:09 AM
Zitzewitz's analysis is highly incomplete in calculating the costs and benefits of Spitzer's actions.
- Key missed benefit: increase in systemic integrity due to the examples he made of "market timers" and the firm's that harbored/encouraged them.
- Key missed cost: legal and human resource costs associated with selective prosecution and criminalization of business activities better regulated by civil enforcement.
To my mind the latter costs are more significant than the former benefits, but that's my bias about the benefits of predictability (or lack of arbitrariness) in the exercise of state power.
Posted by: M. Hodak at Mar 13, 2008 8:43:01 AM
Alex, your post reminds me of Dwight Lee's old article, "Marriages, Mistresses and Marginalism" which places the decision to have an extra-marital affair in the same category as the water-diamonds paradox.
Posted by: jason voorhees at Mar 13, 2008 9:00:28 AM
If the rules of the game require strong prosecutorial activity to keep people in line then it's the rules of the game that are not well written and should be questioned. Spitzer not for sale? Well maybe not to private interests, but surely he had sold his soul to the state. Is that any better?
Posted by: Unit at Mar 13, 2008 9:01:16 AM
Another missed cost: Spitzer's actions have cost him his career. (Whether they should or not is moot. No one, least of all the man himself, is claiming that he hired a prostitute as an act of civil disobedience. They have, and it was knowable ex ante that they very much could.)
Posted by: Cyrus at Mar 13, 2008 9:04:58 AM
"Of these options hiring a prostitute is the least threatening to marriage but it's the only option which is illegal."
It may be illegal in New York, but not elsewhere. For the kind of jack
Spitzer was spending it would have been easily affordable to transport
himself to a location where prostitution is legal. Was it indicative of
his arrogance that he did not avail himself of the opportunity to
have sex with prostitute in places where it is not prohibited? Spitzer,
we must not forget, is the guy who threw his weight around: "I'm a
f---ing steamroller . . . etc." Again, he could have cheated on his wife
with a prostitute legally, just not in New York; but why should the self
acclaimed "steamroller" have to? No it was not that the intersection of
his budget set and the legal constraints of New York conspired to make
Spitzer an unwitting victim of an unlibertine system. In spite of his
clear ability to purchase sex legally elsewhere HE CHOSE to
abrigate HIS SWORN OATH to uphold NY laws (not to mention the violation
of whatever wedding vows HE SWORE TO be true to).
And while I'm steamrolling, why is it that minimizing the "threat to
marriage" is important in the wake of infidelity (whether with a
prostitute, legal or illegal, or a partner who does it without monetary
compensation)? Marriage is a contract that people agree to voluntarily.
Whatever the legal status of prostitution, if vows of fidelity are made
then the violation of the vows are, by definition, a violation of
contract. The classical liberal position is not, I do not think, that
people are freer when contracts are more often clandestinely violated.
I don't think there would be anything to celebrate if Spitzer had cheated
his wife with a "younger women" in any case, even a legal bordello.
Posted by: indiana jim at Mar 13, 2008 9:49:29 AM
It wasn't just prostitution. His financial manipulations tripped the alarms of the anti-money laundering sysem. You need the whole story to sum up the costs and benefits.
Posted by: jorod at Mar 13, 2008 9:52:38 AM
How about the obvious? Both hiring a prostitute and having an affair mean the guy was cheating on his wife. If he does this to his wife, supposedly one of the people he loves most, why should the public at large have any trust in him?
With an affair there is still the chance that he really loves this other woman. By hiring a prostitute, he makes very clear that his personal pleasure is the only factor, and apparently more important than the people close to him. It means he's a dick.
Posted by: greatzamfir at Mar 13, 2008 9:57:49 AM
All good points Alex. Doesn't negate the fact he made a career out of prosecuting crimes, including a number of prostitution rings. Our moral compasses might be off kilter, but he made a career profiting from it.
Posted by: Mark at Mar 13, 2008 10:22:26 AM
Mr Spitzer's crime wasn't really engaging the services of prostitute. After all soliciting is considered such an insignificant crime that in some places it isn't even illegal. Mr Spitzer's real crime was hypocrisy.
There are very significant political benefits to be derived from projecting an upstanding, righteous image. Of course, as Mr Spitzer has discovered, there are very significant political downsides if the image diverges from the man.
Interestingly, a law abiding persona is not necessary for success in politics. Dana Rohrabacher (Rep, CA) has been re-elected nine times despite quotes like, "I did everything but drink the bong water". Of course, this might not have been so popular if he had been standing for attorney general.
Posted by: Deepish Thinker at Mar 13, 2008 10:40:44 AM
"If he does this to his wife, supposedly one of the people he loves most, why should the public at large have any trust in him?"
So, since John McCain admitted to repeatedly cheating on his first wife and mother of his children, should the public have no trust in him? Or, as the article implies, do we have different standards for different types of adultery (and/or different politicians)?
Posted by: A student of economics at Mar 13, 2008 10:47:35 AM
Finally. Something on which I can agree with Alex. What an oddly prurient country we live in.
Posted by: martin at Mar 13, 2008 10:52:41 AM
Concur with the above who say the real problem is his hypocrisy. In my ideal more-libertarian world, prostitution would be legal, and who sleeps with who under whatever consensual conditions is their own business. But I can still respect someone who cracks down on prostitution in the honest conviction that it is damaging to society and no one should ever do it. However, once that same person is exposed as wanting to hire prostitutes for himself, his integrity is shot.
Posted by: Kat at Mar 13, 2008 11:35:54 AM
"Men such as those in Spitzer's position do not so much pay for women to have sex with them; they pay for women to go away AFTER having sex with them," said evolutionary psychologist David Buss
An affair has a different kind of maintenance cost and logistics than going to a prostitute, although as frequently as Spitzer went to the escort service, and the paper trail of his escapades grew, perhaps there was a point in time when he should have switched to a mistress.
Posted by: bronxilla at Mar 13, 2008 11:44:04 AM
Or is it possible that sexual behaviors do not follow a strict rationalistic cost-benefit analysis?
Posted by: Slugger at Mar 13, 2008 12:37:08 PM
Regarding Wolfers' analysis, it's interesting to speculate what Spitzer may have been selling.
For instance, Spitzer prosecuted some other prostitution rings at the same time he was patronizing the Emperor's Club - one would assume this gave the Emperor's Club more market share and allowed for higher pricing for customers and lower payments to its employees. It's interesting to speculate what, if anything, may have caused Spitzer to focus on those other prostitution rings while leaving the Emperor's Club to service its constituency.
Posted by: CJS at Mar 13, 2008 1:23:18 PM
One reason prostitution (and soliciting) remain unlawful is the influence of female voters who are or wish to become wives and regard prostitutes as competitors for males' time and resources. Prostitution is not an appealing career for most women-- they would rather be wives.
Wives and prostitutes are partial substitutes. Wives sell large amounts of time at low hourly rates and provide sexual favors of steadily declining value. Wives demand payment in time and attention, not just cash.
Prostitutes sell small amounts of time at high rates and provide sexual favors of high value due to novelty. Prostitutes accept cash compensation, allowing men to spend time on activities they value more than squiring women around or listening to them prattle.
Since married women have a residual claim on their husbands' assets, wives don't want husbands spending any money on prostitutes. Unmarried women who wish to become wives need to entice suitors by offering sexual favors, but since such women wish to trade sexual availability for "commitment," they would rather not compete with prostitutes who will trade sexual favors for mere cash.
Laws forbidding prostitution just represent rent-seeking by other women. Such laws are like those which forbid people to braid hair without a "cosmetologist's license" that requires 1,600 hours of "training" in things like eyebrow plucking. Wives and would-be wives don't want prostitutes selling unbundled sex.
Two kinds of societies legalize, or at least tolerate, prostitution: those in which women have little political power, and those which adopt socialist/feminist institutions that substitute State support for husbands.
Posted by: Vorpal Blade at Mar 13, 2008 2:04:01 PM
The biggest meltdown in history is happening after "The Sheriff cleaned up the town." Thank God he was taken down before he could capture the Presidency.
Posted by: anon at Mar 13, 2008 2:04:19 PM
Vorpal Blade wins the "most obnoxious and cynical" award for loveless and misogynistic use of economic reasoning. Hopefully it was a joke.
Posted by: liberty at Mar 13, 2008 2:58:37 PM
This is a joke, from another message board:
But I’m not sure you people appreciate the various forms and nuances of “The Spitzer.” You’ve got the “Flying Spitzer,” which, I’m told, can be quite exhilarating. There’s the “Spitzer Blitzer,” but at least one of the participants must have a beard for that........hopefully the male participant. Then there’s the “Rusty Spitzer.” Kinky. There’s the “Half-Spitzer,” which is better than nothing if you’re on a budget I guess, but most people find it quite unsatisfying. There is, of course, the classic “Full Spitzer,” which is referred-to pretty much universally simply as “The Spitzer.” You don’t mess with a classic. There’s the “Spitzer-and-a-Half,” which some think is not really worth the extra money, and then there is the rarely observed “Double Spitzer,” which everybody should probably experience at least once in their lifetimes, just so they can say they have. There are, of course, stories of a “Triple Spitzer,” and many experts consider it to be nothing more than urban legend, although one Ms. Rose Pilgerfahrt of Mundelein, Illinois, claims to have performed it on two occasions with some unspecified Baldwin brothers, whilst vacationing in Los Angeles.
Posted by: bronxilla at Mar 13, 2008 3:07:01 PM
Notwithstanding my previous comments, I have to disagree with "liberty" that Vorpal Blade's post is nothing more than a cynical joke. Vorpal's detached scientific approach, complete with testable predictions, is certainly more than cynical (and/or misogynistic if you like) goofing.
Posted by: indiana jim at Mar 13, 2008 3:14:53 PM
indiana jim,
detached scientific approach? If that is what science is these days, we have some serious problems.
You have what I see as absurd assumptions:
1. "Wives sell large amounts of time at low hourly rates and provide sexual favors of steadily declining value."
Underlying assumptions: (a) Net income flows from man to woman
(b) net sexual favors flow in the opposite direction, (c) sexual favors decrease in value over time, (d) sexual favors are given not for intrinsic value to both parties but in exchange for the monetary value of the income flow
2. "Wives demand payment in time and attention, not just cash."
Underlying assumptions: man doesn't enjoy giving time and attention to woman, or enjoy the value of the attention given him, but does it in exchange for sexual gratification or other contractually based exchange value.
There are probably more. Now, some marriages may look like this, but I feel horribly sorry for both parties involved, if they do. Despite stereotypes, some couples actually are in love and enjoy each others company; women like sex; women sometimes contribute more financially to the marriage; etc. The assumptions are sad and bigoted, and it is a lonely man who wrote it. (Or at least someone playing one).
Posted by: liberty at Mar 13, 2008 3:37:43 PM
"Since married women have a residual claim on their husbands' assets, wives don't want husbands spending any money on prostitutes."
Ah, that's why wives don't want their husbands to visit prostitutes.
Someone's read too much economics, and interpreted it too narrowly.
Posted by: LemmusLemmus at Mar 13, 2008 3:49:15 PM
liberty,
There are testable implications; if the implications don't hold up, THEN we reject the refuted hypotheses. This has always been the scientific approach, to my knowledge.
As Armen Alchain discussed, it may be that successful businesspersons behave "as if" they were attempting to maximize profit, regardless of whatever statements they might make suggesting otherwise. The "as if" is the thing that lots of people seem to miss in hypotheses like this.
Posted by: indiana jim at Mar 13, 2008 3:57:55 PM
indiana jim,
1. Economics is not physics. You can look to human nature for some initial axioms of behavior.
2. If your assumptions suck, your outcomes won't be correct.
3. Hopefully nobody behaves "as if" that stuff is true. If they do, I feel very sorry for them.
Posted by: liberty at Mar 13, 2008 4:01:15 PM
liberty,
Scientific testing is scientific testing. By definition economics is not physics, so saying "economics is not physics" says nothing relevant to my point. Nice try at misdirection though!
Posted by: indiana jim at Mar 13, 2008 4:07:21 PM
Indeed "Scientific testing is scientific testing," but that kind of scientific testing is not appropriate to social science theory development. I could hypothesize any number of opposing behavioral assumptions and then fit the data to it - it will fit just as easily because there are - in reality - so many different factors affecting the results.
The proposed behavioral traits
(a) Men like hookers because they hate women: "Prostitutes accept cash compensation, allowing men to spend time on activities they value more than squiring women around or listening to them prattle."
and
(b) Women want them banned so they can keep their husband's dough: "Since married women have a residual claim on their husbands' assets, wives don't want husbands spending any money on prostitutes"
Could easily be replaced with (a) "Men are driven by Oedipal women-loving compelexes that make them want to sleep with as many women as possible, hookers are the easiest way" and (b) "wives are jealous of the cool life of the hookers, but are too ugly/scared to make cash that way, so they try to make life hard for the hookers" and the "outcome" would be the same. Maybe people just behave "as if" those assumptions are true.
Alternatively, you could replace (a) with "men don't really like hookers, but they like to talk about going to them with their buddies" and (b) with "Women don't care either way, but lawmakers are getting paid off by the pimps and mafia for keeping it illegal, and women sometimes join anti-prostitution interest groups because it makes them look good"
It could be that men don't like hookers hardly at all and if it was legal would not go any more often-- ah, but that would tell you if your assumption is true? Hardly. Maybe the social affect of going to hookers differs based on whether it is legal or not. If you assume that the behavior is not social but sexual, you'd not even think of that.
Or, I could come up with another dozen equally "plausible" behavioral reasons for any given outcome. The "scientific" method described is useless and the assumptions above are no better than the ones I offer.
Posted by: liberty at Mar 13, 2008 4:27:34 PM
"It may be illegal in New York, but not elsewhere. For the kind of jack Spitzer was spending it would have been easily affordable to transport himself to a location where prostitution is legal."
The backslash that the ex-governor has experienced is not so much because of the fact that prostitution is illegal, but that it is immoral. Spitzer has not been charged for patronizing a prostitute. Most of the negative reaction out there is emotional, and would not be any different if the ex-governor had gone out to Vegas or Holland or booked himself a sex-tour to enjoy sex-for-hire.
Posted by: janya at Mar 13, 2008 4:48:06 PM
Women want them banned so they can keep their husband's dough: "Since married women have a residual claim on their husbands' assets, wives don't want husbands spending any money on prostitutes"
I'm a woman and I don't think I want to be lumped in with other women as if we're all just interchangeable. I don't much care about my husband's assets as I create a lot of wealth in my own right. I would prefer prostitution were legal as I believe that private arrangements between adults are none of the state's business. However, if my husband were to ever risk exposing me to disease by visiting a whore, he will find himself splitting his assets and looking for a new wife. How does that fit into the model?
Anyway...
Anyone who watched Spitzer's behaviour during his time as NY's AG, couldn't possibly be surprised by this. He always believed and acted as though he were above the law. I always thought he genuinely believed he was - probably still believes it. How else can we explain his carelessness, especially since he was caught in exactly the same way he caught other prostitution rings as AG? But frequenting prostitutes over the past ten years was not his only bad trade-off. He abused the power of his office so much both as AG and as Governor that when he was at the mercy of prosecutors himself, he found none. Good riddance to bad rubbish.
Posted by: Methinks at Mar 13, 2008 4:59:58 PM
Most of the negative reaction out there is emotional..
I disagree, Janya. As a law enforcement officer, he prosecuted some prostitution rings while protecting and frequenting others. That's serious misconduct. As a holder of the public trust, he put himself in a position to be blackmailed, putting at risk his ability to act in the best interest of the state of NY. His use of the State police to spy on his political nemesis and assorted strongman tactics already drove his approval ratings into the 20's. I don't think the reaction is emotional. I think it's completely rational. The evidence shows he is not fit for public office.
Posted by: Methinks at Mar 13, 2008 5:07:30 PM
liberty,
Yes, if there is one explanation there are often many. Explanations are compared with one another and their relative merits assessed. "It takes an alternative theory to replace and existing one," etc., etc. What you seem to have been inflamed by is the rather abrasive fashion in which the assumptions were stated. I can agree with you that they need not be stated so abrasively and still be intrigued by the prediction that:
"Two kinds of societies legalize, or at least tolerate, prostitution: those in which women have little political power, and those which adopt socialist/feminist institutions that substitute State support for husbands."
Also what can sometimes distinguish between competing hypotheses was discussed by Milton Friedman (1970) in his famous "Methodology" piece, who argues that: “. . . what are called assumptions of a hypothesis can be used to get some indirect evidence on the acceptability of the hypothesis . . . in so far as the assumptions may call to mind other implications of the hypothesis susceptible to casual empirical observation.”
For example your hypothetical (cynical joke?) that "men are driven by Oedipal women-loving compelexes" is an evolutionary non-starter don't you think?
Posted by: indiana jim at Mar 13, 2008 5:16:44 PM
i posted about some of this a couple of days ago. http://prawfsblawg.blogs.com/prawfsblawg/2008/03/legalizing-pros.html#trackback
Posted by: Orly Lobel at Mar 13, 2008 6:14:44 PM
indiana jim,
I guess you mean Friedman's 1953 paper "The Methodology of Positive Economics", reprinted in a 1979 anthology called something along the lines of Philosophy and Economics.
Correct me if I'm wrong.
Posted by: LemmusLemmus at Mar 13, 2008 6:39:38 PM
So, since John McCain admitted to repeatedly cheating on his first wife and mother of his children, should the public have no trust in him? Or, as the article implies, do we have different standards for different types of adultery (and/or different politicians)?
The difference between Spitzer and McCain is that McCain did his shenanigans almost thirty years ago, admits them, and says he has grown up since then (caveat: unless this new thing with what's her face is true) (caveat to caveat: I don't think it is)
Spitzer did his stuff in the last month.
Now, a case could be made why Spitzer has to be out but Vitter does not. I think the deal with Vitter but not Spitzer hanging on is that Vitter's also happened in the past, it was well over before it was disclosed publically, and his wife already knew about it and had forgiven him. And Spitzer hyprocisy is a little more specific in that he was an AG who prosecuted prostitution vice just a generic 'family values' crusader.
Posted by: Kolohe at Mar 14, 2008 1:24:31 AM
Lemmus,
Yes 1953, I had Friedman's paper in a readings book by Breit and Hochman dated 1970. sorry for any confusion
Posted by: indiana jim at Mar 14, 2008 8:45:36 AM
I'd like to talk about music appreciation. Music fans notice a style of music that is new and different when they are about 13. Some fans spend the rest of their life listening to music in the first genre that thrills them. Other fans spend the rest of their life searching for music that is new and different from what they've heard before. In both cases they want to repeat that early transcendent joy.
Fans of musical consistency argue with fans of musical novelty and seem incapable of understanding each other.
Let's talk about sex. Postulate that Spitzer gets a transcendent feeling from novel sexual experiences. Folks like me who enjoy repeating the same experiences with the same woman have difficulty understanding this. My colleagues have suggested that Spitzer should have 1) stayed a bachelor 2) had free affairs 3) used cheaper services.
1) Seems immoral. Spitzer should have deprived his parents of grandchildren? Deprived his wife of the chance to bask in his magnetic steamroller glow? Deprived his children of life itself?
2) Seems immoral. He's at the top of the Albany pyramid. Everyone he meets works for him or is a lobbyist. It's an abuse of power unless he cheats with an equal (a set effectively limited to Hillary Clinton). To Spitzer that kind of power abuse is immoral.
3) Seems reasonable... but imagine yourself as the lady. I'm a rational economic actor. $4000 for sex is a rational exchange. I wouldn't sell myself for $100 unless I was desperate or addicted. It would have been easy for Spitzer to fool himself that by paying a lot he was ensuring a competent, rational economic transaction. Also, a $4000 lady wouldn't jeopardize her position in the underworld by selling out to the tabloids, avoiding the hazard of NY losing a crime fighting governor.
Posted by: Ed at Mar 14, 2008 10:30:01 AM
As J. Walters is saying, shouldn´t we be worried with what politicians sell instead of what they buy? Why buying prostitution services or consuming drugs must end a politician´s career, that is, provided this behaviour does not affect the politicians performance? Somehow, we link in our minds two unrelated concepts, 'virtue' and 'public efficiency', the former having at least a problematic definition in a plural society. But then, each particular society has its own 'mix' regarding this kind of behavior. Anglo-Saxon political cultures do not tolerate much cheating or sexual affairs to their politicians, whereas in continental Europe that is not a big deal -see the Sarkozy-Bruni affair-. In Slavic and Asiatic patriarchal political cultures, on the contrary, displaying an image of great sexual prowess may gain you quite a few votes. It is high time we judge politicians by their capabilities and not by their sexual or other private practices (that is, provided they do not commit any crimes).
Posted by: Paco Beltran at Mar 14, 2008 1:52:04 PM
In the same planet and at the same time ....
http://www.reuters.com/article/bondsNews/idUSN1216491420080313
http://www.roozonline.com/english/archives/2008/03/police_chief_exposed_in_a_sex.html
Posted by: Baba at Mar 14, 2008 3:10:49 PM
