Monday, February 14, 2011

Paying for "IT"

There is an ongoing debate about prostitution in many countries around the world. The question is whether or not it should be legal. An interesting quirk of Canadian law is that prostitution isn’t illegal but solicitation is. You can pay for sex, but cannot talk about paying for sex and mean it.

On the legalization side there are a lot of positive arguments. Places from Amsterdam to New Zealand have legalized prostitution. There hasn’t been an explosion of drugs, violence, family break up, or any of the expected maladies that you might think would go along with legalization.

On the plus side, many places with legal regulated prostitution have less trouble with violence toward sex workers (police are now actually called), fewer sex workers addicted to drugs, and a better chance of controlling STD’s through regular health checks.

So why not just accept it legalize the open and honest exchange of sex for money? There are the usual moral objections and I can wrap my head around some of those.

But let’s put on our cynic hats for a moment. Let’s say we legalize prostitution. Who loses? In general it would mean a transfer of relationship power from people who withhold or limit sex. Think about this; you’re in a bar trying to woo someone and aren’t getting anywhere. If prostitutes are legal, safe, and not entirely shunned you aren’t going to put that much effort in at the bar. You likely won’t be buying drinks for somebody else all night, you’ll give up and go for the open exchange.

You likely won’t put up with a partner withholding sex to get what they want either – again you’ll just opt out. This means a significant reduction in power for anybody who holds out the possibility of sex as leverage. Makes you wonder about the true motives of some who object to legalization.


Anonymous said...
Have a look at these comments

Anonymous said...


Off topic from this issue but the inflation statistics in North America specifically are a scam.

I don't believe inflation statistics are based in reality....same as unemployment numbers....yes, I know how they work but perhaps these numbers to get "real" with reality.

economistatlarge said...

@ anon (mk1)
Thanks for the link - some interesting thoughts there. Nice to see I'm not entirely alone on this issue.

@ anon (mk2) I'm not sure what you're getting at. Inflation stats (as measured by the CPI) attempt to capture something pretty specific. I'm not sure what part is a scam...

Anonymous said...

The argument implies that ugly women, who stand to lose the most to the extent that they will have weaker bargaining position, should oppose legalization of prostitution.

Anonymous said...

I just don't believe that the inflation stats that are reported reflect reality.

Just what is it that you are paying for has increased in price by only 1 - 2% for the past two years? Ridiculous.

Most economists agree that they are highly suspect of the numbers even members of central back boards.

That's why called it a scam - perhaps a harsh word - although I will stand by it.

I can understand why the numbers are so low - high$ which suppresses prices because so much of our economy is imported (and exported) related and also there is practically no wage inflation (by the way I'm not saying that is good too - in fact, real wages have fallen back to early Reagan years - how is that suppose to be good.

With higher energy and food prices and other costs just skyrocketing - inflation can and will not stay low - eventually we will enter a period of high inflation and low growth. This time around it will be extremely difficult to fix things quickly.

In summary, no one is willing to take the bitter pill and take some punishment because that is what it will take to mend things. I still think interest rates should be going up but they can't, not now, unless you're willing to a risk of civil unrest here. Considering the aftermath of the financial crisis - one can't blame people for taking that bitter pill when those responsible have not suffered.

I realize prices are sticky too - it takes time but the statistics as represented by the CPI smell fishy and even the "brightest and best" in the world think that too - I don't think I'm alone in this.

I hear you sir but I beg to differ.

Anonymous said...

This is fun..good debate...and I thank you for providing this outlet.

One more point, why should we accept what's thrown at us by the CPI?

There's no reason why to accept it.

Stats Can isn't the par excellence organization as it used to be.

There's no reason why a new index to better reflect reality cannot be constructed. Why report two inflation numbers - core (non-volatile) and "regular" numbers? I know which one is taken as the primary number and the reasons for it but I still beg to differ. There is always a better/improved solution.

I will always remember a particular prof that used to say that "it depends" on the situation/case and "who cares or why/why not" - I would just like to offer the proposition that a better/improved method of reporting inflation exists and should be used.

In this day and age, information asymmetry has significantly diminished - technology has given the tools to the "average" citizen to measure their own personal inflation stat. Kind to think of it - that's pretty cool - although on a national scale it would be chaotic. I tending to think that a lot of people are roughly doing this and see the disconnect between reported numbers and their own personal experience. Albeit, I would concede that the personal experience would vary highly because not everyone purchases the same goods and service. But it makes for an interesting discussion and thought.

Anonymous said...

To the topic on hand - paying for "it".

This is one of those issues where you're damned either way.

I have my own personal objections both from a moral and externalities approach, but let us approach it from a different angle.

Some/many are doing it for various reasons...what are those reasons? and then attack them.

I tend to believe if we can solve to the best of our abilities the underlying reasons why such practice occurs, the vast majority of women would not be doing what they're "forced" to do. Also, it's not just women (although vast majority are) but men too.

This raises two issues, one of which how to deal with those who accept what they're doing and see no problems. They "enjoy" it for whatever reason - mainly $$$ though AND this also implies that perhaps (and the evidence supports it)gender inequality exists and one must seriously address it. But let us consider that there are those that don't give a damn about it (sort of a Sodom and Gomorrah lifestyle - the Biblical account of it). Secondly, what about child exploitation and etc.?

Another issue that begs to be asked is that not all jurisdictions are the same. Perhaps, arguably, we can have better social programs, laws, and other support systems to help minimize the impact of prostitution, even maybe, eliminate it. What about other jurisdictions? Tourism in this area is big business. To solve such a big societal problem as this, unfortunately, requires international cooperation. Unfortunate, because, we all know how long that takes.

This reminds me that the road to hell was always paved with good intentions. Perhaps then if society cannot and will not offer a solution to such a problem, then I would offer the proposition that such a choice to enter/leave such a "profession" be left to the individual with appropriate controls in place. The controls being regulation (medical, underage etc.) and taxation of the "profession". No point in all of society going down that path to hell, if you want to on a personal level, be my guest. There's some moral sentiment in that but as far as I remember before the Wealth of Nations, Adam Smith too approached the morality of what he was preaching in the Theory of Moral Sentiments. I feel content that moral sentiment, sympathy, and compassion are not incompatible with a capitalistic society - let me rephrase that to a JUST capitalistic society. I will leave it to others to define what is just.


economistatlarge said...

wow - these are a lot of comments.
@ anon mk3
You said it not me.

@anon mk4
Remember inflation as measured by the CPI (core and total) is only one measure of inflation out there - there's GDP deflators (based on chainweighting to real gdp), producer price indexes, whole sale price indexes, etc. As for central bank policy targeting (generally CPI measured) inflation, that's a different kettle of economists. CPI is an imperfect indicator of what's going on - no argument from me on that one.

As for interest rates, watch for the BoC to raise rates in the summer. I'm looking for two consecutive 25 basis point moves. Maybe even more in the fall.

economistatlarge said...

@ anon mk5
An interesting idea - a personalized CPI. You could almost do it through airmiles, they'd have the data or a good chunk of it. You could then aggregate the data to come up with a nation wide measure. If you wanted to get extra fancy you could start exploring changes in prices for certain groups. Income, martial status, profession, etc. Interesting, but it does beg another question, how much data about our spending do we want other to have? I'm not sure...

Your points about who is working the industry (I hate that term but that's what I hear being used)are much in line with my own thinking. I have a hard time imagining most people I know choosing that line of work unless at the edge of starvation. That may say more about the people I know, though.
On the other hand, I don't think prostitution will be eliminated until sex is such a trivial issue it's treated like a handshake, hence eliminating demand. We might be able to eliminate supply by increasing the reservation price of supplies (sorry econ talk - making supplier demand more than anyone is willing to pay), but other attempts haven't been very successful.