Keywords: Regulation & Taxation;
As with many service industries, there is not a lot written on the economics of prostitution. Yet the activity has a peculiarity well worth reflecting upon in a column precipitated by the official committee inquiring into its relation to Aids.
To simplify, although it is legal to offer money for sex, it is illegal to offer sex for money. I know of no other example of this asymmetry in a market.
Suppose the law applied to refrigerators. Those who wanted fridges could wander the streets seeking potential suppliers, offering money. But woe betide Fisher & Paykel et al if ,they were to advertise or display their wares. Probably, they would set up shops supplying, say, electric stoves, with cubby holes at the back where one would retreat to when – perhaps after a little prompting from the salesperson – you indicated you wanted to preserve your food as well as cook it.
There are some who would be enthusiastic about banning the advertising and display of fridges, and almost every thing else. They take the view that marketing is wasteful, and that we can reduce costs by abandoning it. I have some sympathy with this perception, but it is also true that, when I want a refrigerator, the promotion assists me in choosing the one closest to my needs, and it keeps suppliers on their toes. Without that promotional effort I would almost certainly end up with an inferior product, wasting part of the money outlaid.
But where to draw the line between useful and useless marketing? My impression is that intelligent consumerism has reduced the amount of socially useless advertising. There are also some restrictions on advertising, including truth and information requirements, and to protect less informed consumers – especially children (eg with liquor and tobacco advertising). But, except in extreme cases, it has not been possible to legislate against wasteful promotion without affecting useful marketing.
You might say that an honest man should be able to walk down a street without being hassled by the sex worker’s sales promotion. I would be more responsive to that argument if an honest woman could walk down the street without being hassled by wolf whistles and worse. At least the man is being offered a deal. (Incidentally, I was surprised at the police survey which asked whether we objected to being approached by overtly gay policemen. What about being approached by overtly macho heterosexual cops?)
I guess this would all be a matter of some lightheartedness if, in reality, the asymmetry between client and service provider did not matter. As it happens the vast majority of fridge purchasers are decent people. But suppose a minority had a thing about the salesperson, and in the back room were likely to beat up the provider, or even murder them.
This was well illustrated in Melbourne, where prostitution is decriminalised. (The Victorian government’s 1985 Neave Report on Prostitution is well worth the read although it is interesting rather than salacious.) Until 1987 the lowest level of sex workers – street-walkers – were still subject to violence from their customers. Then the police decided that they had a responsibility to protect the women involved. That option is more difficult under our law, which labels sex workers as criminals and their customers as victims.
It is the asymmetry in the transaction I find offensive. Men – for they form the bulk of parliamentarians and judiciary – have made and enforce laws which increase their power relative to the women involved, for the man in the transaction is not nearly as vulnerable to the law as the woman (although, in making this point, I recognise that there is also homosexual prostitution). It not only symbolises the asymmetry of power we find in society, but it represents a blatant hypocrisy.
It is a hypocrisy far worse than we will experience, say, with the debate on the Health and Disability Services Bill. The bill that has been returned to Parliament no longer has a reference to profitability as a goal of health providers. But its provisions still include that the providers be run as successful businesses. The fact is that successful businesses make profits.
The likelihood is that straight after the 1993 election a profitability requirement will be imposed on our public hospitals, blood transfusion units, et al. Yet parliamentarians will get up there and deny that the bill has anything to do with profit; then they will troop through the lobbies to institutionalise profit-making (sorry, I mean successful business practices) in the health system. It is this sort of hypocrisy that has given Parliament such a bad name, and why so many people rose in wrath to support MMP.
At least the Opposition will oppose the business provisions in the bill. The public silence on the law on prostitution is much more deceitful.
My point here is not necessarily to argue that we should decriminalise prostitution but that the law should treat both transactors on the same footing. Decriminalisation is one solution, but we could make it illegal to offer money for sex. Instead we prefer the hypocrisy of leaving one part of the population vulnerable to the predations of the other – in the name of morality.
Note (added in February 2003): The second paragraph remarks ‘I know of no other example of this asymmetry in a market.’ I have since realised that some transactions involving juveniles are legally asymmetric. It is not illegal for one to buy tobacco products, but it is illegal to sell to them; aq juvenile can purchase many products (other than food and basic sustenence) on credit, but the supplier cannot enforce the repayment. It is not obvious, however, that johns are juvenile.