The New Prohibitions - Drugs and Prostitution

In a fit of largely useless moralising, our governments - both State and Federal - have criminalized drug possession and use as well as the sale and consumption of commercial sex.

The efforts to stamp out illegal drugs can best be described as a total and very expensive failure while prostitution - the "oldest profession" - continues to flourish. Mostly this is because these enforcement efforts ignore the fundamentals of economics.

There is no evidence that there is anything that looks like a major imbalance between supply and demand in either of these lines of business. There is, however, a major imbalance in the enforcement efforts.

In both the drug trade and prostitution, most of the law enforcement effort is concentrated against the suppliers. While some drug users are given grossly harsh sentences for possession of relatively small amounts of drugs, these users tend to be the poorest and least influential members of the customer base.

In the sex business, prostitutes are routinely arrested for soliciting and fined (i.e. just another cost of doing business like a tax or license) but their customers, except for the occasional "name and shame" program, are largely ignored.

We have two choices. Either we can legalize these businesses so that excess profits are removed, and taxes are paid, or we can get serious about law enforcement.

Legalization appeals to libertarians but is not, in the current environment, a political possibility. Getting serious about law enforcement, therefore, is the best option. Given the profits available in both of these trades, attacking the supply side is doomed to failure: reducing supply raises prices which increases supply in an endless loop.

What then?

How about going after the customers and reducing demand? What do you think would be the effect on consumption - and the coolness of drug use - if quite a few Hollywood stars and Wall Street investment bankers got ten years for cocaine possession, rather than being sentenced to a treatment facility and six months probation? Raising the risks, and reducing the cool factor, will definitely reduce consumption.

Forty years ago, smoking was cool and every movie showed the stars with lighted cigarettes. Now smoking is dumb, and uncool, so demand is down. The same process will work for illegal drugs.

With respect to prostitution, most of the customers are already vaguely ashamed of their tastes. Let them be arrested, named, shamed, and jailed. Demand will dry up amazingly quickly.