Gideon's Blog

In direct contravention of my wife's explicit instructions, herewith I inaugurate my first blog. Long may it prosper.

For some reason, I think I have something to say to you. You think you have something to say to me? Email me at: gideonsblogger -at- yahoo -dot- com

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Tuesday, July 30, 2002
Actually, the next stop isn't Social Security reform. It's sin industries, a philosophic, economic and legal challenge for our time.

What are sin industries? They are industries whose product results in (or risks resulting in) a net reduction of overall well-being for the society. Their business model may depend upon addictive behavior on the part of their clientele. Their product may cause the erosion of social capital and a rise in criminal behavior. Their product may be, in some sense, evil in itself, though not necessarily obviously the cause of harm in other people.

I'm not going out on a limb with the sorts of things I'm calling "sin industries." I'm not arguing that, for example, burning fossil fuels cause a net reduction in overall well-being for society by melting the polar ice caps and creating suburban cultural wastelands, nor am I arguing that fast food is giving us all type-II diabetes and arterial sclerosis. When the etiology of a social, economic or environmental problem is sufficiently complex, I think we're talking about something different. I'm talking about industries you would recognize as "sin" industries:

Other mind-altering recreational drugs

That sort of thing. The common thread among these industries is that many people would argue that there is something fundamentally dirty about them, but they don't harm anyone directly (except for the last, if you view even early-stage pregnancies as involving two rights-bearing entities). None of these are "crime industries" like assassination or extortion. A strict libertarian would probably view all of these as unproblematic: if people want these products, they can have them, and if they get hurt that's their problem. But most of us think the question is a bit more complicated than that.

Let's take tobacco. Tobacco is not like corn syrup or deep-fried clams. It's a substance whose link to serious disease has been amply demonstrated. It's highly addictive. And the economics of the industry require the acquisition of new customers at an age when they are, shall we say, unsophisticated about taking mortal risks to health. At this stage of things, it is hard to argue that anyone is uninformed about the harm tobacco does, including teenagers. And you can argue that people who smoke are making a rational trade-off between current pleasure and future pain or loss of lifespan. But we don't behave as if we believe that. When our daughters start smoking, we don't say, well, that's a reasonable and rational choice to make. We think they made a terrible choice, and try to get them to stop. That's not how we react when, say, they take up skydiving, or photojournalism.

Let's take alcohol. Alcohol is similarly highly addictive and associated with terrible health consequences. Moreover, it is a mind-altering substance under whose influence many serious crimes are committed, from murderous crimes of passion to inadvertent vehicular homicide. Alcohol has a long history with humans, is involved in many social and religious rituals, and may be beneficial in moderation. But the costs of abuse of alcohol are enormous, more so than for illegal drugs, and they are not borne exclusively or even primarily by individual addicts.

Let's take gambling. In the last decade or so, gambling has become a national addiction. Gaming companies would not survive economically were it not for gambling addicts, people who are hooked on the high of risk and throw away all their worldly possessions and then some in pursuit of it. And the most profitable form of gambling is the least-defensible in "entertainment" terms and the most addictive: slot machines. Slots gambling is properly understood as a form of narcotic, and indulgence can be viewed as a harmless vice or a serious problem or a crippling addiction depending on its severity, but is hard to view as value-neutral.

Let's take pornography. As with gambling, the last decade or so has seen an explosion of pornography, which is now widely available to all age groups and in as graphic or bizarre a form as could be desired. We don't really know what the consequences will be for the revolution in mores that the pornography explosion has inaugurated. It is not obvious that indulgence in pornography is addictive, nor is it obvious that the industry is necessarily exploitative of its employees (which would arguably make it a "crime" rather than a "sin" industry). But there are good arguments to be made that the ubiquity of pornography has real and negative consequences for relations between the sexes, and of course there is the traditional argument that it is wrong in and of itself. Prostitution is a similar case: while highly exploitative in practice, it is possible to imagine a world where prostitutes manage themselves and are free of the gravest risks to life and health that characterize the profession in America today. But it is difficult to imagine being pleased at one's sister making a good living turning tricks or at one's brother-in-law for frequenting a brothel every weekend. Clean as we can make it, it will always be an unavoidably dirty business.

I've thrown abortion on the list mostly to cause a stir, but similar arguments obtain. Let's put aside arguments about late-stage abortions and let's put aside arguments that an early-stage abortion ends a human life. Either argument is an argument that abortion is a "crime" industry not a "sin" industry, and so off-topic. Even for those who believe that early-stage abortions are not homicide, having an abortion is a sad thing, not a happy thing. The asserted right to an abortion is not like the right to speak or assemble or practice religion, positive goods, nor is it even like the right against self-incrimination or to a trial by jury, protections against governmental tyranny. It is rather a right to an escape-hatch from what are generally one's own decisions. And reducing the cost of those decisions, when they are bad, will necessarily encourage risk-taking; this is true in every other sphere of life, and I don't see why it wouldn't be true here. Abortion, then, is an industry that encourages sexual irresponsibility. This is, by the way, why the public is generally receptive to restrictions on abortion but strongly in favor of exceptions in the cases of rape or incest. The public is not "pro-life" in the sense of seeing even an early-stage fetus as a rights-bearing human. But there is nonetheless a general sense that abortion is wrong, that it shouldn't be encouraged, and that if it is too "easy" it will encourage promiscuity. In other words, the public in general - excepting the 10% or so who are strongly pro-life and the probably larger minority who view abortion as morally completely neutral - relates to abortion as a "sin" industry rather than a "crime" industry. That's why I put it on the list.

Okay, so we've got a rough-and-ready definition of sin industries and some examples of same. The problem is: what's to do about them?

This topic is usually discussed as if the alternatives were really polar: you either believe in the Tehran solution or the Amsterdam solution, and anything in-between is a futile attempt to stop the slide down the slippery slope from one to the other. But it's a bit more complicated than that. Prohibition of any sin industry will lead to a black market. We're familiar with this from arguments about drugs, alcohol and tobacco. But what about gambling? A black market in slot machines is unlikely to develop. Rather, with gambling, the issue is the economic drain from regions that prohibit slots to regions that allow them - this is a live issue, for example, in upstate New York, where Buffalo plans to build a casino downtown (by giving a chunk of downtown to an Indian tribe, making downtown Buffalo quasi-foreign territory!) in order to compete with the casinos on the Canadian side of nearby Niagara Falls. It's a tough call; with a casino so close, Ontario can reap all of the economic benefits of gambling (jobs and taxes) and export virtually all of the social costs (addiction, poverty, family breakdown). Gambling is one area where prohibition is a valid strategy but only works well if everyone in a large region plays along. Cheating causes the system to rapidly unravel - as has been the case in the United States over the past decade.

Another complication of a legalization strategy for dealing with sin industries is government entanglement with such industries. Let's take prostitution. It's well and good (and true) to say that prostitutes would be better off with a legalized, regulated industry than they are today taking their chances on the streets. However, once the government starts regulating (and taxing) the industry, it gets pretty heavily involved in its operations. If you are going to have legalized prostitution, you need official red-light districts. You need regular inspections, a government health presence on site, and so forth. Pretty soon you have a legitimate interest group. For something like prostitution, that's a non-negligible cost that is almost impossible to recoup; by going down the path of legalization, you also go down the path of legitimization and cultural change for the society as a whole. Something like this has happened with pornography already. The life of a sexual "entertainment" worker is undoubtedly much better nowadays because of the higher profile of the industry and the higher standards such a profile brings. But that same high profile has resulted in the ubiquity of pornography to the point where the national culture has changed substantially. These externalities could be avoided through a stategy of prohibition without draconian enforcement, such as usually has existed in Western countries; the cost of such a strategy is overwhelmingly born by the individuals working in the industry.

Drugs, alcohol and tobacco are more familiar territory, but even here the complications of virtually any strategy are significant. Legalization of drugs would reduce the incidence of fatal error and contamination, would bring addicts more completely into the health-care system, would dry up a source of organized crime, and would reduce a huge burden on our overtaxed police and penal system. But, it would also almost certainly increase the incidence of addiction. Back in the days before Prohibition, alcohol abuse was a much more serious problem in America than it is today. That's one of the reasons why the temperance movement had such moral and political force. While Prohibition did result in the creation of modern organized crime in America, it also significantly reduced alcohol consumption levels. Tobacco represents another interesting case. Prohibition would be circumvented by the black market, though it would be unlikely to be associated with the degree of criminality that drugs and alcohol have brought in train because tobacco is not a judgement-impairing substance. But short of prohibition, most of the strategies of control have perverse side effects. The ban on tobacco ads has the primary effect of cementing the market power of existing brands (since new ones can't advertise to gain market share). And the strategy of punitive taxation has the perverse result of making the government a tobacco addict, making it only less likely that the government will pursue intelligent strategies to reduce consumption. (There's a similar effect on gambling resultant from state lotteries: the government is in the business, so it now has a stake in the promotion of gambling and, inevitably, gambling addiction.)

Sin industries are tough problems, and increasing ones in contemporary society. They operate at the edge of rational-choice-modelable behavior. By their nature, they are designed to remove reason progressively from decisionmaking, whether because their products are addictive or because they are culturally coarsening or both. A strategy of strict prohibition raises the specter of first disorganized subversion through the black market, then organized crime, and finally the corruption of the state that is supposed to be enforcing prohibition. (This is a huge issue in Iran, for instance, where the government is heavily implicated in drug trafficking and prostitution, a major reason for the regime's loss of legitimacy in the eyes of the people.) But this kind of corruption can take place under a regime of legalization as well. Many U.S. states are now addicted to gambling revenues and tobacco money. They are now in the business of sin industries. In other cases - such as pornography - they are heavily influenced by the increased prominence and economic importance of the sin industry. In some cases, enforced prohibition may be the best strategy; in others, legalization. But in many cases, a strategy of prohibition with lax enforcement may do a better job of reducing the cultural damage from a sin industry than legalization but without the enormous costs of an actively enforced prohibition strategy.