Wednesday, March 12, 2008

Governor Spitzer, We Hardly Knew You

My first reaction to the news of Eliot Spitzer's demise was that I felt bad for his three daughters, for reasons discussed here. My second reaction was that I felt bad for his wife for having to stand there and face the public glare as well. I presume that she did that for her daughters if not for her husband. It is the adultery embedded in the transaction, particularly by a father of teenage daughters in the public eye, that most disturbs me.

But that's a personal judgment and a matter that may be relevant in a divorce proceeding. It doesn't necessarily have to guide public policy. What of the transaction itself, if it did not involve adultery? For a public official, the big danger is that Spitzer's desire to keep the activity secret would subject him to blackmail by those in on the secret. With the secret out in the open, there's no longer any danger in that happening, even if he hadn't resigned. Perhaps we need a disclosure policy for elected officials?

What of the transaction itself, if it did not involve adultery or a public official? Now we get to find out whether I'm a libertarian or not, I suppose. Here is a libertarian's case in defense of legalized prostitution. Here's another defense of legalized prostitution based on strengthening the legal status of women who currently engage in illegal prostitution.

What does the economist in me say? Despite the rather high price paid by Governor Spitzer ($4300 per hour), prostitution--particularly if legalized--lowers the cost to the man of obtaining more and more varied sexual activity from women. Who is made better off by this change in price?

  • Men who partake of prostitutes (buyers).
  • Women who engage voluntarily in prostitution but not other types of sex (sellers).
  • Men who do not partake of prostitutes but who face less competition in finding sexual partners from the men who are now content with prostitutes (buyers of substitutes).
Who is made worse off?
  • Women who do not engage in prostitution (sellers of substitutes)
The last one is a pecuniary externality. Though not a threat to economic efficiency, I'm not enough of a libertarian to ignore it.


Anonymous said...

This analysis reduces seller and sellers of substitutes to being providers of one service only: sex.

But the "sellers of substitute" often provide emotional support, longer term commitment, and possibility of marriage/children. You can't ask the prostitute to change the oil in the car or mow the lawn. The prostitute doesn't usually cook meals or clean the house or do your laundry either. These are things the substitute can offer, and in often they offer it in a monogamous situation that protects from sexually transmitted diseases. Thus the substitute seller is adding some nice services and protections that the prostitute does not typically provide.

These extras are the big reason I chose the "seller of substitute" instead of a male prostitute. I'm pretty sure my husband chose me over prostitutes for similar reasons.

Andrew Samwick said...

Yes, the bundling of services is what makes the long-term contractual market more interesting than the spot market for me, too, :-).

But the reduction to one service in the argument is only for ease of exposition. The services don't have to be perfect substitutes--they only have to be substitutable. Would most women supplying the substitute feel better or worse about more conspicuous or even legalized prostitution in society?

Your comment reminds me of the classic Chris Rock joke.

Anonymous said...

Well I wouldn't want it in my neighborhood. Like gambling it doesn't generate new wealth in the local economy, just redistributes some so it is a wash in that respect.

And like gambling, there are hidden costs to society (increased incidence of certain diseases, decreased lifespan of workers in that industry, increased crime, Spitzer-type domestic problems, etc.)

I've known a couple people who lost girls to the white slave trade here (they used to pull blond girls off Nicollet mall in Minneapolis and take them to the southwest to force them into prostitution -- teen girls, and one friend had a foreign student staying at her home (from Sweden, with limited English skills at the time) who was kidnapped off the mall and forced into prostitution. They did get her back from Nevada or Arizona as I recall, but not before the damage was done. What a nightmare that was. The rumor is these kidnappings have occurred from Mall of America as well . . . young beautiful girls from outstate (blonde, because we are descended primarily from Swedish and Norwegian stock here in Minnesota so there are many beautiful girls). This is the crime aspect of prostitution which is VERY ugly. Many of these women are coerced or forced into the business.

Prostitution and crime go together, kind of like gambling and organized crime, even after it was "legalized".

There's a reason why MOA has a curfew for teens.

A Red Mind in a Blue State said...

I actually wrote a paper, in Richmond, Virginia, in 1977 calling for the legalization of prostitution-- the other economic benefits being the reallocation of criminal justice resources, taxation opportunities and public health. That said, while the life might even be glamorous on some, $4300 per tryst, level, the rest of the scene is degrading to buyers and sellers alike. I think, though, on balance, legalizing it may remove some of the nastier elements of it--including violence, intimidation and lack of police protection-- and actually make the women's lives a bit better.

Alex Tabarrok said...

You have it wrong Andrew. The services of high-end prostitutes are or can be complements to marriages not substitutes. As evidence, note that 90% or more of the buyers are married. Note that these men have alternatives - namely divorce and marrying a younger woman - which many of them also do.

Anonymous said...

As you pointed out adulterous behavior on the part of wife or husband frequently result in divorce. The "other woman" or "other man" is one of the primary reasons for divorce in the US. Given this fact it is difficult to understand how the prostitute "complements" the marriage.

So exactly how does adultery with prostitutes "complement" or aid to maintaining the long term contract of the original marriage?

Anonymous said...

Yesterday's news carried an item mentioning that 25% of teen girls have an STD, mostly HPV.

I wonder what percentage of prostitutes have HPV if 25% is the stat for teen girls (younger and with more limited sexual experiences) ??

80 or 90 percent? And how does legalizing prostitution control that?

Mrs. Spitzer almost certainly has HPV. She should be tested and jack up that divorce settlement. It puts her at higher risk of cervical cancer.

Heh, heh, I say take him to the cleaners ;-)

Anonymous said...

Not sure the sex sellers are made better off. Interesting angle:

Basketball Picks said...

Keep up the great work, you are providing a great resource on the Internet here!