Tuesday, April 7, 2009

 

Vicctimless Crimes

A post at Cheap Talk discusses how making illegal activities legal would stimulate the economy.
Of course there are many illegal markets that would generate stimulus were they to be legalized. Here are some of the big ones.

   1. Drugs
   2. Guns
   3. Prostitution (except in Nevada)
   4. Gay prostitution (even in Nevada)
   5. Gambling
   6. Trade with Cuba
   7. Liberalized immigration

Al Roth calls these repugnant transactions and discusses them frequently on his blog. The demand for stimulus means that the cost of being morally opposed to these transactions increases and the margin between what is repugnant and what is not slides outward.
You’ve forgotten some even bigger repugnant markets that would stimulate the economy: burglary, extortion, and murder. In each case, people are currently employed illegally in the activity, though defense against them is mostly legal (”mostly” because pre-emptive violence is illegal). Making them legal would cause many more people to be employed in these activities, and woudl also raise employment by increasing the demand for preventive services.
 

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