Sex sells, or does it? A study of the markets

street-prostitution2

Tim Worstall at the Adam Smith Institute looks at the sex trade in the UK as a result of a Daily Mail article about sex workers whining about business.

Just for a moment put aside any moral or religious (or even lascivious) thoughts you might have about this sort of trade. Forget even the dubious legality of much of it (prostitution itself is legal in England, must of the activity surrounding it is not, such as brothels, soliciting, pimping and so on).

Look at what is actually happening instead. We have an absolutely textbook example of a market operating. There is a rise in supply of the service thus prices are falling. There’s a reduction in demand at the same time, so prices are falling again. The marginal provider is being described as being pushed out of business and being forced into some other trade. Just as those leaving other trades are thinking of entering this one.

My point is that if markets work as advertised in something as simple and basic as sex then why is it that we’ve vast reams of people insisting that markets simply don’t work? Why is it that all can see that markets work for those who want to get laid but not for those who desire to be educated, healed or housed?

Perhaps I should change that a little bit: for as any adult human being knows there’s actually nothing very simple about human sexuality at all. It’s a horribly complicated area of life even if it is one that endlessly fascinates our shaved ape brains. But that just strenghtens my point: if markets do indeed work as described on the tin even here then why are so many people, including naturally those in PJ O’Rourke’s Parliament of Whores, insist that markets do not work, cannot, and must be replaced with something else?

I agree that it’s not a particularly deep thought for a bank holiday morning but I do find it interesting. Supply and or demand change, prices change to compensate and bring them into balance. Why is it so difficult for people to get this?

 


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