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Sex Trafficking: Insights from its Business Model?

14 December, 2010 (11:33) | Business, Community & Society, Ethics & Morality, slavery, Social Change, US Criminal Law, Work | By: Peter Kinder

Can we learn anything by looking at contemporary slavery or peonage as a business model?

In an interview in The Boston Globe, Siddharth Kara argues there is. Kara, a former investment banker has written a well-regarded book on the subject, Sex Trafficking: Inside the Business of Modern Slavery (2009).

I’m not persuaded by his argument that, at least as to sex trafficking, its business model has much to teach us. The real question is: Since it is a business, why not use the tools societies have developed to control business’s worst practices – such as child labor?

“Contemporary forms of slavery…all function on a simple economic premise: maximize profit by minimizing or eliminating the cost of labor”, says Kara. Indeed, it’s hard to imagine slavery – in any period — operating on another principle. Otherwise, why go to the trouble of acquiring a slave?

Modern sex slavery would seem to offer the ultimate example of a business externalising its long-term costs – from health care to social welfare.

Did slave owners, generally, in the American south achieve this? I don’t think so, based on my reading. The masters of the peonage/sharecropping system that followed slavery’s abolition in 1865 may have come closer.  They did not suffer the peer pressure to maintain the illusion of benevolence toward their bondsmen that antebellum owners had bourne.

From the employer’s perspective, slavery has the added benefit of suppressing the price of competing free labor.  The owners of the Tredeger Iron Works in Richmond, Virginia, evidently applied this lever to control the wages of their free workforce before the US Civil War.

This management principle appears to be at work in the sex trade.  It seems also to be having the (perhaps) unintended consequences of increasing the supply of hired sex and lowering its price. Kara told The Globe,

“Depending on which country you’re in, it takes 1.5 to 2 hours of work at that country’s per capita income to purchase 1 hour of sex from a sex slave. So you ask yourself, How many males will trade in 1.5 hours of salary to purchase sex? A huge number. If we were to revert back to where prices were a decade ago, by putting more cost and risk into the system…you [would] see a massive decrease in demand, because you’ve priced out of the market those low-wage consumers — like day laborers, taxi drivers, and tuk tuk drivers — who are now in the market.”

If Kara is right about this, and he seems plausible, then his first solution – a combination of prostitution prohibition which we’ve now got and rescue and reformation of sex slaves – isn’t.

Leave aside the fact prostitution prohibition has never worked. Apart from Britain’s great nineteenth century prime minister, William Gladstone, very few reformers have shown much enthusiasm for rescuing prostitutes, and fewer still – Gladstone included – for integrating them into society.

It is difficult to argue against rooting out gender discrimination and alleviating poverty as means toward ending sex slavery, as Kara advocates. Those are very long-term fixes – requiring cultural shifts and economic redistributions – for an immediate problem.

Kara is correct when he observes,

“…human sex trafficking is a very economically driven crime, but it’s also the aggregate of some of our most barbaric criminal offenses: rape, torture, abduction, battery, assault, administering noxious substances, homicide. The fact that the penalties for the crime of sex trafficking are largely less than the penalties against some of these individual components is mystifying.”

All of which argue for a concerted assault on sex trafficking. But that is not the same as an assault on the sex trade.

Selling sex is a business. Experience with alcohol, cigarettes, proscribed drugs, gambling and the like offers no example of successful prohibition of a vice. Americans are still dealing with the social costs of alcohol prohibition. They haven’t begun to consider the costs of drug prohibition.

Progress comes from regulation, taxation and education. Those are the elements necessary for dealing effectively with the social problems created by any type of business. The sex trade – free or slave – is no different.

We can’t attack the problem of sex trafficking when we don’t differentiate between free and slave prostitutes in our society. The first step in this process is the hardest: accepting prostitution as a business.

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