Lifestyle Economics

The case for lifting prohibitions


The last century has seen a steady expansion of the ‘nanny state’, a process that has arguably accelerated in the last decade. A ‘banning culture’ has developed, with numerous restrictions placed on what individuals are permitted to do with their own bodies on private property.

The economic and social costs of such policies are enormous: the prohibition of recreational drugs is responsible for a high proportion of crime; the ban on trade in body parts indirectly kills tens of thousands every year and raises healthcare costs; restrictions on prostitution put women in unnecessary danger, pushing the trade onto the streets and blighting many residential areas.

Taxpayers spend vast sums enforcing bans and dealing with their effects. A Home Office report estimates the overall cost of crime in England and Wales – much of it drug related – at £60 billion per year.

Lifting prohibitions is not an issue of morality but of prudence. It is simply imprudent to ban everything we might regard as immoral. Ending current restrictions would bring banned activities into the formal sector, with reputable businesses paying taxes and investing in the quality and safety of their products and services. Drug dealers would no longer have the same incentives to supply more addictive forms; the poor who sell their body parts would have legal redress if they were exploited; and lifting the ban on handguns would undermine the profitable black markets run by criminals.

Deputy Research Director & Head of Transport

Richard Wellings was formerly Deputy Research Director at the Institute of Economic Affairs. He was educated at Oxford and the London School of Economics, completing a PhD on transport and environmental policy at the latter in 2004. He joined the Institute in 2006 as Deputy Editorial Director. Richard is the author, co-author or editor of several papers, books and reports, including Towards Better Transport (Policy Exchange, 2008), A Beginner’s Guide to Liberty (Adam Smith Institute, 2009), High Speed 2: The Next Government Project Disaster? (IEA , 2011) and Which Road Ahead - Government or Market? (IEA, 2012). He is a Senior Fellow of the Cobden Centre and the Economic Policy Centre.


15 thoughts on “The case for lifting prohibitions”

  1. Posted 11/11/2008 at 16:59 | Permalink

    The same logic applies, though perhaps to a lesser extent, to “sin taxes”. The police in Berlin spends a lot of time and resources each year to fight the so-called “Cigarette Mafia” or “Vietnamese Mafia”. These are people who sell tax- and duty-free cigarettes at a fraction of the official price. Most illegal sellers are totally harmless. But since that market is lucrative and risky, it also attracts organised crime. There was even a murderous gang war among them a couple of years ago.

  2. Posted 11/11/2008 at 16:59 | Permalink

    The same logic applies, though perhaps to a lesser extent, to “sin taxes”. The police in Berlin spends a lot of time and resources each year to fight the so-called “Cigarette Mafia” or “Vietnamese Mafia”. These are people who sell tax- and duty-free cigarettes at a fraction of the official price. Most illegal sellers are totally harmless. But since that market is lucrative and risky, it also attracts organised crime. There was even a murderous gang war among them a couple of years ago.

  3. Posted 12/11/2008 at 13:52 | Permalink

    Arguably there is a moral dimension to prohibitions: it is morally wrong for government to prevent consenting adults from choosing what to consume, choosing their sexual partners, etc.

  4. Posted 12/11/2008 at 13:52 | Permalink

    Arguably there is a moral dimension to prohibitions: it is morally wrong for government to prevent consenting adults from choosing what to consume, choosing their sexual partners, etc.

  5. Posted 12/11/2008 at 16:25 | Permalink

    John, we are the Institute of ECONOMIC Affairs rather than the Institute of Moral Affairs.

  6. Posted 12/11/2008 at 16:25 | Permalink

    John, we are the Institute of ECONOMIC Affairs rather than the Institute of Moral Affairs.

  7. Posted 13/11/2008 at 13:13 | Permalink

    I thought the IEA’s mission was to promote the institutions of a free society not an ‘efficient’ one (not that prohibitions tend to be particularly ‘efficient’).

  8. Posted 13/11/2008 at 13:13 | Permalink

    I thought the IEA’s mission was to promote the institutions of a free society not an ‘efficient’ one (not that prohibitions tend to be particularly ‘efficient’).

  9. Posted 15/11/2008 at 00:09 | Permalink

    Economics is wider than just efficiency. We are not the Institute of Efficient Affairs either. We are supposed to promote the institutions of a free society by promoting markets. But it would be possible for somebody to believe that markets where appropriate in a given field even if that led to a greater immorality. It is also possible, of course, to believe in markets in all fields because markets are the only moral way of allocating resources but this would take us beyond economic arguments.

  10. Posted 15/11/2008 at 00:09 | Permalink

    Economics is wider than just efficiency. We are not the Institute of Efficient Affairs either. We are supposed to promote the institutions of a free society by promoting markets. But it would be possible for somebody to believe that markets where appropriate in a given field even if that led to a greater immorality. It is also possible, of course, to believe in markets in all fields because markets are the only moral way of allocating resources but this would take us beyond economic arguments.

  11. Posted 16/11/2008 at 16:03 | Permalink

    If we had the option to be governed by benevolent extraterrestrians with perfect knowledge, a million times more intelligent than we are, devoid of weaknesses of character, not interested in power – I guess then we could get areas where “utilitarian” and “moral” arguments clash.
    As long as these beings haven’t arrived yet, a solid economic analysis of the costs of interventionism is a worthy undertaking.
    That does not undermine the moral case against force, it’s more like a division of labour.

  12. Posted 16/11/2008 at 16:03 | Permalink

    If we had the option to be governed by benevolent extraterrestrians with perfect knowledge, a million times more intelligent than we are, devoid of weaknesses of character, not interested in power – I guess then we could get areas where “utilitarian” and “moral” arguments clash.
    As long as these beings haven’t arrived yet, a solid economic analysis of the costs of interventionism is a worthy undertaking.
    That does not undermine the moral case against force, it’s more like a division of labour.

  13. Posted 22/11/2008 at 14:00 | Permalink

    1. Personal freedom is limited by the freedom of the others.
    2. Without restrictions of these kind there would be no society, civil one. Also, prostitution ban quite differs from the prohibition of recreational drugs, so some really are having no exception, some need to have long way of tests, discussions etc. before they will be permitted. E.g., drug companies get license after 6-8 years of multimillion dollar clinic tests. Of course, it is only my opinion.

  14. Posted 22/11/2008 at 14:00 | Permalink

    1. Personal freedom is limited by the freedom of the others.
    2. Without restrictions of these kind there would be no society, civil one. Also, prostitution ban quite differs from the prohibition of recreational drugs, so some really are having no exception, some need to have long way of tests, discussions etc. before they will be permitted. E.g., drug companies get license after 6-8 years of multimillion dollar clinic tests. Of course, it is only my opinion.

  15. Posted 29/11/2011 at 21:09 | Permalink

    We (rightly) accept the right of consenting adults to indulge their sexual preferences (gay, straight or bisexual) without state or societal intervention. However once money is introduced into the equation the government suddenly gets on it’s moral high horse and attempts to curtail the liberty of freely consenting adults to buy and sell sex. In my view the payment of money for sexual services is far from ideal, however provided that such transactions take place between consenting adults they should be permitted. The police have far better things to do with their time than arresting adults for buying and selling sex (E.G. catching muggers etc)! Resources should be concentrated on helping the minority of women (and men) who have been forced into the sex industry rather than on persecuting the majority who freely chose to buy and sell sex.

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