The Economic Lessons of Prostitution

I got into a couple long conversations with some people about prostitution a while ago, and I figured I could share the results, as some are surprisingly interesting.

It all started with a dilemma: if you have sex with a prostitute and refuse to pay her, is it stealing or rape? This was quickly decided unanimously to be theft, as long as the prostitute was not forced against her will. This is also one of the many reasons why all good prostitutes demand payment up front.

But there are interesting economic matters surrounding prostitution. It’s sometimes called “the oldest profession,” but this can’t be the case. Hunting/gathering must have come first, otherwise how do you even pay for the sex? Even if you pay with an IOU, this would mean that the first profession was really investment banking.

Prostitution is an industry which sells something that people can otherwise get for free. Sex for sale is an odd concept, even ignoring the lack of logic in making something like this illegal (“buying things is legal, sex is legal, so why is buying sex illegal?”). A quick look at craigslist will explain everything.

If you live in a small town, go ahead and open up craigslist.org. If you live in a large city, you may have to find a small, local suburb to check. You found a small town craigslist yet? Yeah, I figured you wouldn’t. That’s okay, I’ll explain as we go.

In the “Casual Encounters” section, there are several categories. We are primarily interested in m4f and f4m. This means “male for female,” or “male seeking female,” and vice versa. You will notice, without fail, that there are several times more m4f postings than there are f4m. In economics, this is called disequilibrium.

So in short, men pay women for sex largely because there are more men seeking a purely sexual encounter than there are women seeking such. This is basically common sense.

And yet, economics tells us that this shouldn’t be. In a rational market, the consumers would seek alternatives. At this point, you could (if you have it open) check out the m4m and f4f section. And it turns out economics is partially right, in this situation: there are, again, several more male listings than female.

But the products are not simply, “male/female.” Instead, every single one of us is our own sexual brand. If you look at the individual postings, you’ll see that most people aren’t saying, “Looking for a man/woman, the end.” Some people want someone who is tall, others want someone who is a specific race, and still others have particular fetishes they want the other person to be into.

Prostitution simplifies a lot of this. Now, if you live in a big city, go ahead and open up your local craigslist. If you live in Bumblefuck, open the craigslist for New York City or Chicago or Philadelphia or something similar.

Now we’re talking. The f4m section in most of these places is filled to the brim. Why? Because they’re prostitutes!

Where there is a market for horny men, there will be prostitutes. Making prostitution illegal doesn’t really do much to stop it. If you’re a female (and let’s be honest… if you’re reading this, you probably aren’t), the best way to prevent prostitution (assuming you care to) is to fuck people for free. And go Dutch on the check, will ya?

This is all well and good, but at this point you’re probably wondering, “What does most of this have to do with economics?” It doesn’t really, but this next part is acutely related to capitalism.

Pimps: what are they, and why do they exist? That was almost the title of this post, but I just didn’t have that much to say about it. The primary thing is this: pimps are the essence of capitalism.

A pimp does very little real work, but if you ask a pimp, he’ll tell you he works harder than all his bitches combined. This would explain why he feels he deserves the overwhelming majority of the money earned, I suppose. This is essentially a microcosm of capitalism.

The owner of a company doesn’t roll up his sleeves and do the real labor. The owner doesn’t take real risks, only monetary ones. While hookers risk their lives doing the real work on the ground, the pimp just collects the earnings. Sure, sometimes someone won’t pay, and the pimp has the lay the smack down on the ho (because she should have collected first), or he may go and collect from the john personally. But is this really worth the premium he earns?

So why do women even have pimps? Why do pimps even exist? In a logical world, they shouldn’t. Women should be able to be their own bosses, especially in an industry where they are the product. And yet… most are not. Why?

The answer is simple: division of labor. Pimps do provide the services of protection and advice. They can direct girls to the best corner, or send guys right to them. Pimps often also have the drug hook-up, which is why some of these women are hooking in the first place. But most importantly, they provide something intangible, something you can’t understand through logic.

What is this magical something? Well, it’s all right there in the language. What do many whores call their pimp? “Daddy.”

You just can’t avoid it: most people can’t function as their own boss. Bosses are a necessity in this world, whether we like it or not. What isn’t a necessity, however, is how bosses of the world treat their workers, how much more money they make, or how few people ever question those at the top.