Monday, April 7, 2014

Draft 3.5(a), Composite

Draft 3.5(a) of Regulating Vice


2. Why Regulate Vice?

3. Surveying the Range of Controls
          First half
          Second half

4. One Guiding Principle for Vice Regulation

5. Robustly Regulating Casino Gambling

6. Changing Times

7. Vice 3.0


Draft 3.5(a), References


Becker, Gary and Kevin Murphy, “A Theory of Rational Addiction.” Journal of Political Economy 96: 675-700, 1988.

Bentham, Jeremy, An Introduction to the Principles of Morals and Legislation. New York: Hafner Press, 1948 [1823].

Bogart, W. A., Permit But Discourage: Regulating Excessive Consumption. New York: Oxford University Press, 2011.

Cook, Philip J., and Michael J. Moore, “The Economics of Alcohol Abuse and Alcohol-Control Policies.” Health Affairs 21(2): 120-133, 2002.

Carpenter, Christopher, and Carlos Dobkin, “The Minimum Legal Drinking Age and Public Health.” Journal of Economic Perspectives 25(2): 133-156, 2011.

Crime in the United States 2012, Federal Bureau of Investigation; available at

Cunningham, Scott, and Todd D. Kendall, “Prostitution 3.0: A Comment.” Iowa Law Review Bulletin 98: 131-141, 2013.

Cunningham, Scott, and Todd D. Kendall, “Prostitution 2.0: The Changing Face of Sex Work.” Journal of Urban Economics 69(3): 273-287, May 2011.

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Fong, Timothy W., Michael D. Campos, Mary-Lynn Brecht, et al., “Problem and Pathological Gambling in a Sample of Casino Patrons.” Journal of Gambling Studies 27(1): 35-47, March 2011.

Gruber, Jonathan, “The Economics of Tobacco Regulation.” Health Affairs 21(2): 146-162, 2002.

Gruber, Jonathan, and Botond Köszegi, “Is Addiction ‘Rational’? Theory and Evidence.” Quarterly Journal of Economics 116(4): 1261-1303, November 2001.

Holford, T. R., R. Meza, K. E. Warner, et al., “Tobacco Control and the Reduction in Smoking-Related Premature Deaths in the United States, 1964-2012.” Journal of the American Medical Association 311(2): 164-171, 2014.

Kilmer, Beau, and Keith Humphreys, “Losing Your ‘License to Drink’: The Radical South Dakota Approach to Heavy Drinkers Who Threaten Public Safety.” The Brown Journal of World Affairs 20(1): 267-279, Fall/Winter 2013.

Leitzel, Jim, “Toward Drug Control: Exclusion and Buyer Licensing.” Criminal Law and Philosophy 7(1): 99-119, 2013.

Leitzel, Jim, “On Self-exclusion.” Milken Institute Review, 76-81, First Quarter, 2008. Leitzel, Jim, Regulating Vice. New York: Cambridge University Press, 2008.

Leitzel, Jim, “Secret Deviants.” Carceral Notebooks 2: 121-125, 2006.

MacAndrew, Craig, and Robert B. Edgerton, Drunken Comportment: A Social Explanation. London: Thomas Nelson and Sons, 1969.

MacCoun, Robert J., and Peter Reuter, Drug War Heresies: Learning from Other Vices, Times, and Places. Cambridge: Cambridge University Press, 2001.

Mill, John Stuart, On Liberty, edited by Elizabeth Rapaport. Indianapolis: Hackett Publishing Company, 1978 [1859].

Mill, John Stuart, Principles of Political Economy with some of their Applications to Social Philosophy. William J. Ashley, ed., 1909 [1848]. Library of Economics and Liberty; available at

Ng, M., M. K. Freeman, T. D. Fleming, et al., “Smoking Prevalence and Cigarette Consumption in 187 Countries, 1980-2012.” Journal of the American Medical Association 311(2): 183-192, 2014.

Nelson, Sarah E., Debi A. LaPlante, Allyson J. Peller, et al., “Real Limits in the Virtual World: Self-Limiting Behavior of Internet Gamblers.” Journal of Gambling Studies 24(4): 463-477, December 2008.

Nutt, David, Drugs Without the Hot Air. Cambridge: UIT Cambridge LTD, 2012.

Peppet, Scott R., “Prostitution 3.0?” Iowa Law Review 98, 2013.

Room, Robin, “Individualised control of drinkers: back to the future?” Contemporary Drug Problems 39(2):311-343, 2012.

Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, Edwin Cannan, editor. Chicago: University of Chicago Press, 1976 [1776; Cannan edition, 1904].

Spinoza, Benedict de, The Chief Works of Benedict de Spinoza, translated from the Latin, with an Introduction by R.H.M. Elwes, vol. 1 Introduction, Tractatus-Theologico-Politicus, Tractatus Politicus. Revised edition (London: George Bell and Sons, 1891 [1670]). Available from The Online Library of Liberty, at

Stutz, Howard, “Singapore casinos produce $6 billion in gaming revenue in 2013; market still trails Las Vegas Strip.” Las Vegas Review-Journal, February 21, 2014.

Thaler, Richard H., and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven & London: Yale University Press, 2008.

Thompson, William N., “Handling Corporate Social Responsibility: A Third Way.” Gaming Law Review and Economics 14(5): 355-361, 2010.

Tomkins, S., L. Saburova, N. Kiryanov, et al., “Prevalence and socio-economic distribution of hazardous patterns of alcohol drinking: study of alcohol consumption in men aged 25–54 years in Izhevsk, Russia.” Addiction 102(4): 544-553, 2007.

Weitzer, Ronald, Legalizing Prostitution: From Illicit Vice to Lawful Business. New York University Press, 2012.

WHO Framework Convention on Tobacco Control. World Health Organization, updated 2005; available at

Williams, R. J., R. A. Volberg, and R. M. G. Stevens, The Population Prevalence of Problem Gambling: Methodological Influences, Standardized Rates, Jurisdictional Differences, and Worldwide Trends. Report prepared for the Ontario Problem Gambling Research Centre and the Ontario Ministry of Health and Long Term Care, May 8, 2012 available at

Zimmerman, M., I. Chelminski, and D. Young, “Prevalence and diagnostic correlates of DSM-IV pathological gambling in psychiatric outpatients.” Journal of Gambling Studies 22: 255-262, 2006.

Zinberg, Norman E., Drug, Set, and Setting: The Basis for Controlled Intoxicant Use. New Haven: Yale University Press, 1984.

Draft 3.5(a), Section 7

7. Vice 3.0

It is a commonplace to note that the internet has changed everything, and this trope would apply to vice regulation, too. Then again, vice has changed the internet: pornography, gambling, prostitution, and prescription pharmaceuticals have been major elements of web commerce almost since the internet’s inception, and have helped to push forward internet technology, including web video quality, anonymity protections, and age verification. But the direction of influence that moves from the internet to vice is, if anything, more profound, and holds the potential to drive future policy regimes.

In the case of pornography and gambling, the internet has allowed “consumption” to take place in the privacy and comfort of one’s home, instead of in a public theatre or casino, say. This privatization of consumption represents a vast expansion in the availability of these vices. Often the existing regulatory structure pre-supposes or enforces a certain level of availability and a specific mode of consumption. Regulations aimed at bricks-and-mortar casinos or strip clubs might not extend to internet gambling or webcam porn, leaving these types of online vice initially unregulated. Simultaneously, the external costs associated with vice consumption can be reduced via private consumption; public nuisance problems or streetwalking in the area of a triple-x theatre do not have obvious parallels with internet porn.

At-home participation also goes a long way to eliminate some of the non-monetary “costs” of consuming vice, such as the potential for embarrassment when seen walking into an adult book store or cinema, or when transacting with the clerks in such establishments. Prescription pharmaceuticals such as Viagra might be purchasable over the internet without an initial in-person consultation with a physician. Payments for internet vice might be shielded from the view of family members, too, through the use of PayPal or Bitcoins. Greater availability and lower costs suggest the possibility of considerable increases in consumption and perhaps compulsive behavior. Surely internet pornography and gambling have led to addictive conduct among many people who were not at much risk of a non-virtual porn or betting addiction; video games and the internet in general have sparked their own digital addictions (though perhaps these have served as a substitute for alcohol consumption or other vices that are less salubrious).

The internet has revolutionized what might be termed the supply sides of pornography and prostitution. Aspiring porn actors now need not travel to southern California; rather, they can produce – and distribute globally – pornography from their own homes. Escorts can advertise on the web, easing the task of making a connection with clients, and also use the internet to verify potential clients’ identities, reputations, and credit cards. Internet-based sex work is by no means a perfectly safe endeavor, but it involves much lower risks than streetwalking, and is perhaps safer still in areas where prostitution itself is legal (Weitzer 2012). Where prostitution is illegal, web publicity not only allows connections to be made, it allows law enforcers to track sellers, too. Nonetheless, the overall impact of the web seems to be, so far, on the side of diminishing the arrest risks for prostitutes (Cunningham and Kendall, 2011).

Along with a degree of anonymity, the web offers the ability to selectively undo that anonymity. Those with an interest in legal, consensual behaviors – behaviors that people might not want to openly disclose to the world – can make good use of the internet, then. People who would like to explore sado-masochistic sexual practices, for instance, can make connections over the internet in a relatively safe manner (Leitzel 2008b). They can learn about S&M, purchase books and equipment, and reveal their own experiences and fantasies. The internet has proved to be a huge boon to poker, as players can easily be brought together via the web nexus, and novice players needn’t fear face-to-face embarrassment from poor play, while honing their skills at low or even zero stakes.

Vice researchers, policymakers, and the public at large also can be educated via the internet. To the extent that it is unfamiliarity that stokes fear and suspicions of immorality, the internet holds the potential to broaden minds and liberalize the attitudes and laws that currently are arrayed against seemingly immoral vices. As always, however, the vice-related internet is doubled-edged, and depictions of odd or alarming behavior by vice participants can go viral on the web – this happened in the US in the case of the drug mephedrone (“bath salts”), which was banned in 2011 – and induce those moral panics that often drive repressive legislation. (Moral panics are not an exclusively digital phenomenon, of course; regulatory action against mephedrone in the UK was stimulated by various mistaken newspaper reports of horrific outcomes for some young people suspected of using the drug (Nutt, 2012).) The intended “selective disclosure” of sexting or social media photos of drinking or drug taking has proven to be insufficiently selective at times, with indiscretions becoming widely publicized and available to almost anyone, including future employers.

Beyond offering much greater availability to vice, the internet eases the access to treatment resources: people can be just as shy about seeking treatment as they are about publicly indulging in vice, so options to contact treatment providers over the internet can be helpful. Web-based casinos can be required to provide links to treatment providers, as well as highlight opportunities to self-exclude or self-limit.

The internet can go beyond reducing information and transaction costs and enhancing privacy; rather, it can facilitate a wholesale transformation in the nature of commercial vice, something akin to how the internet and digitization revolutionized “games”. Prostitutes and their clients, for instance, could be thoroughly vetted for disease, trustworthiness, financial solvency, and safety, even while protecting their anonymity, through internet intermediaries that collect and verify information on STD tests, credit histories, and criminal backgrounds, for instance, and allow both the buyer and seller access to that information before their encounter. (This scenario is developed more fully in Peppet (2013).) The harms associated with prostitution thereby might be greatly diminished. Personalized drugs might be designed and purchased via the web, or fabricated at home from web-acquired directions on 3D printers.

In terms of the robustness approach to vice regulation, the internet, on balance, and for the time being, seems to be helpful. Vice consumption choices are better informed, with the dangers of vices and the effects, many of them unintended and negative, connected with regulations made clearer. Those repressive regulatory regimes that are furthest from meeting the robustness principle, especially drug prohibition, are eased somewhat, and have their harms reduced, by the de facto web-based liberalization (Pepett, 2013; Cunningham and Kendall, 2013). This liberalization might make it still more evident that vice cannot be abolished – at least at any tolerable cost – and illustrate Spinoza’s wisdom, that “It is best to grant what cannot be abolished, even though it be in itself harmful.”

Draft 3.5(a), Section Six

6. Changing Times

The absence of significant harms-to-others from vice lends an instability to vice policy. If burdens or punishments cannot be calibrated against the harm of an act to society, fads and moral panics tend to fill the vacuum. At any rate, vice regulation demonstrates tremendous variation over time and place, with specific vices sometimes banned, and at other times made widely available and all-but-lauded. Some of the recent trends will be outlined here.

(1) Tobacco  The regulatory approach to tobacco, and particularly towards cigarettes, has become much stricter in recent decades. The tightening of restrictions on tobacco is a global phenomenon. The World Health Organization’s Framework Convention on Tobacco Control came into force in 2005, and has been joined by more than 175 nations. The Convention commits countries to an array of measures, including taxes and advertising controls, aimed at reducing tobacco consumption. In the US (which signed but never ratified the WHO Convention), higher taxes and diminished availability of vending machine outlets for cigarettes are two notable changes of the past twenty years, but perhaps most telling is the severe reduction in legal places to smoke in public. A trend that started with bans on smoking in airplanes and hospitals, has, in the US as in much of the world, spread to most workplaces, restaurants, and even pubs. In the US, the percentage of adults who smoke has fallen from over 40% in the mid-1960s to about 18 percent in recent years – a smoking rate that is near the global average (Holford, Meza, Warner, et al., 2014; Ng, Freeman, Fleming, et al., 2014). We have come a long way (baby), from the World War I and World War II eras, when cigarettes were included in the rations provided to soldiers and prisoners of war.

(2) Marijuana  Marijuana has been globally prohibited (and covered by the UN conventions on drugs that promote worldwide prohibition) for many decades now, but the once near-consensus that a ban (usually extended to possession as well as purchase, sale, manufacture, and transport) is desirable has shown significant cracks. (The three UN drug treaties can be accessed at Initial forays have included the legalization of marijuana for medical purposes, a change that has occurred in 20 US states and the District of Columbia. (Marijuana, medical or otherwise, remains prohibited at the federal level in the United States.) Uruguay has legalized marijuana for recreational use, too, as have two US states, Colorado and Washington. Many countries and US states have adopted decriminalization or depenalization reforms that generally preclude any sort of serious punishment for marijuana users, though sellers might still be arrested and receive significant jail time.

(3) War on Drugs  Marijuana is one of the more benign of the currently illegal drugs, and also the most popular. These factors, perhaps combined with pot’s obvious ability to offer relief to some patients in medical distress, help to explain why marijuana is the drug for which global prohibition is proving least sustainable. Nonetheless, the entire edifice of a prohibitory stance towards recreational drugs also has begun to crumble, probably due to the horrific consequences of the war on drugs. Portugal, the Czech Republic, the Netherlands, Mexico, Argentina, Uruguay, and some other countries have adopted fairly broad depenalization plans for personal use, and addiction is treated in many countries as a health problem, not a criminal justice concern. Still, much of the world, including Malaysia, Singapore, China, Vietnam, Indonesia, and Iran, among other nations, enforces draconian penalties against those deemed to be in the illicit drug trade – and possession of rather small amounts of drugs is viewed as per se evidence as involvement in the trade.

(4) Gambling  The last half century has witnessed a significant global liberalization of gambling regulations. Since 1960, the number of US states hosting legal casinos (including Native American casinos) has gone from one to more than 30, and the number of states offering lotteries has climbed from zero to more than 40. Asia recently has become a world casino powerhouse: gambling revenues in Macau are much higher than in any other casino locale, while Singapore’s two casinos have combined revenues from gambling that are about the same as that generated by the dozens of casinos in Las Vegas (Stutz, 2014).

One hopeful lesson from the expansion of global gambling opportunities is that this expansion has not been accompanied by a significant long-term increase in the proportion of the population facing serious gambling problems; nonetheless, in the shorter-term, there is evidence that problem gambling tends to rise with gambling availability (Williams, Volberg, and Stevens, 2012). One possible explanation of the differing short and long-term impacts is that with time, the novelty of easily accessible gambling dissipates, while some problem gamblers are able to adapt to abstinence or a more recreational style of play. [Adam Smith (1776, p. 518) noted such a pattern with respect to an increased availability of alcohol: “When a French regiment comes from some of the northern provinces of France, where wine is somewhat dear, to be quartered in the southern, where it is very cheap, the soldiers, I have frequently heard it observed, are at first debauched by the cheapness and novelty of good wine; but after a few months residence, the greater part of them become as sober as the rest of the inhabitants.”]

(5) Prostitution  While tobacco has become more tightly regulated in recent decades, the trend for marijuana and other drugs, and in gambling, has been towards liberalization. Prostitution is harder to characterize on a leniency scale, as the world has been splitting between opposite approaches, one that accepts some forms of legal, regulated prostitution, and another that shifts the focus on the traditional ban from prostitutes to their customers. In much of the world, prostitution is illegal, though in some places where it is criminalized – including Thailand – it is tolerated, while in other locales it is severely punished. In Britain and Canada, prostitution per se is legal, though related activities, such a streetwalking or keeping a brothel, are illegal. Brothel prostitution is legal in many countries, including Germany and Switzerland, as well as in some Australian states. New Zealand has perhaps the most liberal rules governing prostitution: consensual agreements between adults for paid sex are legal, as are related activities, including streetwalking. The alternative approach of one-sided enforcement, where sellers are not breaking the law but buyers are, was instituted in Sweden in 1999, subsequently adopted in Iceland and Norway, and continues to be influential in prostitution policy debates.

Draft 3.5(a), Section Five

5. Robustly Regulating Casino Gambling

The robustness principle, like Mill’s harm principle, suggests that gambling should be legal. As it would be difficult for people to gamble in a safe manner without gambling providers, “sales” of gambling services also must be legal. Casinos are the standard method of providing such services, though lotteries (the most popular form of gambling) generally operate in a separate system outside of casinos.

Robustness requires that the regulatory regime lead to acceptable outcomes even when many gamblers are addicted or misinformed or irrational with respect to their wagering behavior. These rationality shortfalls are not just theoretical in the case of gambling; rather, they are pervasive. Something on the order of two percent of the adult population typically falls within the clinical understanding of disordered gambling – though the percentage of casino patrons who are problem gamblers is much higher (Fong, Campos, Brecht, et al., 2011). These individuals suffer enormous costs stemming from their gambling fixation, including family breakdown, bankruptcy, and job loss. But even non-problem gamblers often misunderstand probabilities of winning and losing, and selectively forget past losses relative to wins, so that their views of their own gambling outcomes are quite skewed. Gamblers hold unreasonable beliefs about past play influencing future outcomes, such as the notion that a particular slot machine is “hot”: they believe (incorrectly) that a hot machine temporarily offers better winning prospects.

Countering incorrect beliefs is an important component of any robust gambling policy. Clear and prominent identification of the odds of winning (or perhaps of losing) could be mandated. One of the more startling facts about electronic gambling machines is that players are very poorly informed about the average “price” of a play. Regulations generally require slot machines to pay out some minimum percentage of their takings, such as 80%. A machine that costs $1 per play, and just met such a regulatory standard, therefore would have an average net price of 20 cents per play. But the machine might be set for an average return of 98% of the wagers, leaving an average net price of 2 cents per play. Gamblers are not informed of the average net price of a play, however, even though it can vary by an order of magnitude across different machines (or on the same machine over time). Imagine going to the store and buying a loaf of bread, and not knowing until you bought it whether it cost $1 or $10. And in the case of the slot machines, unless you play for many, many hours, you can’t be confident of the average net price even after you make your purchases. A mandate to provide clear pricing information would seem to be an all but necessary element of a robust casino regulatory regime.

Price information might be presented in easy to understand ways, including the “average net price per play,” as described above. In addition, for instance, the expected loss per $100 wagered could be given. (Today’s networked, progressive slots imply that the expectation changes over time, but second-by-second updating is easy to electronically compute and display. The potential to play multiple lines on a slot machine also muddies the picture, but again, not in such a way that prices of different gambler options can’t be determined and displayed.) Other information that could continuously be on offer might be the amount of money wagered in a given session, the current net loss position, and the amount of time spent gambling. (Problem gamblers not only suffer from money woes, they also end up spending very significant amounts of time gambling, to the detriment of other dimensions of their lives; see, e.g., Nelson, LaPlante, Peller, et al., 2008). The electronic cards that most regular gamblers use as part of casino loyalty programs also can be used to gather and disseminate this information.

Self-limit and self-exclusion programs should also be part of a robust gambling regulatory regime. A self-limit program allows gamblers to pre-commit as to how much money they are willing to lose prior to a gambling session. (The relevant timeframe could be longer, too, such as limiting losses per month or per year, or limits could be set across multiple timeframes.) The limit is irrevocable, so that in-the-moment passions cannot override judgments made earlier and (hopefully) in a more considered fashion. It would also be compatible with a robust regime to require every patron to choose a binding loss limit upon entering a casino – a policy Australia has considered implementing – as such a policy can do much to limit the harms of gambling, while imposing very little on rational bettors, who, like everyone, would be allowed to choose a very high limit if that is their pre-gambling preference.

Self-exclusion programs are an extreme form of voluntary self-limit, in that the limit is set to zero. Generally gamblers who choose to self-exclude are not allowed admission to a casino, and can be charged with trespassing should they attempt to breach their agreement. Administration is less than perfect, but enforcement can be aided through technological means such as facial recognition software, or by requiring that all casino patrons present identification upon entering. (The imposition of an ID requirement on non-excluded gamblers is sufficiently minimal that it would not violate robustness, and in any event, ID checks often are necessary to enforce age restrictions.) Jurisdictions typically offer multiple options when self-excluders choose the duration of their ban; some exclusion agreements are in effect for as little as 6 months, while others go to five years and beyond.

A self-exclusion program allows gamblers to opt out, while offering more commitment to that choice than comes from most declarations of abstinence. (Individuals might be able to sign private commitment contracts that also raise the stakes of breaching a no-gambling pledge, and hence potentially provide more motivation to abstain, too; see Further, the self-exclusion system operates in a fashion that is all but invisible to those satisfied gamblers who choose not to opt out. (A common shortcoming of self-exclusion programs is that they are invisible to problem gamblers, too, in the sense that many regular casino patrons do not know about the existence of self-exclusion schemes.) A more forceful version of an exclusion regime is to alter the default setting so that exclusion is the starting point: adults who want to gamble must opt-in, must take some positive steps to acquire a “license” to gamble. Those positive steps might be quite minor, such as a few days delay between the moment that a license (or “membership” in a casino, perhaps) is applied for and when the license is granted – this was a longtime British casino regulation – or something more involved, including passing an exam indicating that the applicant possesses a basic understanding of probabilities and the likelihood of monetary loss from casino gambling. People who choose not to take the requisite positive steps, then, are thereby self-excluded.

Draft 3.5(a), Section Four

4. One Guiding Principle for Vice Regulation

Despite the wide and changing variety of vices and the broad universe of potential controls, there might be some general principles underlying desirable vice regulations, as John Stuart Mill suggested. Mill’s harm principle presents a good place to start in seeking general guidelines, and is consistent (in Mill’s interpretation) with some rather severe controls, such as considerable sin taxes and bans on advertising. Nonetheless, the harm principle essentially does not allow harms inflicted on adult users themselves to motivate vice controls (Leitzel 2008). But the case for significant harms-to-self to be reflected in regulation is strengthened the more that adult vice-related decisions deviate from rational choices – an argument that Mill (1848 [1909], V.11.23) himself provides in a non-vice context in his Principles of Political Economy.

How far from rationality are adult vice-related decisions? Some of these decisions look like the product of diseased or addicted minds, and many other decisions seem to be significantly short-sighted. Nonetheless, most decisions to drink a beer or to patronize a casino or (perhaps) visit a prostitute are not hopelessly riddled with irrationality, and even the behavior of addicts possesses a certain logic (Becker and Murphy 1988). If it were possible to separate the diseased or compulsive or irrational decisions from the fully judicious (or even reasonably judicious) ones, then (presumably) a desirable regulatory regime would intervene only on the irrational side of the ledger, leaving rational adults to their own vice-related devices. It is not possible to target regulations in such a fashion, however – indeed, an individual, looking at her own behavior, might have a hard time distinguishing between her tolerably rational and her well-less-than-rational vice decisions.

Given the infeasibility of optimal targeting, one approach is to try to limit the costs imposed by any of the less-than-perfect alternatives. A policy that prevents a good deal of rational (and hence individually beneficial) vice consumption from taking place presents a high cost in terms of that forgone pleasure, and if it involves prohibition, for instance, it could also mean significant costs in terms of harming the lives of many individuals who are arrested or imprisoned for engaging in a behavior that is perhaps broadly disapproved but not otherwise socially damaging. Alternatively, a policy that fails to dissuade imprudent vice or to mitigate the negative consequences attached to significant amounts of unconsidered or irrational vice participation generates large costs associated with those disordered vice choices. As we can’t be fully certain whether there is a good deal of rational vice behavior, or a good deal of irrational vice behavior, or both, there is something to be said for avoiding policies that would be disastrous under any of these circumstances. That is, vice policy should be robust with respect to the amount of rationality governing vice-related choices (Leitzel 2008).

Policy regimes that exhibit this sort of robustness generally will look to encourage informed choice, perhaps by ensuring that accurate information about the potential dangers of vice is conveyed. Reliable information is an input into rational choice, but even informed choices can still be imprudent to the point of irrationality. So, a robust regime also will seek to counter addiction and excessive taste for instantaneous gratification, as long as the methods used for these purposes do not significantly impose upon rational adult vice consumption. Robust policies inform and instruct, but do not compel; they involve nudges (Thaler and Sunstein, 2008), not commands. They permit but do not promote vice indulgence, while trying to discourage excessive or imprudent involvement with vice (Bogart 2011).

 In terms of current vice policies in the United States, some policy regimes regulating legal vices (alcohol and gambling, for instance) fall short of robustness by being insufficiently protective of less-than-rational or addicted consumers. But it is with respect to the illegal drugs and prostitution that current policies are least robust. The prohibitions that govern these vices not only preclude some “rational” consumption, they produce a host of other harms as well. In the case of drug prohibition, some 1.5 million people are arrested each year; more than 80% of these arrests are for small-scale possession (Crime in the United States 2012). About half of the federal prison population in the US is serving time for drug-law violations (Federal Bureau of Prisons). Police and inner-city youths are presented with considerable monetary inducements to tolerate or actively participate in the illicit drug trade, and many of them (understandably) cannot resist these inducements. The underground markets are quite violent, and the violence spills over into urban neighborhoods more generally, while source and transit countries such as Mexico see drug-related homicides that can number in the tens of thousands annually. US-style drug prohibition not only does not meet the robustness principle, it can scarcely qualify as a rational policy itself.

The discussion of robustness so far has centered on consumers of vice, though there might also be concerns about the rationality of decisions to become a provider of vice, particularly (but not exclusively) with respect to pornography or prostitution. Some people enter these “industries” while they are still underage, and hence are not in a position to provide meaningful consent. An excessive present bias or a drug or alcohol habit might also undermine decision making, and lead to a neglect of the long-term costs of sex work. Alcohol and drugs might be provided by unscrupulous (or criminal) people precisely in an effort to break down reasonable reservations about performing in porn or engaging in prostitution. (Parallel concerns might exist surrounding decisions to enter the illicit drug trade.) For these reasons, a robust regime needs to ensure that suppliers are non-coerced, well-informed, and have ample opportunities to exit vice provision.

Much of the public dialogue about vice policy pointedly ignores the potential benefits of vice, focusing only on the costs. As the total costs arise both from the prevalence of vicious behavior and the average cost per “use” or “incident,” policy that is interested in reducing costs might aim at limiting prevalence, or at reducing the harm per incident. Prevalence and harm-per-incident are not independent, however: policies such as a strict prohibition that try to reduce (or, as “zero tolerance” suggests, eliminate) the prevalence of a vice tend to simultaneously raise the cost per incident (MacCoun and Reuter, 2001). Drug prohibition, for instance, results in more potent varieties traded in the underground market, which itself can be quite violent. Drug addicts in need of treatment might be afraid to go to the hospital (or their friends might refrain from taking them to the hospital), out of fear that the criminal law will be arrayed against them should they present for a drug-related problem.

What has become known as the “harm reduction” or “harm minimization” approach to illicit drugs typically focuses on reducing the harms per incident, while being rather unconcerned about overall prevalence or whether the harms are external or suffered by the vice participants themselves. Policies that fall under the drug harm reduction rubric include: (1) the provision of maintenance doses for opiate addicts; (2) monitored sites in which injecting can take place in a safe manner; (3) clean needle exchanges for injecting drug users; (4) the liberal availability of opiate antagonists to reverse potential overdoses; (5) good Samaritan laws that preclude criminal charges against drug users or their friends when they present at an emergency room for treatment; and, (6) drug purity testing so that users can know what they are taking. Such policies are common in Europe, though remain controversial in the US. These sorts of harm reduction measures push the existing prohibition regime somewhat closer to meeting the robustness standard, by reducing the ancillary costs associated with prohibition, with little or no spur to the prevalence of drug use from these “subsidies.” For vices that already are governed by regimes less strict than drug prohibition, harm reduction’s neglect of the benefits of vice eventually would drive a wedge between robust policies and harm-reducing measures. Perhaps an easy-to-enforce prohibition would minimize the costs associated with some vice by eliminating it, but such a policy would not meet the robustness criterion, by being too constraining on “rational” would-be users.

Draft 3.5(a), Section Three, second half

d. Prescription

Some drugs such as morphine and cocaine that are used recreationally also have recognized medicinal uses. (Many popular drugs, including distilled alcohol and tobacco, achieved broad global footholds in part through perceived medical benefits.) Even in cases where those drugs fall under a general sort of manufacturing and sales prohibition, they can be made available to appropriate patients via prescription. Complications ensue when: (1) there is severe disagreement about the medical value of the drugs (as seems to be the case with marijuana, which is not legal currently for medical use at the federal level in the US, though medical marijuana is legal under the law of some 20 states); (2) there is severe leakage from the authorized medical supply to unauthorized recreational use, as with some popular painkillers; and (3) the authorized medical use involves treating addiction to the drug or a related drug itself, as with heroin or methadone maintenance for heroin addicts. As many of the harms associated with addiction to a prohibited substance are due to the expense and insalubrious nature of black-market dealings – which include purchasing drugs of unknown purity and potency – the provision of pharmaceutical grade drugs to addicts, in a safe setting, can lower the overall social costs of addiction.

e. Time, Place, and Manner Controls

Just as purveyors of legal vices often are highly regulated, so too vice consumers can face detailed restrictions on the acceptable time, place, and manner of consumption. Cigarette smoking, for instance, is not permitted in many work places and public buildings, and sometimes smoking is forbidden in private automobiles if children are passengers. Public drinking and possession of open alcoholic beverage containers are other actions that commonly are forbidden, though drinking itself is legal. Nudity and obscene speech that is legal in private might be illegal in public. Gambling might be allowed, but not on city buses, and features of electronic gaming machines (such as rate of play, stakes, and deceptive “near misses”) can be the subjects of regulation.

f. Individual-level Controls

Prescription systems provide drug access on an individualized basis, and a variety of other controls also permit specific personal circumstances to influence the terms under which drugs are made legally available. One possibility is to authorize adult drug purchase and consumption, but to make an adult’s continued legal access contingent on specified types of good behavior. For instance, someone who is convicted of drunk driving or drinking-related domestic violence might lose the right to consume alcohol. The ban can be enforced by frequent testing or continuous alcohol monitoring technology – an approach which has been used extensively in South Dakota and has spread to numerous other jurisdictions, and can be deployed against the consumption of drugs other than alcohol (Kilmer and Humphreys 2013).

Enforced vice abstinence might be voluntarily chosen, as with gambling self-exclusion. These programs allow people concerned about their own willpower shortages to relinquish, for some period of time such as one or five years, their right to gamble. Casinos are supposed to prevent self-excluded individuals from entering their premises; if the self-banned gamblers avoid detection, they will be unable to collect any sizeable winnings, because identification must be provided to make such a collection and their excluded status will be revealed. Self-exclusion programs have become an important tool in countering disordered gambling. Voluntary bans can be partial as well as full: an exclusion program might allow a loss-limit to be established before entering a casino, or restrict the number of monthly visits to betting parlors, for instance. Full or partial exclusions might also derive from sources other than the legal authorities or the vice consumer him or herself: in Singapore, family members can initiate a gambler’s exclusion from casinos. Casinos themselves might choose to make suspected problem gamblers feel unwelcome (Thompson 2010), perhaps under regulatory pressure or with an eye to limiting potential civil liability.

A regime where vice is legal but some people are dissuaded or barred from partaking often holds appeal to vice suppliers. Manufacturers and sellers understand that the continuing legality of their product is not guaranteed. A narrative that suggests that their product (liquor or gambling, say) is wholesome for most users, but that a small minority are susceptible to a sort of disease of disordered consumption, tends to shift the focus of regulatory attention away from the product itself (the vice) and onto the group of vulnerable users (the set).

Rather than start from a position of general adult availability, from which some people can be forcibly or voluntarily removed, the default position could be no legal access to vice, but with the possibility of opting in (Leitzel 2013). Adults could apply for a license to consume heroin, for instance, and the conditions under which it is made available can be designed to reduce the likelihood of the development of compulsive use. For instance, purchases might have to be arranged in advance, with the transaction consummated three days later, to counter impulsive consumption. Licenses can be withdrawn from consumers who commit crimes or harm others under the influence of their drugs. Such a licensing system also puts vice consumers in touch with the regulatory system in a manner that can facilitate their access to treatment resources, should addiction occur despite the safeguards. Individualized systems of alcohol control, such as a person-by-person rationing scheme (with a modest upper limit) in Sweden, were common between the 1920s and 1960s, fell out of favor, but now are enjoying a small-scale renaissance in the form of mandatory abstention orders (Room 2012).

Draft 3.5(a), Section Three, first half

3. Surveying the Range of Controls

The likely outcomes of indulgence in vice vary with respect to the vice itself, including its method of administration, the neurochemistry and expectations of the vice consumer, and the social milieu (including the regulatory background) in which the vice behavior occurs: vice, set, and setting, to adapt the renowned triad of Zinberg (1984). In the case of alcohol, for instance, there is variance with respect to potency and type (fermented or distilled), expected behavior under the influence (MacAndrew and Edgerton, 1969) and peer influences on amounts consumed. It is even possible to consume alcohol through modes other than drinking, such as by inhaling alcohol in vapor form. Policy can influence all dimensions of the vice experience, and can attempt to channel vice into those manifestations that offer the best prospects for adding to overall wellbeing.

The daunting variety of available vices complicates the design of vice policy because of the potential for regulation-induced substitution between vices, often in directions that are hard to predict and variable across time and place. A legalization of marijuana might decrease the amount of alcohol consumed. An increase in liquor taxes might spur the consumption of non-beverage alcohol-based substances such as colognes; these potentially poisonous “surrogates” are frequently consumed by alcoholics in Russia (Tomkins, Saburova, Kiryanov, et al., 2007). Vice behaviors also can be complements, not substitutes. Some bars and restaurants report declining alcohol sales following the adoption of public smoking bans; casinos and bingo venues seem particularly susceptible to revenue declines in the face of prohibitions on smoking. At an individual level, co-morbidity is commonplace among vice addicts; for instance, a majority of pathological gamblers suffer from alcohol addiction, too (Zimmerman, Chelminski, and Young, 2006), and it might prove impossible to curb the gambling problem without addressing the drinking problem.

In this section, I will offer a brief survey of the range of vice controls; I postpone to subsequent sections discussion of the desirability of particular regulations.

a. Prohibition

Most vices, including forms of gambling, prostitution, pornography, alcohol, tobacco, and other psychoactive drugs, have met with prohibitions at certain times and places, including contemporary times and places. The term “prohibition,” however, can be applied both to very strict and rather lenient regimes, not only because of variation in enforcement and associated penalties but also because of disparities concerning the precise vice-related activity that is prohibited. In the case of a drug, for instance, it is possible that there might be a full range of prohibitions, including bans on manufacture, transport, sale, advertising, purchase, possession, consumption, or even possession of inputs (precursors) or complements to consumption (paraphernalia). National alcohol prohibition in the US (1920-1933) did not involve a ban on purchase or possession, though these behaviors are banned for many of the currently illegal drugs. Sales of cannabis are prohibited in the Netherlands, but a formal non-enforcement policy intentionally has opened the door to de facto legal (small-scale) sales. Some countries have followed the lead of Sweden by adopting a prohibition on prostitution that bans the purchase, but not the sale, of sex; this policy reverses what in the past often has been (and in many places still is) the legal situation, where sales of sex are illegal but purchase is legal or informally countenanced.

b. Licensing and other Controls on Manufacturers and Sellers

Vices that are legal (in some manifestations) nonetheless often are highly regulated, and one element of that regulation typically involves the licensing of manufacturers and sellers. Commercial liquor producers, distributors, and retailers, for instance, are licensed in the United States. Lottery providers generally are licensed (or the state operates its own lottery monopoly), as are casinos. Brothels are licensed in those jurisdictions where brothel prostitution is legal, and cigarette sellers tend to be licensed as well.

Seller licensing can serve many purposes. Sales of legal vices often are accompanied by a wide variety of restrictions, and the licensing helps to enforce those ancillary rules, as sellers are identifiable and non-compliant sellers can be fined or have their licenses withdrawn. These ancillary rules implicate many dimensions of vice selling: alcohol sellers face opening hours restrictions and a ban on sales to minors, for instance. Concern with excessive consumption might generate mandatory price floors to preclude prices that are deemed to be too low. Pornographic magazines and other material might not be allowed to be displayed openly, or restricted to adults-only areas of shops. Broadcast television and radio in the US is subject to stricter rules on “indecent” programming between the hours of 6AM and 10PM; other countries restrict adult content programming to “watershed” hours when children are less likely to be viewing. Seller licensing can also be used to curb the overall prevalence of sellers – with the intention, perhaps, to dissuade excessive consumption – and licensing facilitates tax collection.

Concerns about the recruitment of children into becoming vice consumers, as well as worries with adult intemperance, sometimes result in restrictions upon the advertising of legal vices. A sort of regulatory compromise might develop, where a casino can operate, but it cannot broadly advertise, or a licensed store can sell liquor, but not publicly declare its commitment to low prices. Sometimes counter-advertising, in the form of public service advertisements highlighting the dangers of vice, or in printed warnings on the packaging of substances like alcoholic beverages and cigarettes, also is publicly mandated.

c. Taxation

One of the standard theoretical approaches to the correction of externalities is to impose a compensatory tax. The idea is to choose the size of the tax so that the costs imposed upon others are fully internalized by the decision maker. Such a tax, termed a Pigovian tax, perfectly compensates for the original distortion, so that individual rational decision making no longer comes at the expense of the social good. For this reason, there is a strong case for vice taxes to at least cover the average external costs of vice-related behavior – otherwise, vice essentially is subsidized. In the US, alcohol tends to be taxed at too low a level compared to the Pigovian standard (Cook and Moore 2002), whereas cigarettes are taxed at a level that exceeds expected external costs (Gruber 2002).

Vice taxes might want to go further, however, and compensate for underrepresented harms to users themselves, along with accounting for external damage. That is, the distinct possibility that individuals might overconsume their vices due to their own rationality shortfalls offers a rationale for tax rates above the standard Pigovian levels. The tax in this case increases the immediate cost of vice consumption, helping to offset the excessive use stoked by present benefits paired with delayed and probabilistic costs. To the extent that such overconsumption (from the point of view of the vice consumer herself) is a problem, taxes actually can make the consumer better off – at least when she looks at her situation from her long-run perspective. (And for vices that appeal disproportionally to lower income consumers, the fact that the users themselves are “beneficiaries” of the tax can allay some of the concern with the otherwise regressive nature of the tax.) It has been estimated that the future health costs of smoking a pack of cigarettes might be as high as $32 (Gruber and Köszegi, 2001), and the mortality costs of consuming an alcoholic beverage have been estimated at over $15 (Carpenter and Dobkin, 2011, page 153). Is it likely that smokers and drinkers are fully accounting for these costs when they make their tobacco and alcohol consumption decisions?

Taxes can be used to discriminate among modes or forms of consumption; such discrimination might be appropriate given differential external and internal costs associated with the various modes. Distilled alcohol, for instance, can be taxed more highly than beer or wine; on-premises alcohol consumption can be taxed more heavily than package goods intended for off-premises consumption. Cigars or pipe tobacco can be taxed at lower levels than cigarettes.

The revenue generated via sin taxes itself might become highly valued by those whose budgets are thereby boosted. The result can be a policy-induced ambivalence about vice, where lower consumption might be viewed as desirable in terms of reducing externalities and improving the health of vice participants, but the resulting revenue declines might undermine the political interest in promoting temperance. Vice-specific taxes create allies for vice sellers, constituencies that share a pecuniary interest in increased consumption. Sometimes such alliances are created in advance, to promote the legalization of a vice. The introduction of a state lottery, for instance, often involves a promise to earmark tax revenues to worthy public endeavors, such as higher education. Tax revenues and other economic advantages also can lead to situations where vice is sold, but only to foreigners. Most of South Korea’s casinos, for instance, are off-limits to would-be domestic gamblers; internet casinos legally can be based in Australia, but they cannot offer their services to Australian residents.

Draft 3.5(a), Section Two

2. Why Regulate Vice?

The shared qualities of vicious habits, especially the lack of direct harms to others, suggest the possibility that desirable regulations for the entire range of vices also will possess some common features – features that might not be appropriate when controlling activities such as burglary that involve serious external costs.

Why should vices be controlled at all? One possibility is that a subset of vicious activities, such as drinking to the point of inebriation, though self-regarding in themselves, might be closely connected with harm to others: drunk people often put others at severe risk through automobile accidents and interpersonal violence, and annoy their communities through loud and boorish behavior. (Maybe you should be concerned if your neighbor drinks regularly.) If methods of directly controlling such ancillary harms are deemed to be insufficient, then some regulations upon drinking aimed not so much at controlling alcohol consumption as at limiting the follow-on behaviors might be sensible. A similar principle applies with respect to protecting children: some controls on adult vice might be enacted to help shield children from vice, if it is not possible to effectively control child access in an unregulated environment for adults.

Externalities and threats to the underaged do not exhaust the rationales for controlling vice, however. Vices can harm their consenting adult participants, and a bad habit can shade into a compulsion or addiction. In themselves, harms to voluntary vice participants might not suggest much of a motive for extensive regulations specific to vices. Many human leisure activities, from bowling to ballroom dancing, present dangers to participants; some pursuits, such as mountain climbing and equestrian events, not infrequently involve fatal accidents. We might want to promote proper training and look for ways to make leisure activities safer, but generally we allow adults to weigh the pleasures and dangers of their recreational activities for themselves.

In the case of vices, however, our respect for the primacy of individual choice is eroded by justified suspicions that those individual choices frequently fall well short of rationality. Vice consumption is prone to excess. The standard time profile of the chief effects of a vice involves current pleasure and future pain, and the pain is not a certainty: a regular drinker might not become an alcoholic, a regular cigarette smoker might not contract cancer. In the face of the common human frailty of a disproportionate interest in instant gratification, current benefits paired with uncertain future costs are likely to lead to overindulgence, even from the longer-term point of view of the vice participant himself, a case of imprudence if not of immorality. That is, among leisure activities, vices seem particularly likely to compromise rational decisionmaking. Non-addicted adults often suffer from an acute loss of restraint in their drinking or gambling, for instance, while the behavior of addicts seems to steer well clear of any sort of informed, rational process. Addiction does not eliminate all control, but it does press hard against limited stores of willpower, to the point where many scientists, seasoned observers, and addicts themselves regard addiction as a disease of the brain. The basic economic argument for laissez faire is that, in the absence of harms to others, an unfettered and undistorted competitive marketplace leads to maximum overall wellbeing. This argument is inapplicable, however, if individual decisions are the product of disease or are otherwise less-than-rational.

The idea to regulate adult vice for the sake of protecting kids and redressing direct harms to others is not itself particularly contentious, though there might be significant disagreement over what specific controls will accomplish those ends, as well as differences concerning the costs of potential regulations. Protecting adults from their own decisionmaking tends to be more divisive, however. John Stuart Mill (1978 [1859]), for instance, would support attempts at persuasion, pro or con, at least if those attempts are undertaken by parties with no pecuniary interest in promoting intemperate vice consumption – but Mill’s harm-to-others condition for societal coercion generally would bar regulations aimed at reducing adult vice consumption. Certainly the prohibition of a vice would not be countenanced by Mill, any more than bans on other dangerous, self-regarding activities, such as swimming or skiing, could be countenanced. The “sin taxes” that are imposed upon legal vices often seem to be motivated more by an interest in raising revenue (and perhaps registering societal disdain) than at reducing consumption. Mill himself approved of sin taxes if their aim was to raise revenue, but not if their motive was to dissuade vice consumption; therefore, his approval only was forthcoming as long as the taxes did not exceed the revenue-maximizing level.

Actual vice policy frequently is quite un-Millian, however, in that highly restrictive policies are enacted that have as a major goal that of protecting adult consumers, by threatening negative legal consequences upon those very adults who choose to consume in the face of a prohibition. Policies that threaten to harm people to deter them from harming themselves tend to invoke the full range of rationales, of course, including the protection of children and the need to prevent harms to others. But to the extent that harms to the users are driving the restrictive policies, these policies involve a somewhat self-contradictory view of rationality: adult vice consumers cannot be trusted to make decisions that are in their best interests, but the punitive measures will only provide deterrence if those users respond rationally to the legislated legal consequences.

Even in a world without vice-specific public policies, vice would still be subject to informal social controls: the immorality that is associated with vice needn’t dissipate just because the law is not mobilized. Agitation by moral entrepreneurs and religious groups for temperance or abstinence is a standard element of discussions surrounding legal vices such as drinking and gambling and sexual promiscuity.

Draft 3.5(a), Section One

Regulating Vice

“He who seeks to regulate everything by law, is more likely to arouse vices than to reform them. It is best to grant what cannot be abolished, even though it be in itself harmful. How many evils spring from luxury, envy, avarice, drunkenness, and the like, yet these are tolerated – vices as they are – because they cannot be prevented by legal enactments.” – Spinoza, Chapter 20, Tractatus-Theologico-Politicus, 1670.

1. Vice

Behaviors that long have been considered to be vices include excessive or habitual indulgence in gambling, some sexual activities, and the use of psychoactive drugs such as nicotine or alcohol or opium. Pornography often is classed among the vices, and US Supreme Court Justice Potter Stewart’s famous abdication from providing a precise definition of pornography – “I know it when I see it” – might equally well apply to vice (Jacobellis v. Ohio, 378 U.S. 184 (1964)). Nonetheless, any effort to offer a more detailed, if not more precise definition, likely would invoke the notion of a bad habit, and often a habit where a supposed immorality is at least one element of the “badness.” Routines such as compulsive book reading or exercise, which can become detrimental for the practitioner and his or her intimates, avoid the vice label through their lack of the taint of immorality.

An excessive attachment to armed robbery might constitute an immoral routine, but such a commitment lacks another component of vice, namely, that vices, at least in some of their common manifestations, do not involve any direct harms foisted upon non-consenting bystanders, do not involve any substantial negative externalities. That is, indulgence in a vice might harm the indulger, but others needn’t fear any immediate danger, especially if the vicious activity does not take place in a pubic setting. If someone down the street from you habitually drinks alcohol, or smokes crack, or is entertained by prostitutes, you generally can rest easy, at least if their practices are undertaken in private. A committed burglar down the street is worth more of your concern. Unlike burglary, many vice behaviors, to employ the terminology of Jeremy Bentham (1948 [1823]) and John Stuart Mill (1978 [1859]), are self-regarding, and vice participants may or may not accept the view that their behavior is immoral.

Draft Three(a)? Draft Four(a)?

The attentive Five Drafts reader will note that a couple of deadlines have passed without any reported progress. Do these developments (or absence of developments) suggest that the Five Drafts commitment device is not working? No, I maintain. It isn't perfect, but it is better than the alternatives. At any rate, I soon (promise?) will post what will hence be known as Draft 3.5(a).