PROHIBITION ECONOMICS

Ban the bans, and leave the kids alone!

“Economics is all about consumption. People either spend money now or they use financial instruments — like bonds, stocks and savings accounts — so they can spend more later.”

-Adam Davidson

Economic prohibitions are like the T.V. series, CID. It takes a little thinking through to realise just how bad of an idea it is. In this article, I refer to economic bans as simply bans. Let’s jump into it then:

Bans have been beautifully summed up by Business Standard as: “Politically sound and economically unsound.” One need only look at the beef ban in Maharashtra that has cost the state losses worth more than Rs 10,000 crores. In 1995, when N.T. Ramarao banned alcohol in Andhra Pradesh, it had to be lifted in 1996 to subsidise rice and electricity for the masses. Bans kill sources of revenue for the government, and thus, any ban is a self-defeating exercise. Nitesh Kumar has used this vehicle of banning alcohol to get the women vote bank, while one can read about how this move could make it difficult to subsidise costs and implement the new pay commission’s recommendations. Interestingly, the U.K- before it was in the news for the most public breakup (with the EU) since Salman Khan and Katrina Kaif- on adding prostitution and drugs in its GDP count, found that it was in fact, the fifth largest economy in the world.

Other than revenue, the biggest threat is to those who were formerly involved in the trade now declared illegal. Take the Maharashtra beef ban. An estimated 50,000 people involved directly and 100,000 people involved indirectly were affected by this ban. What happens to their families? The government will not provide them with any alternatives, and for many of them, this profitable trade was their means of moving up the social strata. Progressive ideologies with regressive repercussions. In light of the last statement, all that is left to do now is, dress up these bans in a muffler, give them some cough syrup, and make them do the bhangra dance.

Bans have the added distinction of promoting deviant elements to profit. Take for example the alcohol prohibition era in the USA from 1920–33. This prohibition gave rise to one of the most fearsome and overweight gangsters of that time: Al Capone. While the mafia indulged in prostitution, gambling, and other disreputable (enjoyable) ventures; the ‘bootlegging’ industry helped the mafia grow exponentially, and became much stronger once the prohibition ended.

It’s interesting to note that bans may be counterintuitive in their effects. Research from the USA has shown that increased tolerance towards homosexuality actually reduces the cases of AIDS among that group. It has been estimated that the ban on same sex marriage in California may have led to more than 1,100 extra cases of HIV than there would have been if they had legalised it. In the prohibition era, it had been reported that in the top 20 cities in America, crime had increased by 24% and drug addiction by more than 40%. There is a principle in design that says that no matter what kind of fancy new lock you design, someone will find a way around it. In the cases of bans of such unreasonable nature, it has transformed into this kind of monstrosity.

Bans can never be justified, since they disadvantage society as a whole. Being a man of few words (and word limits) I will let the wise Adam Smith do the honours:

“I have never known much good done by those who affected to trade for the public good.”

• Aditya Kovvali