Institutional hypocrisy enabled by wealth, part 2, gambling edition

My comment from July 18 regarding Daniel Okrent’s Last Call: The Rise and Fall of Prohibition:

[…] hypocrisy regarding victimless crimes is a luxury good. It can be indulged when a society has sufficient wealth that it can afford to be hypocritical, signaling that its members want to be perceived as virtuous even when many of them as individuals would prefer to indulge in alcohol, other drugs, or sex-for-money.

Today’s New York Times:

With pressure mounting on the federal government to find new revenues, Congress is considering legalizing, and taxing, an activity it banned just four years ago: Internet gambling.

Lesson: moralizing is a vice enabled by excess wealth. Now that our societal wealth is not quite so vast, maybe we’ll consider lowering the prison population; as the Economist wrote, America locks up too many people, some for acts that should not even be criminal.

Releasing some of them would be morally justified, as the Economist makes clear, and probably economically rational. This assumes such people are not Zero marginal product workers, as Tyler Cowen discusses at the link. Such an assumption might be too large to be sustained; I can’t evaluate the arguments about zero marginal product workers very well.

Hypocrisy as enabled by wealth: a lesson from Daniel Okrent's Last Call

In Daniel Okrent’s Last Call: The Rise and Fall of Prohibition, he writes: “As businesses came apart, as banks folded, as massive unemployment and homelessness scoured the cities and much of the countryside, any remaining ability to enforce Prohibition evaporate.”

One can extract a larger point from this passage relating the Great Depression’s effects on Prohibition: hypocrisy regarding victimless crimes is a luxury good. It can be indulged when a society has sufficient wealth that it can afford to be hypocritical, signaling that its members want to be perceived as virtuous even when many of them as individuals would prefer to indulge in alcohol, other drugs, or sex-for-money. The same basic dynamic is playing out in California with weed: the state is broke; willing buyers buy from willing sellers; the cost of enforcement and imprisonment is pointless; and the tax revenue increases the temptations of legalization.

The Economist has recently reported on this dynamic regarding California: “Another big topic in a state with a $19 billion budget hole is the fiscal impact of legalisation. Some studies have estimated savings of nearly $1.9 billion as people are no longer arrested and imprisoned because of marijuana.”

A lesson Last Call offers is that societies can afford to become more hypocritical as they become wealthier. But when we have to confront the trade-offs that pointless policing of personal behavior entails, the costs of various kinds of prohibition become relatively higher and no longer look as appealing as they once did.

Hypocrisy as enabled by wealth: a lesson from Daniel Okrent’s Last Call

In Daniel Okrent’s Last Call: The Rise and Fall of Prohibition, he writes: “As businesses came apart, as banks folded, as massive unemployment and homelessness scoured the cities and much of the countryside, any remaining ability to enforce Prohibition evaporate.”

One can extract a larger point from this passage relating the Great Depression’s effects on Prohibition: hypocrisy regarding victimless crimes is a luxury good. It can be indulged when a society has sufficient wealth that it can afford to be hypocritical, signaling that its members want to be perceived as virtuous even when many of them as individuals would prefer to indulge in alcohol, other drugs, or sex-for-money. The same basic dynamic is playing out in California with weed: the state is broke; willing buyers buy from willing sellers; the cost of enforcement and imprisonment is pointless; and the tax revenue increases the temptations of legalization.

The Economist has recently reported on this dynamic regarding California: “Another big topic in a state with a $19 billion budget hole is the fiscal impact of legalisation. Some studies have estimated savings of nearly $1.9 billion as people are no longer arrested and imprisoned because of marijuana.”

Societies can afford to become more hypocritical as they become wealthier. But when we have to confront the trade-offs that pointless policing of personal behavior entails, the costs of various kinds of prohibition become relatively higher and no longer look as appealing as they once did. Drug prohibition is a salient example.

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