GOVERNMENT NOT NEEDED
Self-regulation helps the porn industry stay safe; similar incentives suggest this would work with prostitution
BY DOUG FRENCH

Doug French, associate editor of Liberty Watch: The Magazine is an executive vice president of a Nevada bank. He is the 2005 recipient of the Murray N. Rothbard Award from the Center for Libertarian Studies. Other stories by Doug French

Sex workers descended upon the Palace Station Hotel last month for a convention. According to the Las Vegas Review-Journal, Las Vegas was picked to host the convention because Nevada has 28 operating bordellos throughout 10 counties. 

So while Metro steps up efforts to stop consensual sex for money between two adults within the borders of Clark County, even in age-restricted retirement communities, prostitutes are practicing their trade out in the middle of nowhere causing prices to rise and underground markets to develop. These 28 brothels run squeaky-clean shops by law, and because of this, are not the kinds of places sex workers want to work, according to prostitution advocate, Priscilla Alexander. "Nevada brothels often hire women to work for just weeks at a time, require prostitutes to live on the premises and mandate costly STD tests too frequently," she told the R-J. State law requires that registered brothel prostitutes be checked weekly for several sexually transmitted diseases and monthly for HIV. Also, condom use is mandatory. Owners may be held liable if customers become infected with HIV after a prostitute has tested positive for the virus. 

But even with no government regulation, the testing and rules that Ms. Alexander complains about would likely be in place. Business owners have a profit incentive to provide a product that includes the patron living healthy and happily ever after the service has been provided. 

In a recently completed paper entitled, "Fatal Adverse Selection and Self-Regulation in the Adult Film Industry" (which is about the adult film industry's response to an adult performer testing positive for HIV in 2004), Metropolitan State College of Denver assistant economics professor Alexandre Padilla shows that profit motives "provided the necessary incentives to adult film industry to self-regulate and find mechanisms to attempt to contain those potentially deadly diseases" that would've been deadly for the entire industry. 

Economic literature argues that when some individuals have more information than others, the more informed individuals will gain at the expense of those who are less informed. Thus government is called upon to intercede, protecting the less informed individuals. An HIV outbreak would seemingly be the perfect example of this asymmetric information problem and numerous California lawmakers demanded that government act to protect adult film performers (and a big taxpaying business). 

But it turns out that the adult industry "has been able to successfully develop private self-policing rules to establish standards of behavior to mitigate the outspread of Sexually Transmitted Diseases (STDs) and, more particularly, the most fatal one, HIV/AIDS, in the industry with minimal government intervention," explains Dr. Padilla. 

Given that an adult performer can have dozens of different partners in a month, it's possible that the entire industry could be infected in days. With all of this profit-making promiscuity, one could surmise that the incidences of STDs and HIV would be higher than in the general population. But statistics don't bear this out. In fact, the adult industry has a lower rate of HIV and STD infection. Economic incentives serve to keep adult film performers healthier on average than the general population that doesn't have the same sorts of incentives. 

When Darren James tested positive for HIV in 2004, the Adult Industry Healthcare Foundation (AIM), a watchdog organization started by adult film actress Sharon Mitchell, determined within 48 hours that James had direct contact with 14 performers, and placed the performers on voluntary quarantine, and tested them twice. AIM further determined that 33 performers had had contact with the 14 first generation actresses and actor. These second generation talents were also placed in voluntary quarantine and were asked not to work until the first generation had been cleared. 

Three actresses did test positive and their quarantine periods were lengthened from 30 to 60 days. Only one performer broke the quarantine, and after 30 days, performers began to be cleared. 

In addition to the quarantine, for the first time in adult film history, the largest companies stopped production, voluntarily calling for a moratorium. And, the porn world's biggest star, Jenna Jameson, created the Adult Industry Assistance Fund to help those financially impacted by the moratorium. 

Because of this self-policing carried out by these various groups in the adult film industry, Darren James infected only three performers with HIV and there have been no reported infections from working with James. 

Professor Padilla's work again illustrates that economic incentives and self-interest work and government intervention is not needed. LW