The editorial in today’s “Australian newspaper”:http://www.theaustralian.news.com.au/common/story_page/0,5744,10961023^7583,00.html is as sonorous as the rest of the media—but less shrill than many—in suggesting some obvious answers: bigger penalties, global law-enforcement cooperationand censorship of information flows via the Internet bq. The supply obviously exists to meet a ready local demand that must be dealt with. While possessing child pornography is illegal in all states, the penalties range from a mere 12 months to five years in prison … But there will always be people so self-obsessed they place their own desires above all else and who keep on searching for new sources of pornography … The challenge for Australian police is to co-operate with overseas forces to hunt down the online pornographers. At home they must work with the willing, or if necessary coerced, help of internet service providers, to block local access to overseas sites. The main concern following the “police operations”:http://www.thecouriermail.news.com.au/common/story_page/0,5936,10934241%255E953,00.html of last week, as the newspaper recognizes, is not whether possessing images indicates a habit of actual exploitation of children or even the surprising apparent volume of demand. The chief public policy question is: how to control supply. Every image indicates that someone, somewhere, is being rewarded for exploiting a child in very harmful ways. We know from experience of trade embargoes and bans to protect endangered species, for example, that prohibitions and barriers to demand such as internet censorship and the siezure of imported materials work only in particular circumstances. It is not clear that those required conditions exist in the case of the supply and demand for pornography that exploits children. Prohibitions and trade (or information-flow) barriers may depress demand, but they are unlikely to eliminate it; particularly demand that persists despite a social stigma as strong as that attached to the use of child pornography. Worse, such bans are unlikley to cut supply that has a criminal origin. The siezures of the images and the creation of stronger access barriers are more likely to lead to a hike in prices for the images, greater reward for the criminals who create it, and ever-more-covert supply chains. International police cooperation may have some value, but direct coercive action didn’t stop the Mafia (tax and imigration prosecutions were more effective). It seems “unlikely”:http://eng.globalaffairs.ru/region-globalization/numbers/7/524.html that it will stop the “Russian mafia”:http://en.wikipedia.org/wiki/Russian_Mafia who are the alleged source of some of the material found in Australia last week. Meanwhile, the bans and policing measures designed to cut consumer access will be costly to manage and implement. They will introduce more intrusive and probably arbitrary censorship of information; they will increase policing and custodial costs; they will punish a sexual pathology without reducing or even ameliorating its impact on individuals or the society. If the demand for child pornography were narrowly-based and generally detectible—like ‘sex tourism’ or active paedophilia— then policing demand might provide an acceptible balance of cost and benefit. But the evidence of the recent police seizures doesn’t give much reason to think that the use of this material is either overt or restricted to marginal members of society. Economic theory says that the surest way to depress new supply is to drive down prices. In the case of some illict trades in endangered species or in drugs, this has led to limited legal sales of the illicit material frequently sourced from siezed stocks to deflate the rewards to suppliers. In an “excellent short paper(PDF file about 200k)”:www.rff.org/Documents/RFF-Resources-150-endangered.pdf on the difficulties in designing effective embargoes, Carolyn Fisher of the respected Resources for the Future organization notes, however, that specific details of the supply-demand relationship make a crucial difference to the success of a ban in affecting supply: bq. “Appropriate trade and enforcement policy for endangered species products thus requires a reasonable sense of the demand and supply parameters. For example, if lawful demand for rhino horn is low and most consumers are indifferent to certification [of legal supply], the trade ban is likely to be ineffectual in reducing demand, and selling confiscated products would bring down prices, primarily by increasing supply to consumers indifferent to the law. But if ivory is in demand by lawabiding consumers sensitive to the stigma, sales of some but perhaps not all the available stock may help reduce the return to poaching.” Fisher’s brief and accessible paper is well worth reading. I certainly would not suggest an analogous supply of child-pornography from current siezures. It would be repulsive for any government to sanction supply of this material, particularly for the sake of saturating a market. But the question of whether there are effective means of depressing supply deserves more careful attention since it seems from the recent arrests in Australia that we are looking at a market that is more like the second alternative posed in Fisher’s example just quoted: where otherwise lawabiding citizens who would be sensitive to the stigma of being identified as a consumer of child pornograpy nevertheless maintained their demand. What supply-side options might there be? The most difficult, but most effective means would be to deny the producers access to inputs: that is, to children. This means addressing the same issues that drive the supply of child-prostitutes and child-soldiers, for that matter, in many poor countries: chiefly, poverty and disease epidemics (AIDS) that leave millions of children orphaned each year. But this is a long-term project. In the short term, supply-side measures with any hope of success might have to focus on vulnerable parts of the supply chain nearer to the source of production such as the producers’ access to internet communications and websites. I don’t have detailed solutions for the reasons that emerge from Fisher’s broad conclusion: it is impossible to shut-down an illicit trade without specific market knowledge. But it is clear to me that we will not seriously attack the central public policy target of child-pornograpy—supply of this repulsive material—by continuing to rely on the social stigma, that has already proved ineffective, or by the use of bans or barriers because the supply of these materials seems likely resist even the most costly prohibition and surveillance measures. The experience of trade embargoes and prohibitions suggests that more data on the market is needed and some combination of demand and longer-term supply control approaches to address the root problem—the vile exploitation of children by the suppliers of the materials—in an effective and cost-beneficial way. fn1. Consider the ressurgence of demand for animal furs, until recently the target of widespread stigma.
Peter Gallagher is student of piano and photography. He was formerly a senior trade official of the Australian government. For some years after leaving government, he consulted to international organizations, governments and business groups on trade and public policy.
He teaches graduate classes at the University of Adelaide on trade research methods and the role of firms in trade and growth and tweets trade (and other) stuff from @pwgallagher