From a brief scan across all the proposals and demands from the industry one gets a feeling that government is out to dis-incentivise their particular industry and government is doing a damn good job of this. But look at prostitution, the world's oldest business. Many a government has tried to ban prostitution (dis-incentivising of course) to no avail. The worst affected by the ban were the prostitutes. They were exploited by various people starting from pimps to law enforcement agencies. And still there is no end to prostitution. Hence many governments have taken steps to legalise the system. Can then the government learn from its exceptional good job in other industries and use it where it matters most?
The Horns of the Devil!
If we observe this business we understand that there are three core players, prostitutes, pimps and customers. Prostitutes are the exploited ones, they are there (in most cases) because they do not have alternatives, they are helpless. The pimps are middlemen. But most critical element are the customers! At least in India they always try and catch and prosecute the "prostitutes" but customers are often let free. It the customers you have to catch if you want to eliminate prostitution!!
How do you do it?
The first way government can di-incentivise this trade is by taxing it! Simply take the details of the customers and put an additional 10% tax liability on these people. Or if I were Finance Minister I would call it a cess and channel the money into health care for these sections.
Second deals with the way British enforced law in India during their occupation. They used two major weapons. No it wasn't the baton or gun, it was information and social pressure. Lets say, if government were to take a photo and details of every person who is caught with a prostitute and publish the same on some website. Or track connected near ones like office, friends, home and supply this information across these places. Will social stigma not cause the customers' to vanish?
The Dance Bar Phenomeon
Mumbai now has another issues and its Dance Bars which government was trying to ban. The Mumbai High Court recent allowed these dance bars to operate. Using our earlier logic we can work on an effective solution to the Dance Bar problem.
First way is to simply get details of people who come to dance bars, the amounts they spend and share this information with income tax. Or simply make entry in the bar subject to swiping / scanning of PAN card! (India's equi-valent of social security number for tax purposes)
Second again will be to share the details with the friends and near ones along with details being publicly posted on some common website. Regulars should be tracked and traced across dance bars.
Basic economic sense can be used to contain a lot of industries, often these techniques are used on legitimate industries in era of control. Same techniques may be deployed where it actually matters. What Say??