B. How the Criminalization of Second-Order Crimes Perfects First-Order Criminal Markets
If second-order crimes can engender inefficiency and weakness in first-order criminal markets, it is not surprising that efforts to suppress second-order crimes can inadvertently bolster those first-order criminal markets. Indeed, it seems likely that policymakers “perfect” first-order criminal markets across a broad spectrum of illegal activity. From prostitution to drug markets to back-alley abortions, second-order crimes create problems for first-order criminal markets. By criminalizing related activities, policymakers inadvertently resolve information asymmetries, strengthen competition, and eliminate costs that hinder first-order criminal markets.
Lawmakers may rationally criminalize the sale of fake drugs to deter the violence that results when dealers defraud their customers. However, in doing so, they also reduce the asymmetry of information between dealers and buyers that weakens the genuine illicit drug market. Counterfeit prescription drugs offer a related example. While they represent a very real health threat, laws that enhance the penalties for serious injuries or deaths resulting from trafficking in counterfeit goods actually increase buyers' confidence that the counterfeit drugs they purchase will not harm them.
Sometimes second-order criminalization can correct multiple first-order market problems. With the exception of some counties in Nevada, prostitution is a crime everywhere in the United States. Among the many problems associated with prostitution is the concern that “sex work” contributes to the spread of HIV/AIDS. Notably, the criminalization of prostitution is a good example of how first-order crimes can create second-order problems by deregulating a market. By driving underground an industry that might otherwise have been regulated to prevent the spread of communicable disease, the criminalization of prostitution created a secondary problem--the spread of HIV/AIDS through illegal sex work. True to form, legislatures across the country have responded to this secondary problem with new statutes criminalizing prostitution with the knowledge that the defendant was aware that he or she had tested positive for HIV.
As discussed below, one might question whether the second-order crime, “HIV-aware prostitution,” actually deters HIV-positive individuals from engaging in prostitution. To the degree that the statute either has such an impact or is perceived as having such an impact, it decreases the apparent danger (that is, lowers the costs) of utilizing the services of a prostitute. Moreover, by harshly penalizing HIV-aware prostitution, legislatures may be eliminating an asymmetry of information between “johns” and prostitutes that might impede an “efficient” exchange of money for services.
The complex and tragic context in which an HIV-positive sex worker sells her services is wholly different from the used car salesman who hawks low quality automobiles. However, just as car buyers might fear that they are purchasing “lemons,” so too might johns be concerned that they are purchasing sex from infected prostitutes. By raising the stakes of engaging in HIV-positive prostitution, the HIV-aware prostitution statutes decrease buyers' concerns that prostitutes are hiding their HIV-positive condition.
That HIV-aware prostitution statutes may be perfecting the first-order market for prostitution is all the more troubling if these laws do not actually decrease the incidence of HIV-infected individuals engaging in prostitution. First, there is the possibility that the statutes will deter prostitutes from getting tested. Second, and perhaps more likely given the context in which many prostitutes are making the decision to enter into the sex trade, few HIV-positive sex workers may be deterred from engaging in prostitution by the increase in penalties associated with the statute. If clients incorrectly believe that the HIV-positive statutes are effective, it is possible that the statutes will improve the first-order prostitution market without actually lowering the risk of contracting HIV.
Like the prostitution example, laws enhancing penalties for illegal abortions that result in the death of the mother may actually improve the market for the first-order crime of providing illegal abortions. While Roe v. Wade and its progeny held that a woman's right to an abortion is protected in the first two trimesters, some abortion services can still be Forty-one states criminalize abortions after a certain point in the pregnancy. Nearly forty states criminalize abortions performed by someone other than a doctor. A variety of factors may contribute to a woman's decision to pursue an illegal abortion. The pregnancy may simply have progressed to the point beyond which abortion has been criminalized. Young women required to notify their parents that they plan to terminate their pregnancy may instead seek to obtain one on the black market. Financial pressure may also contribute to the decision to seek an illegal abortion. While the nature of illegal markets tends to make data imprecise, one study has suggested that states that restricted funding for abortion services experienced a significant rise in the number of illegal abortions.
The substantial health risks associated with illegally terminating a pregnancy likely act as a significant deterrent to pursuing a black-market abortion: Individuals providing illegal abortion services are likely to have inferior medical training; the procedures are likely to be performed in unsanitary conditions; and there tend to be fewer opportunities for follow-up care. The provision of black market abortions is not only illegal, it can also be hazardous to the mother's health. The criminalization of abortions thus leads to a second-order crime--deaths resulting from illegal abortions.
Eight states have laws that enhance the penalties for criminal abortions that result in the death of the woman. Under Florida law, the unlawful termination of a pregnancy in the third trimester is classified as a third-degree felony. An unlawful termination is a second-degree felony, however, if it results in the death of the patient. By increasing the penalty for performing an illegal abortion in which the patient dies, the law is designed to encourage illegal abortion providers to take greater safety precautions. However, just as the HIV-aware prostitution statutes reduce the perceived risk of engaging the services of a prostitute, so too do the penalty enhancements for abortions resulting in death improve the market for illegal abortions. That the penalty enhancements help to perfect the market for illegal abortions does not necessarily suggest that they are inappropriate. Rather, it serves as a reminder of how complex and difficult the criminalization of related crimes can be.
The criminalization of second-order crimes can even resolve collective action problems that create inefficiencies in first-order criminal markets. As discussed above, a drug dealer's decision to arm himself may represent his response to a classic prisoner's dilemma--there are significant benefits to arming oneself when others go unprotected, and significant dangers to encountering someone else with a gun while one is unarmed. As a result, every dealer goes armed despite preferring a market in which no one carries a gun. Moreover, the prevalence of guns (and thus gun violence) likely increases the cost of participating in illegal drug markets, thereby reducing both the supply and demand for drugs.
In 1986, Congress added an important new weapon against narcotics traffickers by mandating a minimum five-year sentence for using or carrying a firearm during or in relation to a drug trafficking crime. The decision to enhance the penalty for armed drug trafficking as opposed to drug dealing in general suggests that the goal of the statute was to deter gun violence as opposed to simply providing another weapon for the war on drugs. Ironically, it is conceivable that the act was welcomed by drug dealers. By raising the cost of carrying a firearm during a narcotics transaction, Congress may have helped resolve dealers' prisoner's dilemma and promoted the kind of cooperation that lowers the cost of engaging in illegal drug activity.
