Legalizing Sex

Ireland has announced plans that during their turn in the EU Presidency they plan to introduce a measure to ban paying for sex throughout the EU. Specifically, one of the proposals would remove some of the various porn groups, like Swedish-based Private Media Group, from the EU stock exchanges.

I have no problem with trying to restrict obscene emails. I'm even ok with restricting prostitution in the EU (although I have much stronger philosophical issues with that). But for the government to come in and deliberately order the delisting of a company is over the line.

When an investor is researching an international stock for possible inclusion into a portfolio they examine two seperate categories of risk: company and country. The company risk is the normal risk that we associate with every company, i.e.: are they making money? Do they have good management? etc....

Country risk, on the other hand, takes into account governmental interference in the capitalist market. In other words if a nation is prone to nationalization or arbitrary delisting of unpopular industries for political purposes then it will eventually lead to a higher cost of capital for all companies engaged in any business in that particular nation. With the global economy becoming more and more interconnected, this seemingly industry specific assault will have much broader, unintended consequences.

If the EU truly wants to rid itself of the porn industry (which I'm not sure is a good move. Yes, it is undesirable and distasteful, but it also employs a large number of people and has a massive customer base. Say what you will about it, but the purchasers of porn are legion.) then they need to start by outlawing the content, not the company. If a company like Private Media can survive under the new laws of legality, then so be it - give them credit for adaptabilty. If not, they'll wither away on their own without the worst consequences of government interference in the market.

I don't think it's right to try to legislate morality, but if the EU wants to try, more power to them. Better for them to try than for us to experiment.

I just hope that they don't really screw it up and accidently invoke the laws of unintended consequences.