April 20, 2005
The recent ban on all dance bars in Maharashtra has generated massive flak. The alleged reason for the move rests on the “noble” cause of preventing the moral degradation of the public and the reduction of corruption and crime. This, at least, is what Maharashtra Home Minister R.R. Patil avers.
The furore started in early September last year, with frequent raids on dance bars in Mumbai. In an earlier article (‘Liberty Does Not Bar’, IE, Sept 15), I had criticised these raids, arguing that it is not possible to enforce morality through prohibitionist policies. Time now to re-visit the issue.
From an economic standpoint, a ban of this kind is tantamount to economic suicide. The loss of revenue from the closure of dance bars will put further strain on the state’s already strained coffers. From a moral standpoint, the decision may prove to be regressive as these unfortunate girls, losing their only source of income, may well turn to prostitution for survival.
Some argue that most of these dance bars are owned by corrupt politicians and policemen, so there is no question of revenue generation for the state. Their income only circulate as black money. Some believe this is indeed the primary reason why Patil has taken such an aggressive stance. If this is indeed true, are there any ways to help make the operations of all dance bars legal, while ensuring that corruption and crime do not rise?
Let us first ask the question, why did such a huge number of illegal dance bars surface? Simply because nightlife is banned in India. Why is nightlife banned? Because India’s socialist state does not believe in the principles of economic freedom and property rights. As a welfare state, it assumes a patriarchal role in deciding what is good for its citizens and what is not. Over the years, history has proved that prohibition policies often backfire — aggravating the problem it is trying to reduce.
How, then, should the issue be tackled? First and foremost, nightlife should be legalised. This will disincentivise the running of a parallel black market. But what about the existing illegal dance bars? Well, the government can either employ “voluntary disclosure schemes” or, even better, auction such properties to prospective owners who want to run them legally. Once this is done, dance bars will be operated on the principles of the market economy. In their own interest, owners will try to keep the reputation of their business untarnished. The second solution is to go a step further and list such night joints on the stock exchange, the performance of each of them will be reflected in the movement in their stock prices. A shady joint will fetch a very low stock price, which will put off potential customers.
Such liberal policies based on the principles of market economy can provide a much better solution to the problem in hand rather than a policy of bans.
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