The allure of contraband

For the Singapore government, the issue of contraband existing in Singapore is a tough problem to solve. Despite the country's valiant attempts at solving this issue, contraband and the illegal black market cartels operating them appear to be almost impossible to extinguish. Why is it that such cartels, continue to exist despite the incrementally harsh penalties set by the State? It's almost as if transacting such "dangerous" commodities held some magical allure for the perpetrators in question – the more effective the state's hold on stopping such contraband, the more enticing it is to go into the field. When confronted with  a difficult socio-political issue, most Singaporeans almost instinctively clamour for the government to intervene. The well-meaning state, with all its advances to protect the citizens from these "dangerous" commodities, have traditionally adopted the option of either:

• Increasing the taxes on such commodities i.e. vice taxes(such as on alcohol, or on cigarettes) or
• Banning the material entirely

If you would think of such a claim as a misrepresentation, the recent spate of accidents involving e-scooters and of the responses it elicited demonstrate this belief in action. The prolific nature of such incidents has prompted moderate Singaporeans and politicians alike to call for regulation pertaining to these vehicles. The more extreme holders of these views are the ones who ask for the total banning of such vehicles - all in the name of public safety. Or take for instance the Worker Party's insistence for the government to "reject" online betting applications, under the concern of public welfare. In their view, addictive behaviour and easy access to casino gaming is a slippery slope to financial ruin. But would banning something or artificially increasing its price actually lead to lesser usage? What actually happens when the government intervenes, and acts to forcefully limit these commodities or services? Artificial Price Increase Suppose if the government acted to impose a tax on the prices of carrots tomorrow morning; This artificial price increase would create a new demand for cheaper carrots, and would create a strong financial incentive for people to smuggle in un-taxed carrots, often to undercut the legal carrot sellers (who are forced to charge artificially high prices, because of this "carrot tax"). Whatever motives the "carrot tax" was meant to accomplish, it would have had the unintended consequences of creating a black market in carrots. The government is practically creating economic incentives for people to break the law. In the case of alcohol and cigarettes, these black markets lead to other problems. For example, while legal sellers would not sell to minors for fear of bad reputation or losing their license, black market sellers have no qualms about such nitty-gritty details. The intent of such "vice" taxes are often portrayed to discourage consumption of these substances - to help addicts reduce their consumption of such commodities, and hopefully quit their addiction. Since these taxes also significantly increase the prices of alcohol and cigarettes; addicts are hence not merely exposed to the harmful effects of these substances, they're getting impoverished by these taxes as well. Poverty usually makes it much harder for someone to quit an addiction (e.g. less money and less time to seek rehab). The vice taxes often end up achieving the opposite effects of their intentions; poverty-stricken people are statistically much more likely to be driven to gamble in order to get money to feed their addiction to such vices. They may be driven to commit crimes in order to get the money they need.