Barriers To Entry

Free condoms and information at an HIV testing site in June in New York City

Photo by Mario Tama/Getty Images.

It?s an old American tradition to ban sinful commerce in the name of morality. And despite our rhetoric about free trade, America has also often passed laws to insulate favored industries from international competition. But these two kinds of legislation often amount to the same thing, often with surprising results. Consider the case of the condom. ?

Until the 1850s, virtually all condoms were made from animal intestines and imported from Europe. They cost as much as $1, making them unaffordable to most Americans. India Rubber World, an American trade journal, reported that condoms were regularly imported in discreet packets to evade customs officials.

Condom production was revolutionized in midcentury through the vulcanization of rubber, which made rubber resistant to melting and cracking. Skin condoms remained popular, but the rubber revolution increased supplies, heightened competition, and drove down prices. By the early 1860s, a condom cost as little as a dime. George Bernard Shaw called the rubber condom ?the greatest invention of the 19th century.?

In March 1873, Congress passed the Act for the Suppression of Trade in, and Circulation of, Obscene Literature and Articles of Immoral Use. The new law came to be known as the Comstock Act, named after anti-vice crusader Anthony Comstock. Having aggressively lobbied for a more expansive anti-obscenity law, Comstock was then given the job of enforcing it. Like today?s drug enforcement agents, he and his collaborators orchestrated ?buy and bust? sting operations (with Comstock often posing as a would-be customer) and kept detailed tallies of their arrests, convictions, and seizures. By the end of Comstock?s four-decades-long mission, he had confiscated 50 tons of books and 4 million pictures and had made some 4,000 arrests.

Far from eradicating the illicit smut trade, Comstock?s crusade transformed it. The trade moved out of New York and spread across the country. Pornographers created aliases and false addresses. Some even posed as religious publishers. They also shifted to more portable and lightweight products?away from bulky books and toward more concealable items such as photographs and playing cards. As it became more dangerous to use U.S. mail, traders turned to private express companies. Comstock?s targeting of established publishers also created openings for new market entrants attracted by the high profits of the trade.

The Comstock Act extended the definition of obscenity to include all devices and information related to contraception or abortion. Imports were prohibited. But as with pornography, the import ban on contraceptives did more to stimulate domestic production than curb supply. The price of a rubber condom in 1887 was still 10 times less than the price of the animal-skin equivalent a few decades earlier.

The main effect of prohibition was to drive the birth-control business underground. Before the Comstock law, condoms were advertised in the New York Times. A typical ad offered ?protectors against disease and accident.? After the Comstock law, advertisers adjusted their language, emphasizing hygiene (such as ?sanitary sponges for ladies?) rather than anti-pregnancy uses. Inventors continued to apply for patents for birth-control devices but without labeling them contraceptives. Texas inventor Uberto Ezell applied for a patent in 1904 for a rubber ?male pouch,? described as a device to ?catch and retain all discharges? from the ?male member.? The patent was approved in 1906.

Comstock?s crusade was selective, typically targeting lower-class immigrants while turning a blind eye to the rich and respectable. This included Samuel Colgate, the president of the New York Society for the Suppression of Vice, whose New Jersey soap company was the exclusive manufacturer of Vaseline?a petroleum jelly advertised as a sperm killer. Other major companies, including Goodyear, Goodrich, and Sears Roebuck and Co., advertised contraceptives without attracting the ire of Comstock and his anti-vice agents, partly because birth control was never more than a marginal part of their commercial profile. By inhibiting larger firms from making contraceptives a core part of their business, the prohibitionist climate created space for smaller players to participate in the riskier and more criminalized business of mass distribution.

At the high end of the contraband condom business, the best and most reliable products continued to be shipped in from Europe. But the mass-produced stuff was increasingly domestic. Clandestine condom production, both rubber and skin, required minimal startup costs. The product was highly portable, profitable, concealable, and in great demand?an ideal commodity in a dispersed black market. Criminalization democratized the market and created a profitable niche for small-time entrepreneurs?many of them immigrants?who were otherwise relegated to the margins of society. For those willing to take the risks, commerce in contraband contraceptives offered few barriers to entry and provided an alternative avenue of upward mobility.

Julius Schmidt, a young Jewish immigrant from Germany, started out making animal-intestine condoms on the side while working at a meat-processing plant in New York. Harassed, arrested, and fined by Comstock, Schmidt nevertheless managed to build up an underground condom business. On the 1890 census, he listed ?cap manufacturer? as his occupation. Decades later, he changed his last name to Schmid and became the top condom supplier to the U.S. armed forces during World War II.

Source: http://feeds.slate.com/click.phdo?i=852e11bd2e6f95e6999e13476c8a3a46

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