FROM START UP TO PIMPING:
The neo-liberalisation of the sex industry
By Francine Sporenda
In this text, my goal has been to analyze how the neo-liberal strategies and methods of management have been used by the sex industry to turn prostitution into a modern and thriving business—a real industry with big scale international operations supported by cutting edge technology.
Among the neo-liberal strategies used to destroy the power of workers and unions to resist capitalism at the national scale, the one which is probably the most obvious is globalization : exporting production to foreign countries with low labor costs, little or no welfare regulations and low taxes. And using migrant workers, often illegal, to work in sweatshops, agriculture and services for very low wages and without social protection in Western countries.
Anti-capitalist economists speak of the « Nouvelle Répartition internationale du travail » (New International Division of Labor). Countries which have been loaded with an exploding debt, following the huge increases in interest rates that were decided by the IMF and the World Bank in the 80s and 90s, have been forced to « privatize or die », to switch to a 100% market economy, and implement policies of « structural adjustment » if they were to obtain new loans from these institutions.
These policies deliberately created major economic crisis and as a result, a majority of the population plunged into poverty. In these countries, when faced with poverty and having to work to feed their families, most women have 3 options : domestic worker, prostitute or surrogate mother. So neo-liberalism, the free market « ideological project » of the Chicago School of Economy, developped by Milton Friedman, Hayek etc, not only considerably aggravated women’s poverty in many countries-- (in the world, about 70% of the people living below the poverty line are women) , but then –double whammy—one of the few solutions it offers women to survive is to be sold to punters
In some Western countries, the policies of austerity imposed by the European Union following similar explosive debt situations had similar results : an increase in poverty, welfare expenses cut back, public services privatized etc. These consequences were dire for women : a number of them had to turn to prostitution as well. In Greece, at the worst of the crisis, between 2011 and 2013, prostitution increased by 150% and many women left the country to work abroad in brothels or as domestic workers.
PROSTITUTION, A MIGRANT WORKERS’ « JOB »
The consequence is that, now in Western European countries, prostitution is a job performed essentially by foreign women coming from poor countries. Manu Schon, a well known German abolitionnist, says that at least 90% of the women prostituted in Germany are foreign (in « Vers la monopolisation des industries du sexe »). She quotes the case of a police raid on the brothels in Augsburg (Austria) : not a single German speaking woman was found.
In Germany, it’s mostly women coming from Romania (often from the Rom community) and from the Turkish minority in Bulgaria, but there are also women from Nigeria, Thailand, Corea, China etc. The strategy of the sex industry is to flood the « market » with migrant women, and this massive import of women from poor countries increases competition and lowers prices drastically : if the cost for ½ hour with a prostituted woman in a Paradise brothel is at least 50/60 Euros, downtown it costs only 20 Euros for oral and vaginal sex. This pressure on the prices is such that prostituted women can’t refuse having sex without protection. Some women working in the street even accept unprotected sex in return for a Big Mac.
Foreign women are turned into consumer goods, merchandise exploited by a sex industry that extracts tremendous capital gains—with very little investment—from their exploitation. The Third World—as underlined by Sylvia Federici—is a huge reservoir of ressources for Western countries : not just energy and raw materials but cheap human labor, and a huge transfer of wealth is thus organized between the South and the North. Foreign migrant women in prostitution, and as domestic workers, represent huge profits for Western capitalists. An important part of what was considered « women’s work »--cleaning house, taking care of children, sexual services to men on demand—is now performed by these migrant women.
In addition to offering sexual services at bargain prices, and being more easily controlled in a country where they know no one and can’t speak the langage, it has been noted that « exotic » women are also especially appreciated by sex buyers because they offer to white men a return to a position of maximum power over women, the one of the allmighty colonizer over the « wild », « hot » « coloured » women. One anti-prostitution advocate spoke of « un imaginaire pornographique colonial » (pornographic colonial fantasies). So, racism is as central to prostitution as sexism.
INTERNATIONAL TRAFFICKING NETWORKS
Globalization is foundational to neo-liberalism, and this globalized aspect is now present at all levels of the sex trade. The migrant women working in prostitution don’t leave their country and move to a foreign city all by themselves, they must be recruited, groomed, and « shipped ». The trafficking of women and children for prostitution from one country to another is organized by international networks sprouting like mushrooms in the country of origin of these women and spreading their tentacles in countries all over Europe, and further. Whether they are recruited by these networks by the promise of good jobs or by the classic seduction by a Romeo, these women are recruited and delivered to faraway brothels by these international networks’s and their local associates. Helmut Sporer, chief police in Augsburg, says that women from Bulgaria, Romania or Hungary can be ordered on catalogues, where they are classified by physical characteristics and there is even a return policy if the brothel manager is not satisfied. When women from Thailand or South Korea arrive to Spanish brothels at La Jonquera, the brothel managers pretend that these women are independent workers and that they found their way to their brothels without any help, but of course it’s bogus.
The globalized aspect is more obvious in the most modern form of prostitution, the one which represents now about 70% of all prostitution in Western countries : « online brothels », these sites which publish thousands of advertisements for prostituted women mostly posted by trafficking networks. Governments and justice are now cracking down –somewhat-- on these sites, and some of them were recently shut down –like Backpage in the US which was recently seized by the FBI and the IRS—but many of these sites still exist, and these very profitable enterprises are managed along the line of typical start up companies’ strategies.
Some basic info about these online brothels like Craigs list, Backpage and Vivastreet : the ads they offer (or offered) in « adult pages» are almost entirely prostitution ads.These ads are not free, and very profitable : the monthly fee of a basic advertisement in Vivastreet was 80 Euros; but of course, if a prostituted woman wanted an ad that would stand out and attract lots of punters, she would have to pay for upgrades, more so in an area where the competition is steep, like the Paris area : an ad could cost an average of 200/280 Euros per month, in some cases it could go up to 500 Euros. A number of women in prostitution were complaining that Vivastreet was making huge profits on their back.
In 2017, just before it gave up it’s « Erotica » section following a lawsuit for « proxénétisme aggravé » launched by the French abolitionist association Le Nid, Vivastreet had sites in 13 countries: France, the UK, Brazil, Belgium, Italy, Chile, India etc. It was planning to expand its international activities to Spain and Portugal in 2017, and Central and South America, Switzerland and the Netherlands in 2018. In France, there was upto 7 000 prostitution ads published each month on the site, and the advertisements for sexual services represented about 50% of their turnover.
Vivastreet is owned by a company called W3 Ltd, this company is incorporated in Jersey, and 90% of the shares are owned by a company named ELCAN Nominees Ltd, which has been mentioned in the Panama Papers scandal ; there are several « sister companies » linked to Vivastreet, like WebDM UK, DM Services, Digital Ventures Holding, IVI Ltd, but all these companies seem to be shell companies. Behind this line up of shell companies is the creator of Vivastreet, Yannick Pons, who is listed in the 500 wealthiest people in France. He is French, but his companies are registered at different foreign locations, like London and Jersey, and for a while he lived and worked in the US. It’s a very complicated, opaque organization. Recently, the company W3 has even started an investment fund to « support start up companies ».
Backpage, which was finally recently shut down completely, is a Dutch owned company, a limited liability corporation incorporated in Delaware but its main place of business was in Dallas, Texas, while the server was in Arizona.
Let’s take the example of two other sites hosting prostitution ads, with a langage way more explicit than Vivastreet (the fees are quoted, as well as the sexual acts available) : 6annonce and sexemodel. One of these sites is Russian, the other one is Czech. They are registered in Cyprus, and the web host companies are in Switzerland and in Panama.
All these brothels online are extensively globalized, and their different activities deliberately scattered in different faraway locations. Very often they are incorporated in tax heavens, so as to pay very low taxes, the web hosts are located in countries or states like Calfornia that have regulations that make it difficult to close down the sites. They are the visible end of a network of shell companies scattered all over the world to hide who is behind them who exactly owns these sites ; this opaque organization complicates considerably the work of the police if they wish to investigate them. Globalization is used very cleverly by these companies to avoid close scrutiny of their shady activities—and paying taxes.
These sites make lots of money. The turnover of Backpage was 135 million $ in 2014, and 90% of this figure came from so-called « adult ads. » (this according to the California Department of Justice »). They made half a billion profit since 2004.
On these sites, there are lots of trafficked women, and very few independent prostitutes. Independents are usually older and seem to be a vanishing breed. Any time an independent woman in prostitution advertises on one of those sites, she is immediately called, harassed and threatened by traffickers, who demand their cut and want to control her. Just like these sites are very mobile and international, the prostituted women are also dispatched from place to place by the traffickers : the « sex tours » represented about ¼ of the prostitution ads on Vivastreet. A member of an abolitionnist organization explains the rationale for these sex tours : women in prostitution are a product, and this product is seen as having more value if it is new. So a way to create novelty is to move the same woman from city to city. This way, each time she arrives in a new town, she is new in this area, and her value is higher, because johns either want to buy very young women, or new women, « fresh meat » so to speak : the principle of « city tours » is to promote –through internet--—a prostituted woman—for instance a Russian prostitute- who is going to be moved from city to city by a network. Her arrival dates will be specified for each city, on punters’s forums in particular. These women will spend 3/4 days in each new location, receiving johns in rented hotel rooms or rented apartments. Punters can make reservations online for a Russian prostitute and for specific sex acts. When the woman is in town, they receive a message on their cell phone specifying the location of the meeting--at the last minute of course. The traffickers who organize these tex tours keep the johns interested by providing new « products » constantly. And Vivastreet has even responded to the specific advertising needs of the organizers of these sex tours by offering them ads with the option of « unlimited change of location ».
Among these trafficked persons, quite a few are minors. There have been several suits launched by parents or ex-prostituted children against these sites for having aided and abetted their being sold for sex on these sites by traffickers. A girl sold on Backpage was forced to perform sex acts at gun point and was repeatedly gang raped, so violently that she had seizures. The ads for minors use a coded language—like the obvious « Lolita » or « daddy’s candy », or the less obvious « new in town », « looking for someone to hang out with », or « 100% young ». The National Center for Missing and Exploited children say that 74% of all the cases they had to deal with recently were advertised on Backpage. A study has shown that 35% of the children trafficked on this site were black, whereas the percentage of African-Americans in the county where the study took place is only 7%--minorities are specially targeted by traffickers. This study done from 2013 to 2015 in King County (Washington) states that 79% of the men who pay to rape children are white married educated men. There were so many crimes perpetrated and so many minors sold through Backpage advertisements that it has been called « a sort of digital incubator for local crime ». In France, the association « Agir contre la prostitution des enfants » says likewise that out of roughly 20 cases of child prostitution they were involved in, 18 were advertised on Vivastreet.
Needless to say, the money thus earned is laundered in foreign banks, foreign investments and tax heavens. Nearly all the founders of these sites, besides being investigated for advertising the prostitution of minors, were investigated also for money laundering and tax fraud. As one can see, the lessons of neo-liberalism on the strategic use of globalization for maximum profit and maximum impunity have been perfectly learned by the sex industry.
Another characteristic of neo-liberal management which these online brothels implement is streamlining and the « hollow company » scheme, what Naomi Klein calls the « Nike management model » : a small core of competency workers, and lots of temps. These companies which generate huge profits are very lean, they are run with very few permanent employees. The headquarter staff is on average about 30/40 people, completed by a few temps in the different countries where those sites are present. Jim Buckmaster, the CEO of Craigslist which closed its adult ads section a few years ago, is a computer programer based in San Francisco, who comes from the counterculture –he has been presented as anti-capitalist and likes to mention he is an admirer of Noam Chomsky. He runs à company that has 700 sites in 70 countries (20 sites in the United Kingdom), 65 million single visitors each month, is valued at 1 billion $ and was qualified by sheriff Tom Dart (of Cook County, Illimois) as « the largest source of prostitution » in the world. But only 32 people work permanently for Craigslist at its San Francisco headquarters. Jim Buckmaster cuts a new and interesting figure : the radical leftist pimp.
Vivastreet was also launched as a start up company by a young Frenchman, Yannick Pons, who moved to New York to get closer to the American start up culture he admired. His first site, Easyroomate, was geared to finding roomates, then he expanded it to a general advertisement site. As I said, it just closed its « Erotica » section in June 2018 --but only for the French site--, which caused a huge drop of trafic : from 11 million single visitors to just 4. This shows how it’s the prostitution ads that attract most of the visitors on these sites.
The CEO of Backpage, Carl Ferrer, has finally relented and agreed to spill the beans, to testify against his associates, Michael Lacey and James Larkin in order to save his hide. In particular he revealed how they rewrote the ads that were clearly advertising sexual services so as to make them less explicit and give the managers a « veneer of deniability », in a nutshell, they drafted the wording of the ads so the managers could deny plausibly that they knew they were advertising the sale of trafficked women and minors—and so did Vivastreet--clearly, on those sites, the moderation is purely for legal protection. Like Jim Buckmaster of Craigslist, these men come from the counterculture : Lacey and Larkin were former owners of city papers like the « Village Voice » and «New Times » that advocated a philosophy of community spirit and free services, with sections like « Musicians » (for musicians who wanted to find bands) and « New Age ».
It’s interesting to note how all these men went smoothly from hippie philosophy, to start up entrepreneurship, to pimping and aiding and abetting all sort of crimes. Both Craigslist and Backpage have not only been linked to the trafficking of minors for prostitution, a number of women –including prostituted women--were also murdered by men they met through ads on these sites. Backpage was indicted by the FBI on 93 counts, and Carl Ferrer pleaded guilty in state courts in Arizona and Texas of the charges of « money laundering and conspiracy to facilitate prostitution, hosting child trafficking ads », and « assisting advisers in wording their copy so they didn’t say overtly that sex was for sale ». These men have been jailed, but the CEO has been freed on bond ; however, they received huge fines, in particular 500 000 $ for money laundering.
UBERIZATION OF THE SEX INDUSTRY
In the neo-liberal economy, there is no lasting committment, no more long term contracts. A perfect example of this is Amazon—where the average duration of employment is about a year. This is also the case in the sex industry. At least on paper. The modern prostituted woman working in brothels is now supposed to be an independant worker, a service provider who has with the brothel and its manager a professional relationship which is presented as similar to the one an Uber driver has with Uber. No commitment, the worker can leave his employer when he wants, the employer can stop employing the worker when he wants. The worker can decide when, where and how long he wants to work. The Uber driver registers on the Uber platform to get the services Uber provides him, for which he pays a 20% commission. Uber puts the driver in touch with the client and takes care of a number of material details, so the employee can focus on the service provided
THE MYTH OF THE INDEPENDENT WORKER
Likewise, German brothel owners like to present themselves as service providers : their job is to put the prostituted woman in touch with punters and provide the place for their meeting. According to them, the prostituted woman pays « à la carte », only for the brothel services that she uses : renting a room (100/180 Euros per day, up to 4 800 Euros per month), paying the brothel for puting out advertising—and different added services that brothel owners are supplying : hairdresser, beauty parlor, sauna, manicure etc. The prostitution lobby insists it’s a no strings attached business arrangement : total flexibility, any party can walk out of the arrangement when it suits them. Of course, it’s the fraudulent image they want to give of their industry. In fact, this description of this « flexible » arrangement works mostly for the brothel owner ; if there is indeed an Uber type contract, it’s only in the extent that the prostituted women have no guarantees and no rights : women are often forced to work long shifts (usually 10 hours) without any break and usually cannot refuse a john or a sexual act. Some German survivors of prostitution mention that they had up to 40 punters per day. If they are non-compliant, they can be fined, or even sequestrated-- behind this glamorous image of the independent worker lies the archaïc violence of punters and pimps—compounded by the cold violence of neo-liberalism.
MERCHANDIZING OF BIOLOGICAL RESSOURCES
Another aspect of the sex industry which is straight out of the neo-liberal book is the systematic merchandiszing of biological ressources (« marchandisation du vivant »). In this approach, everything that is part of « nature » and used to be freely available must be appropriated by companies, made into a « product » and sold at a profit—to the very people who used to have it for free ! It’s about allowing the market to commodify everything. For the market to expand further and further, new ressources must be constantly found, absorbed, privatized and commodified for the machine to keep on rolling. Everybody knows that’s what happened to water, seeds (with Monsanto), organs, ovules, etc. When kidneys, or ovules are sold to well off buyers, it’s not just the work of the poor that neo-capitalism is exploiting, it’s their very bodies. Women seem to be the last frontier for this dynamic brand of capitalism. And new technologies allow to expand women bodies’ commodification indefinitely : surrogate motherhood, « rent a uterus », is going one step further in this direction.
In the sex industry, this progressive conquest of the biological to turn it into a sellable product has been achieved by pornography. Pornography has turned every inch, every function of the female body into a sellable product. In order to create pornographic videos, vaginas had to be penetrated in new different ways—by sex toys, by objects, fists, triple penetration, as well as other orifices. Pornography is driven by an unrelenting male obsession : invading the female body in every way possible. There are pornographic niches for every particularity of the female body : big breasts, small breasts, no pubic hair, lots of pubic hair, very young girls or old women, skinny or fat, even pregnancy is a niche which is very sought after, to the point that some prostituted women are forced to continually be pregnant --and abort, or put up the baby for adoption. The female body is like a foreign territory of which every inch must be colonized and exploited. And to keep the consumer interested, somethIng new has to be proposed constantly : new sexual acts, new sex toys, new women : the porn industry’s job is to create new and perfectly artificial « needs » in pornified men. This is another trend which is also typical of neo-capitalism : the goal of business is not just to provide products for the pre-existant needs and wants of individuals and society—but to be pro-active—and constantly create new needs and wants to sell new products.
And in order to satisfy these sexual « needs », pornified men must go to prostituted women—because few regular women will accept to perform disgusting or painful sexual acts : pornographers manufacture a « product »--sexual fantasies—and women in prostitution and pimps retail it. Thus pornography and prostitution are complementary--pornography sends men to prostitution, and prostitution feeds off pornography.
A neo-liberal trend which is now visible in the sex industry is concentration. In modern prostitution, the independant prostitute who works at her place and publishes her own ads is becoming obsolete. What is becoming the new norm--beside international brothels online-- are brothel chains. Brothel chains appear to be organized mostly at the national level, but the trafficking of women working in these brothels is always international.
The biggest brothel chains are in Germany. According to the info provided by German abolitionnists, 80/90% of German brothels are controlled by trafficking networks. The 3 major brothel chains in Germany are :
x the Paradise brothels, which started in Koln 25 years ago, and are now present in several major cities in Germany and Austria, like Stuttgart, Frankfort, Munich, Graz, Salzbourg etc. The men behind this chain are Jurgen Rudloff and Michael Beretin. Jurgen Rudloff is a former executive in the textile industry who looks like the chief of executive operations of a middle size company. He speaks and behaves like a businessman. The official turnover of his company is 6 million Euros per year, with a profit margin of 15/20%. He plans to introduce stocks of his company on the stockmarket. This man likes to describe himself as a respectable professional. He is the father of 4 children, and deeply religious. He likes to speak about his faith in God, « without which life in this society would be impossible ». Somehow, I doubt that he would envision a career as a prostitute for his daughter. Jurgen Rudloff has been arrested for tax fraud and human trafficking.
x the Pasha chain, whose owner is Hermann Muller. His huge brothel in Köln is an 11 floors building, including 140 bedrooms, and visited by more than 1 000 punters daily. The rent payed by the prostituted women « working » in this brothel brings about 500 000 Euros monthly to its owners Of course, Muller has been arrested for tax fraud as well.
x and the brothels of the famous « prince » Marcus von Anhalt, the darling of the tabloid press and star of reality tv, who owns more than 20 brothels and strip clubs, where more than 1 000 women « work » for him. He has also been arrested for tax fraud, money laundering and human trafficking and has done 4 years in jail. You can see pics of him cavorting with his friend Pamela Anderson, who is a figure of the animal rights movement but comes to Germany to celebrate the opening of Marcus von Anhalt’s new brothels.
These brothels use neo-liberal commercial strategies : happy hour, senior and group discounts, loyalty card, etc.
In Germany, the figure of officially registered brothels stands at 3 500 but the number of illegal brothels is higher. The consequence is that 1,2 million German men visit brothels or prostitutes everyday, and about 2/3ds of German men have bought sex at least once. Prostitution and pimping are seen as jobs like any other, perfectly respectable, pimps are guest stars in tv shows, in films etc… It’s so much part of regular business that businessmen invite their customers to brothels to sign contracts, and the cost of these visits are refundable expenses paid by the company. Big companies like Volkswagen, Thyssen Krupp and the insurance company Ergo offer their partners free passes to brothels, or free sex trips to exotic places. This type of 19th century unrestrained capitalism tends naturally towards the creation of monopolies. In the US, Denis Hof, who was the Republican candidate to the state congress and passed on very recently, owned 1/3d of all the brothels in Nevada. Michael Beretin himself, boss of one of the 3 biggest brothel chains in Germany and founder of the German Federation of Erotic Activities (in clear, the German association of pimps) says it himself : « the new law will bring about the closing down of small brothels, only the biggest ones will survive ». Indeed, many small brothels are closing down, because they are too small to implement the new legislation, and/or illegal. As Naomi Klein writes : « in the neo-liberal economy, monopoly is the reward for efficiency ».
Since prostitution is, with marriage, one of the pillars of the patriarchal system, modernizing prostitution, making it better organized, more up to date technologically, more cost efficient and more profitable, ultimately consolidates patriarchy. In particular, and as a conclusion, I would like to underline that the consequences of the legalization of prostitution--and therefore of the normalization of prostitution in a country-- are huge for all its womenfolk.
Legalizing prostitution validates a number of major dogmas of the patriarchal ideology : that men have an unconditional right to sex, that sex is for men a non-negociable, vital need like hunger or thirst. That what sexual intercourse is about is male orgasm and sexual pleasure, and that the sexual pleasure of women is irrelevant. That in order to satisfay this male right to sex, a special class of women must exist, recruited among the poorest and most vulnerable, that their health, wellfare and own sexuality must be sacrificed to the satisfaction of this male right. That only males have an autonomous, self-defined, self-assertive sexuality, women’s only role in sex being limited to responding to males’s sexual demands. That male sexuality is about invading female bodies, effraction, violation, imposing one’s will on women and breaking their physical and psychological boundaries. Patriarchal sexuality as defined by prostitution is still about the violation of females. It still tells women that there are two categories of women, the virgin/spouse/mother and the whore—and that men need both.
But most of all, it tells German wives that --based on the fact that 2/3(ds) of German men have visited a brothel at least once, and that 1,2 million German men buy sex everyday—they better accept that their partner may be visiting prostitutes, and not make a fuss about it. They better accept that their sons, when they reach 15, will be taken to a brothel by their pals. That their husbands may routinely meet their co-workers at a brothel, to discuss some work problem or just for a drink. They should know that he might have sex without a condom with prostituted women as well as with them. These German wives married to punters are called SchattenFrauen (« women in the shadow »). German women know that they better not stroll in some areas because they are going to be harassed like if they were prostitutes. Women who go out with female friends to a bar will be the target of heavy harassment by men, unlike in countries like Sweden where this is not acceptable. Generally, the male treatment of all women is affected if prostitution and pornography are socially condoned. To give an example, there is hardly any young woman who has not been asked by a male sexual partner to accept to perform a sexual act shown in pornography. Since prostitution and pornography show women as products to be bought or sold at men’s will for men’s pleasure, they unavoidably re-enforce the basic misogyny and contempt for women which is the cornerstone of patriarchy.