Economists Gone Wild
Libertarian Girl's call for a tax on breast implants has already generated much condemnation from the usual suspects. But before we revoke her libertarian credentials, it's worth discussing the idea at face value to see what's right and wrong with it from an economic point of view.
Libertarian Girl identifies a potential collective action problem. She suggests that women get breasts implants to make themselves more attractive to men. But by doing so, they make the remaining women who don't get implants marginally less attractive in comparison.
This is a familiar problem in economics and in everyday life. It happens everytime we go to a concert or a sports arena. Inevitably, someone stands up to get a better view. But this blocks the view of the people in the row behind, so they stand up as well. Pretty soon, the entire stadium is standing to get a better view, even though we would be better off if we all sat down instead. (Same view, less leg strain)
Or consider advertising. Part of advertizing is education - informing consumers of a product that they did not already know existed, or convincing them of the benefits of a product they would not otherwise use. This is a positive-sum game because it expands the size of the pie. It creates exchanges that would not otherwise take place. Another part of advertising does not create these benefits, but merely shifts them around - what economists call rent-seeking. People who already consume a different brand of the same product may switch brands because of advertising. When advertising’s main effect is brand switching, the dominant strategy for each firm is to advertise heavily in order to counteract the competitor's advertisements. But all of the competitors would be better off if they could agree to not spend this extra money on advertising and instead just keep it for themselves.
Does this mean that advertising should be taxed, as Libertarian Girl suggests we do for breast implants? It's not clear why. True, advertisers are less well off than they would be if they could agree to a ceasefire. But ad agencies and media outlets -- magazines, newspapers, Google, television Networks -- are better off. Some argue that advertising creates negative externalities -- we have to look at ugly billboards, pop-up ads, and boring commericials on television. On the other hand, advertising creates many positive externalities. Ads make television shows free (or at least cheaper) for all viewers, only a fraction of which are people who go out and buy the product advertised. Indie newspapers like Atlanta's own Creative Loafing are completely free for readers, funded entirely with ad revenue.
So back to breasts. Should we tax implants? Libertarian Girl ignores some important benefits of breast implants and makes some questionable assumptions. Women get breast implants not merely to attract men, although that may partially explain some women's motivation. Rather, most women say that they get implants to increase their own self-esteem. Admittedly, this is closely tied to societal notions of female attractiveness, but it not clear how or if we could change these views. It is doubtful that a tax on implants would suddenly make society change its ways. The number of men who want their girlfriends to look like Playboy Centerfolds will not decrease if implants are taxed.
Given that these conceptions of beauty exist, women who wish to enlarge their breasts do so not only to attract men but to make themselves feel better about their self-image. This benefit is largely internalized, although it does create some externalities by reinforcing the social conception of beauty, thereby making some other women who were not born with large breasts and have not yet undergone surgery feel worse about their self-image. The same is true for all social norms. People conform in order to be accepted, and by doing so, make some of those who don't conform feel worse about themselves. That is simply the nature of social mechanisms. Taxing implants reduces the supply side of this social mechanism, but it does nothing to reduce the demand side. (Unless you believe in a Say's Law of breast preference)
We must also recognize that these social conceptions, while widely shared, are not universal. Many women have no desire to conform to the Barbie Doll physique, and feel just fine about their self-image. Many men, including myself, feel the same way.