In 2009, £5.3 billion was attributable to prostitution while illegal drugs were worth £4.4 billion. Together, they amount to around 0.7 per cent of the British economy, or roughly the same amount as agriculture. Other illegal activities, such as the smuggling of alcohol and tobacco, are already included in British growth and make up some £300 million.
How is that possible? Why is the British agriculture as important (or unimportant) as sex and illicit drugs industry?
The surprising answer is productivity. As the productivity of farming has increased, sharp competition has cut commodity prices and farm incomes.
Technology has significantly boosted productivity. The productivity gain, however, has paradoxically undermined farm earnings. Agricultural products have become gradually cheaper relative to GDP for the same reason.
The same trick can't be done with prostitution. Hardly any technology improvement will increase productivity in the sex industry. Robot sex workers? Oh, thank you very much.