So a socially valuable service is under-rewarded and therefore under-supplied. This is a problem we've experienced before. We face it whenever a producer fails to safeguard the environment.
Extrapolating from their usual response to environmental issues, I assume that liberals will want to attack the problem of excessive sexual restraint through coercive regulation. As a devotee of the price system, I'd prefer to encourage good behavior through an appropriate system of subsidies.
The question is: How do we subsidize Martin's sexual awakening without simultaneously subsidizing Maxwell's ongoing predations? Just paying people to have sex won't work--not with Maxwell around to reap the bulk of the rewards. The key is to subsidize something that is used in conjunction with sex and that Martin values more than Maxwell.
Quite plausibly, that something is condoms. Maxwell knows that he is more likely than Martin to be infected already, and hence probably values condoms less than Martin does. Subsidized condoms could be just the ticket for luring Martin out of his shell without stirring Maxwell to a new frenzy of activity.
As it happens, there is another reason to subsidize condoms: Condom use itself is under-rewarded. When you use one, you are protecting both yourself and your future partners, but you are rewarded (with a lower chance of infection) only for protecting yourself. Your future partners don't know about your past condom use and therefore can't reward it with extravagant courtship. That means you fail to capture the benefits you're conferring, and as a result, condoms are underused.
It is often argued that subsidized (or free) condoms have an upside and a downside: The upside is that they reduce the risk from a given encounter, and the downside is that they encourage more encounters. But it's plausible that in reality, that's not an upside and a downside--it's two upsides. Without the subsidies, people don't use enough condoms, and the sort of people who most value condoms don't have enough sex partners.
All these problems--along with the case for subsidies--would vanish if our sexual pasts could somehow be made visible, so that future partners could reward past prudence and thereby provide appropriate incentives. Perhaps technology can ultimately make that solution feasible. (I envision the pornography of the future: "Her skirt slid to the floor and his gaze came to rest on her thigh, where the imbedded monitor read, 'This site has been accessed 314 times.' ") But until then, the best we can do is to make condoms inexpensive--and get rid of those subway ads.
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