The Wild West ... the outback ... The new world of the 1800s was a time of true liberty. People stood on their own merits. They won or they lost and they reaped the rewards or swallowed the consequences. There were no cubicle dwelling civil servants hell bent on saving you from yourself. No planning permits no licenses no permissions no heritage overlay no bylaw no regulators no inspectors. And guess what ... it worked

This site is set up to provide a forum for a number of like minded professional economists to post and comment on contemporary issues. There are a number of regular contributors whose bios are made available on the site. Most if not all of these contributors use a pseudonym for the simple reason that they are practicing economists who must take into consideration the commercial implications of posting their opinions.

While some may feel that this is a bit of a gutless approach it is the only way we can ensure free and open discussion without jeopardising our paycheques.

Tuesday, September 29, 2009

Crime and punishment (Roy Rodgers)

All this talk of wowsers and their wowsery ways inevitably leads to the topics of crime and punishment. These two are perhaps the hardest concepts for anyone who takes liberty seriously to come to terms with. They provide an obvious conundrum. The libertarian has to somehow come to a position on the potential legitimacy of the state's use of coercive powers that range from simple fines, to incarceration, in some cases torture and in some countries all the way through to death.

Some laws where made to be broken...

Since the end of the second world war most developed economies in the west have seen an amazing boom in legislation. God knows what the page count is currently, there are laws and regulations for nearly everything.

I got fined $170 just last week for parking my car for longer than one hour in my residential street just outside my house during the day when the street was half empty .... apart from the fiscal pain this caused me, the law the I've broken or the crime that I've committed is obviously absurd. I got fined for simply parking my car ... there was no congestion issue, no one got hurt in any way. I was simply utilising a public asset (the road) in exactly the manner is which it is intended to be utilised.

And how about the guy in Port Melbourne who recently got fined $50,000 for demolishing his house which he paid for with his cash but which unfortunately had inestimable heritage value as an example of post war public housing. Yes that's right this guy got in the shit because he was rude enough to demolish the crappy public house that was standing on his $1million dollar block of land. ABSURD.

So the next time you've stepped out at 4am to get panadol for your loved one and you find your self sitting at a red light in a street that resembles the set of 28 days latter. Just ask yourself why the hell am i sitting here in my pjs like a big fat goose just because there's a red light. Ask yourself if i ran the light who would be to blame ... you or the idiot bureaucrat that forgot to turn the lights off when everyone went to bed. For god sake ... that light deserves to be run!

There is a legion of examples of laws and regulations that represent nothing short of state based abuse and should be canned immediately. Laws and regulations that have nothing to do with causing harm to others. Wouldn't it be good if someone had enough gumption to propose a libertarian day where it was the duty of every Australian to break some form of ridiculous law. A day where its your duty as an Australian to flip the bird to the cubicle dwelling bureaucrats. However, that person will not be me ... I'm sure it would be illegal to suggest such a thing.

the conundrum ...

Despite these seemingly pointless laws, it can not be denied that there are genuinely bad people out there .... or more correctly people out there who either want to, or are prepared to if the circumstances dictate, do serious harm to others. People whose utility functions include the disutility of others, who are totally indifferent to the utility of others, or those who take no heed of the reciprocity associated with doing harm to others.

The conundrum for the libertarian is that there are people who whether through circumstance, disease or stupidity represent a genuine risk to the rest of us. And the only way to effectively address this risk (at least in the short term) is to remove them ... to physically separate them from those to whom they wish to do harm. And as unfortunate as it sounds there is no institution better placed to do this than the state. The conundrum is that there may after all be a role for the state and it's not a very nice role. It's a role that involves using force and coercion, something any sane libertarian feels hesitant in allowing the state to use.

While there is a role for the state, it doesn't necessarily follow that it's doing a good job of it. In fact the state seems to be a bit confused about what its actually supposed to be doing. It would seem that the conventional approach to punishment and prisons is based on the notion that punishment is doled out to prisoners in the belief that it will reform them or rehabilitate them for their ultimate reintegration into society.

While noble, such a goal is not necessarily consistent with the idea of risk aversion. If you take the position that the state justice and prison system exist as a way of society managing the risks associated with it's criminal class, then you have to wonder how recidivists actually exist. If the system assessed their risk efficiently then they would not be released and they would not have the opportunity to keep perpetrating. In assessing the threat that a convict poses to society the authorities should reference the statistical probability that the prisoner will re-offend. Maybe they do?

It's worth recognising that rehabilitation itself is one way of addressing such risk. However, those that commit crimes that are highly recidivist in nature like pedophiles, serial rapists or serial murders are mostly likely highly probable to re-offend. So regardless of whether such individuals have found god and repent for their sins their actual release will also depend on the statistical likelihood of them re-offending. The point being that prisoners who have committed crimes or exhibited behaviour that indicate a probability of recidivism would not be released.

And I recognise that it doesn't sound anything like the rant of a libertarian and places a lot of power in the hands of the state .... when i said conundrum i meant it.

and now to the hangman ...

The following link takes you to an archive of the last words of executed inmates. The archive is maintained by the Texas Department of Criminal Justice. It's probably safe to assume its existence is due to a legislative obligation placed on the department.

As with the issues of crime and punishment, the archive presents libertarians with a conundrum. Included in the archive is the inmates rap sheet. I haven't gone through all of them but for the sample that i looked at based on their rap sheets and the horrible things they have done they can only be described as animals, nothing short of walking human excrement .... ... ... on the other hand when you read their last words you get the uneasy feeling that there is some humanity there. From the sample there was a universal profession of sorrow for the pain that they had caused others. Now I'm assuming that they are telling the truth and given that the statements are taken just before they get the needle there's no good reason for them to lie.

While in general crime and punishment is perplexing, one can form positions about some of the more extreme aspects, like capital punishment. Capital punishment is definitely something the world is better without. The primary reasons are:
  1. there has never been any form of government in human history competent enough to impartially administer a program of capital punishment, nor has any had enough nous to avoid the odd case of judicial murder
  2. I have a strong suspicion that given the appeals mechanism necessary in such systems and the opposition that such programs generate amongst your right for life types, the costs involved would far outweigh those of the alternative - long term incarceration.... and we pay enough tax as it is.
The economics of crime ...

One interesting thing worthy of note was that the last minute, seemingly contrite apologies, professions of sorrow and admissions of guilt were consistent with economic theories of crime and punishment.

One of the first economists to try and model crime and punishment was Gary Becker. Becker wrote a seminal paper imaginatively titled Crime and Punishment: An Economic Approach.

In his paper Becker argues that there is an optimal level of enforcement and punishment. More importantly Becker established quite convincingly the proposition that criminals are rational and that criminal behaviour follows rational decision making processes. The basic contention is that the criminals willingness to commit crime is a function of both the positive utility he/she derives from the crime (some of a pecuniary nature some of a non pecuniary nature) and the costs associated with the crime.

Under Becker's models the costs are a function of the probability of being caught and the value of the punishment. Sort of like analysis regarding contingent states of the world.

The paper is a good read. Becker proposes a framework similar to a classical one with the exception that its based on involuntary exchange. What would normally be the buyers are the victims and the sellers are the criminals.

It follows that (depending on the criminals level of risk aversion) the supply of criminal behaviour could be influenced by increasing the probability of being apprehended or alternatively by increasing the costs associated with penalties. Which is more effective depends on the criminals risk profile, for those with a risk affinity, increasing detection and apprehension is more effective than increasing penalty. Its less clear for the risk adverse, increasing either penalty or probability of apprehension would most likely do the job.

The interesting thing with the archive of last statements is that it would appear to represent a situation where the probability of apprehension and conviction is 100% and the cost associated with the penalty is as high as it could possibly be (assuming no one is suicidal). In these circumstances it would appear that all (or certainly all the ones i looked at) express regret and remorse. It would appear that when you reach the universal maximum for the cost of crime you may achieve some form of rehabilitation.

This universal expression of regret and remorse is dependent on the imminent penalty. We have no grounds for assuming that were the penalty to be removed or where we to introduce a probability that it would be removed, that we would get the same outcome.


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