22 June 2011

Crime and Punishment

Reason Online has a smattering of articles highlighting just how terrible the American justice system has become.*  The problem, if stated briefly, is that the current criminal justice system has led to a large of number of wrongful convictions while being extraordinarily inefficient and inhumane.  Additionally, there are many who are prosecuted for crimes that don’t have victims.

Of course, the high conviction rate in general has led to a lower crime rate, so there are some benefits to the current system.  But much is left to be desired, and the current system simply begs the question:  what can be done to make the system better?

To answer the question first requires a definition of “better.”  In this case, better means designing a system that maximizes correct convictions, minimizes wrongful convictions, maintains a low crime rate, discourages the prosecution of victimless crimes, and minimizes social and systemic costs.  To this end, I propose overhauling the current system such that a)all criminal judges be democratically elected; b) punishment is pecuniary; c) jails exist primarily as debtors’ prison; d) criminal investigation is privatized; e) prosecution is privatized; f) legal defense is completely privatized; and g) there is a “loser pays” system.  Additionally, the government should be completely prohibited from investigating and prosecuting crime.

Criminal judges should be democratically elected in order to ensure that local judiciaries reflect the ethical and moral beliefs of the social order in which it operates.  As I have noted before, rule of law is an impossible dream, and there is no way to escape some form of rule of man.  This should not be ignored, and need not be a bad thing.  If a judge has to pass a ruling at the margins of the law, he should make a ruling that concurs with the morals of the majority of the people in his jurisdiction.

Punishment should be pecuniary and, along with that, retributive.  One reason for this is that some of the money generated can be used to offset system costs.  This occurs in a number of jurisdictions where those who are convicted have to pay court costs.  Since criminals are the ones who create a need for a criminal justice system, it is fair that they pay for the system.

Another reason for pecuniary punishment is, as noted above, to make restitution to the victim.  In the case of a judicial decision, the judge would determine how much the convicted defendant would pay to the victim.  If the parties settled out of court, they could determine amongst themselves how much the victim should receive.  Incidentally, this would encourage more settlements and plea bargains, which would reduce social and systemic costs.

Since punishment would be pecuniary, jails would not be needed for punitive measures.  Instead, jails would be used to ensure that the criminal paid the fines and fees he owed.  Jail stays would be brief for petty crimes and lengthy, if not indefinite, for major crimes.  Once the fines were paid, the criminal would be free to leave.  The length of his sentence would be entirely up to him.  This also helps to put caps on the government’s power to seize things, since it would be up to the criminal alone to decide if he wanted to sell his property in exchange for his freedom.  Of course, this system is inherently extortional, but it is more tolerable than the alternatives.

Investigation should be privatized so as to ensure that victims seek out investigators.  Having victims bear the initial costs will help to ensure that the system is not bogged down by very petty crimes.  It also ensures that crimes with low probability of being solved do not waste resources.  It is easy to feel that all crimes are deserving of investigation, and that no crime should go unsolved, but the simple fact of the matter is that this world is imperfect and there are not enough resources in this world to ensure perfect justice.  Private investigation helps to encourage a more prudent allocation of resources.  It also helps to eliminate some of the violent excesses of the police state.

Privatizing prosecution has the same effect as privatizing the police.  In addition, it helps to minimize the number of wrongful convictions because the prosecution would have fewer powers under this system than under the present system.  Quite simply, prosecutors would not have the ability to promise snitches immunity, nor would they have any of the other powers to encourage people to testify falsely.

Legal defense should also be completely privatized.  This is done simply to minimize social costs.  Public defenders would be largely unnecessary, for reasons that will be clear later.

A “loser pays” component is the most important part of this proposed system.  If the case goes to court, whoever loses the case would pay court costs, defense costs, investigation costs, and prosecution costs.  This means that victims have a very strong incentive to find the correct criminal; it also means that the criminal has a very strong incentive to settle out of court, so as to minimize costs.  This will in turn reduce wrongful convictions, increase correct convictions, while decreasing the social and systemic costs.  Furthermore, a loser pays system ensures greater social fairness in that only those who impose social costs are obliged to pay for them.  In essence, those who make the system necessary are the ones who pay for it.

At this point, it should be obvious that the proposed overhaul would set a system of incentives in place that would meet the goals listed above.  The loser pays aspect of the system would ensure greater accuracy of criminal convictions.  Pecuniary punishment would not only help the victims, but it would also increase the cost of crime, which would help to maintain a low crime rate.  Privatizing the investigation, defense, and prosecution will increase systemic efficiency, reducing the social and systemic costs of crime.  And preventing the government from launching and/or paying for the investigation and prosecution of a crime will help to minimize, if not outright eliminate, prosecutions of victimless crimes.

* See here, here, here, and here.


  1. Simon:

    I think one of the most important things you've said is to point out that the point of justice is restitution (to the extent possible). To the extent that the "justice" system specializes in punishment (as ours does), and does so at the expense of restitution (as ours does), it strays from justice widely.

    One of the problems (the main one, IMO) is that free market competitive forces are not permitted to improve the court system (It's a court of law, not a court of justice...) Your example privatizes everything... except the court. I suggest we make that a free market as well.

    Competition is what improves products and services and lowers costs in every other industry - McDonald's keeps Burger King on the ball; K mart keeps Wal Mart pushing those prices down. BMW will try anything they can to eat Porsche's lunch (and Porsche knows it).

    If dispute resolution were a free market service like housekeeping or life coaching or personal training, (I wish I could say healthcare, banking and monetary creation, but alas....) judges and courts that handed down unjust opinions wouldn't just get reversed, they'd go bankrupt.

    A free market in dispute resolution also harnesses competition between courts, as it is now, it's a forced monopoly cartel; only the most egregious violations of justice get reversed since everybody's in the same club, and the tendency is to not make waves, play nice, and preserve the "body of law" as it currently exists, whether good or bad. In a free market in justice, every little error would get exposed, and every marginal improvement would get exploited by competitive courts, and radical new ideas and throwing out all the old garbage would be on the table, because improving the practice of dispute resolution, and getting it closer to the ideal of justice means improving your bottom line.

    The result wouldn't be perfect, but it would be as close as we're likely to come, and, as you and the Reason pieces have shown, there is much room for improvement.

    For much, much more about eliminating all government monopolies; Courts, law enforcement, even defense, read Chaos Theory, by the Mises Institute's Bob Murphy at http://mises.org/books/chaostheory.pdf 77 pages.

  2. I don't think you have to privatize the courts in order to make justice effective. If the courts are so terrible, than those who are in the wrong will have an incentive to avoid them by resolving the problem outside of the court. Also, most of the problems with the current system stem from giving special advantages to prosecutors (cf. The Tyranny of Good Intentions). Take away prosecutors' power and strengthen the incentive to settle outside of court, and you will see a massive improvement to the system.