Coase Colored Glasses


Archive for March 30th, 2011


Prison Break.

Recently, my roommate and I started watching Season 1 of Prison Break on Netflix.  I hate it because we get sucked in, watching episode after episode, and before we know it it’s 3 AM.  But watching it has got me thinking about our prison system, and the death penalty, specifically–in a suspenseful sort of way.

Friedman says that “Either there is something wrong with my analysis of what an efficient system would look like or our system is far from efficient.”  I think the latter is obvious, right?  I’ve never been to prison and have zero “street cred,” but what I gather from watching Prison Break is that prisoners do almost nothing productive all day.  I think Friedman’s prison factory is an excellent idea.   Except for the episode with the prison riot, which makes me think that it’s probably not a good idea to put any sort of heavy machinery in the hands of criminals.  But there is certainly a more efficient way than our current system.  I think there are several way that prisons could be transformed so that they produce rather than just consume and suck tax dollars.  I guess it happens with things like street cleaning.  Is that the only way we have to make prisoners benefit society?  I’m not mocking the system; I actually don’t know if there are other methods currently being employed.

Friedman offers the death penalty as part of an efficient system of criminal punishment.  However, if we are going to include costs and benefits to criminals when defining efficiency, as Friedman suggests, then we should reconsider this.  Just watching the guy on Prison Break prepare for his execution was wrenching.  I can’t imagine doing it myself.  This is a serious cost we’re imposing on criminals.  Maybe the net cost to society is greater than the enormous cost imposed on those few who are executed and their friends and family, but it seems unlikely.  Friedman admits (at least as I understood him) that an efficient system of criminal punishment would not be pretty.  That’s certainly the case if we incorporate the death penalty.

Larger Punishments can Lead to Less Efficiency

Two of the posts earlier today made me think about efficiency about the problems associated with litigation. Let’s say that we do make the richer pay more, or let’s even raise the punishment above it’s current levels. This will create a different problem. Let’s say that we an $80 dollar ticket to a student is worth $1.2 million dollars to Mr. Bill Gates, or $5,000 dollars to Stan Checketts. If I get slapped with a fine like that I’ll just find myself sucking it up and going to the week without food to pay off the ticket. What is Mr. Gates and and Mr. Checketts going to do? I submit that they are going to lawyer up. I’m not aware of any lawsuits brought against Mr. Checketts, but I do know that Bill Gates was able to walk his way out of some anti-trust lawsuits, I don’t see a speeding ticket being all that difficult to get reduced or even taken away. As Friedman discusses in this chapter we also see that litigation is also a net cost on the economy meaning less efficiency.

If we are to increase fines or punishments, it needs to be below a level that is likely to cause someone to seek to litigate. If litigation occurs that efficiency of a punishment decreases substantially.

The Rich Should Pay Higher Fines!

In chapter 15 Friedman begins to discuss the concept of why rich people should not have to pay higher fines as punishment. He says that a while he ago he believed that this is how things should be done, but eventually he was able to realize why his argument was wrong. I just have a really hard time accepting this argument. It only makes sense in my brain that if a person has more money, then they should be forced to pay more money so that they actually feel the consequences of their actions. I just feel like it can only benefit everybody because if fines are higher for certain people then the government is getting more money which could be used to improve public areas etc. Friedman mentions the idea that to deter rich people from committing crime a higher punishment is necessary. The costs of implementing this deterrence could be high and therefore it could be more efficient to try to only prevent most crimes, not all. Even if this is so, I feel like as a society we would be willing to spend more money to have the feeling of safety. I do not think that it will ever make sense to me why this idea is wrong. Furthermore I think that perhaps Friedman should factor human nature into his arguments a little bit more because I think that the feeling of being safe is something that is very important in our society.

One of the most interesting things that Friedman mentioned in this chapter is how to actually prevent crime.  That is a most intriguing question and one that could have several answers.  When I asked my roommates what they thought about it I was told that maybe the best idea was to make the punishments more severe.  When they told me this I justs had to laugh.  This is exactly what Friedman was talking about, or rather the opposite of what he was getting at.  When you increase the punishment you don’t actually provide an incentive for people to stop committing crime.  The best way to prevent crime is to actually increase the amount that you actually convict people.

When you think about the concept it actually makes sense.  When I was in Africa they had a different way of catching speeders.  They placed speed cameras at random places along the road and if you were speeding they took a picture of your licence plate and you were mailed a ticket.  The cops did not set speed traps and they never pulled people over.  As a result I rarely got a ticket.  After about a month of driving  around I had the cameras memorized.  I could go as fast as I wanted.  In fact in two years I only got one ticket because I knew where those cameras were like the back of my hand.  The one time I did it was because I thought the camera was broken because they were doing construction.  I constantly broke the law because I knew I would never get caught.

When I came home I got two tickets in the first month but I haven’t since then I have been clean.  I have not reformed but I am afraid to get caught.

Having the rich pay

Should the rich pay higher fines? This is a question that is brought up in this chapter of the Friedman book. I’m of the personal opinion that they shouldn’t. If you look at any fine as a deterrent, then the only way that it will deter is if it is high enough to make the cost of doing the crime too much. Now the value of one dollar is going to be less for the wealthier person, so a fine that is the same amount will deter less of the wealthy people then the poor. This leads me to my argument. If the wealthy are less deterred by a fine, then why not make a cut off income bracket where if you are above the cut off then all of the punishments are jail time. The value of a wealthier person’s time is much more than a poor person, so the cost of one day in jail is going to me higher for the wealthier person than the poor person. This could make the cost of committing the crime much higher for the wealthier person. And since the fine would still be deterring the poor person then you come to a much more efficient outcome when trying to deter crime.

Rich need a brake

This whole chapter really just reminded me of some discussions that we had in class a month or so ago.  I believe honestly and whole-heartedly that people who are rich need to have higher fines then the rest of the people who are poor.  If the true reason for fines is to incentivize citizens to not break the law then I think the punishment has to be something that is real to them.  This whole chapter has been the perfect example to me as to why it is important that we have fines but more importantly that those fines be punishments that will actually deter criminals.  If you break the law you should be punished right? And a punishment means that it should be something that actually hurts you in some way.  so basically if A = B and B = C then obviously A=C right? So if you break the law then you should be hurt in some way.  We all are to be punished equally for committing the same crime under the same circumstance right?  So then obviously punishments need to be equal relative to the person and where they are at in life currently.  If I am charged $450 for speeding it will have a far greater impact on me then it would say Robert Harris (Owner of ChemDry, net worth 7BIllion Dollars).  The punishment needs to fit the crime and the person.  I know this is something that may cost more but realistically it could also create a greater benefit for the courts.  There are plenty of people that are speeding that don’t want to have to pay large amounts of money.  For example I think  if Mr. Harris decided was caught speeding and was given a warning saying that the next time he was caught speeding he would be fined $250,000 I would say the court systems were finally doing their jobs.  The court would be doing what they love, making money and “enforcing” the law.  So, lesson learned right?  The Rich don’t need a break from fines, they need to use the brake in their cars.  Metaphorically of course.  And under that same reasoning feel free to raise speeding punishments for me to like $5,000.00 I promise you I am way less likely to speed right now then I am with these $89.00 tickets they keep giving me.  Just kidding, I drive a scooter.  But, really I think there is definitely room for improvement.

A Small Epiphany

I realized something as I was reading Friedman this week. It’s something that has been holding me back the whole time I have been trying to understand law and economics. Friedman states that economic analysis is a tool to discovery. He then says “If we treat it, instead, as an elaborate machinery for justifying the answers we already have, we will learn little that we don’t already know.” I think that this whole time I have been using economic analysis of the law as a justification tool as opposed to a discovering tool. I think that is the reason I have been struggling to understand so many of the concepts. So, I resolve from this day forward to use economics as tool of discovery and to learn new things as opposed to just review what I already knew or believed.

Something that Friedman mentioned that I found very interesting was that by increasing the conviction rate is actually a better deterrent than increasing the penalty. Why this may sound like an easy solution to fixing crime rates, I also thought about what a world would be like if conviction rates were inflated merely for the purpose of decreasing crime. While a crime free world would be nice, it is no coincidence that so many of our rights in the Bill of Rights are related to criminal law, particularly the protection of those accused. If people felt the need to convict accused criminals merely to raise the rate and deter crime, justice would not be truly served. Justice may be inefficient, but it is just. And I think that all of us agree that justice is a little more important than efficiency. I for one would be much more inclined to live in a slightly more dangerous world were I was guaranteed rights than a safe world were any wrong step could easily land me in jail. Just a thought.

Are the goals of punishments for deviance to create justice or to be efficient? I grew up always thinking it was justice, or maybe even revenge for the extreme cases. But reflecting on the discussion last class, it got me wondering if the judicial system is really efficient. It can take months and even years for a case to make it to court when finally the state was able to collect enough evidence, the defense has had a reasonable amount of time to prepare their arguments that contradict the evidence, and the judge thinks everyone has had enough time to prepare to defend their positions and has neatly wedged it into a spot on the crowded calendar. If the defense was not able to prepare an effective argument, it is their fault for not putting more time into finding one, or their client committed an indefensible act. Is there a possible way to make the system more efficient? There are not enough people/judges to try every case, therefore, there exists a prima facie filter of plea bargains and dropped charges. I feel that if there was a way to have the same ratio of judges to civilians as there is police to civilians, there would be more people to spread the cases to and there would be more consistent enforcement of the laws. The bigger cities have county jails that grant early release because of the over crowding brought on by inadequate facilities for the number of people in the area. The person released early may have been sentenced to the maximum amount for the severity or frequency of their crime, but because of crowding victims are not seeing any equitable application of justice. In summary, because of high expectations for acceptable behavior and woefully inadequate funds, services, and facilities, there is no conceivable way that punishment is efficiently administered in this country.

Tasty Decisions

I would like to address a quote from Friedman at the end of chapter 5 (page 238).  Changing behavior is a rough business.  After reporting on the effectiveness of rehabilitation, and incapacitation he said: ” assuming that we actually know how to change the tastes or skills of criminals in a fashion that makes them unlikely to commit further crimes.”  Here is he bringing up the facts that 1. We aren’t getting it right because crimes has nor reduced significantly over time, and 2. there are no facts to master about human behavior to date that allow us to make perfect decisions.

Friedman goes on to say that we are still efficient despite these problems.  “Present legal rules… are a consequence of the tastes of the populace.”  “Our peculiar tastes are actually an efficient set of norms” (239).  Though the system is not preventing all crime, we are making important statements to criminals about what will not be tolerated.  You cannot predict that all people will find the methods persuasive.  You also can’t predict how all people will respond to punishment and rehab.

These same statements made me think of the new(ish) movie Conviction. The man who is wrongfully accused of murder is not put to death because of the views of Massachusetts residents who are not in favor of the death penalty.  He is exonerated after incarceration and allowed to enter society.  Previous to the movie I leaned in favor of the death penalty, but realized that though his punishment was very inefficient, it was more efficient than death.  What if I were wrongfully accused?  Would the tastes of the people desire to reform me, or to them would it be more efficient to kill me.  I certainly want to make a statement that murder won’t be tolerated, but would I leave room for a way out if someone was wrongfully accused?  It’s all about the taste of the public.

In Defense of Bargaining

At one point I did write a post against plea bargaining because of the pressure it can place on innocent individuals. However, I feel the need to jump into this new conversation about the process. The truth of the matter is, in some crimes, there is no way the judicial system can benefit the victim. Fines go to the state, and then the perpetrator of the crime can be put in jail where we won’t be contributing much, if anything, to society. Sure, the victim can receive some closure, but any monetary damages would be gained through a civil suit. Plea bargaining in itself can provide some economic benefit. The defendant doesn’t spend as much time removed from society, and the prosecutor can devote his time and resources to other or more important cases. Sergeant Huish, of the USU Police Department, once told my class that many victims will accept a plea bargain as a form of closure because at least then the defendant is convicted and punished, even if it isn’t to the original charges. The defendant doesn’t risk harsh punishment, and the prosecution doesn’t risk losing the trial.