All Commentary
Friday, October 1, 1999

To Serve and Protect: Privatization and Community in Criminal Justice

What Is the Solution to Crime?

Over the last three decades, the share of GDP consumed by the public sector on crime control has tripled and now exceeds $100 billion annually, or about $1,000 per household. Crime rates have declined in the 1990s, suggesting some benefit from the expenditure, yet crime stubbornly remains three times higher than 30 years ago, according to FBI statistics. These data imply a substantial decline in the productivity of law-enforcement bureaucracies.

The natural thought of a public choice economist is, “So what else would you expect?” Big government is no more likely to be the answer to crime than to any other problem. Private-sector solutions and market-driven reforms are more likely to work. The root solution for crime is a set of institutions that get incentives right. Custom and law must internalize (privatize) more benefits for crime suppressors and make crime producers pay more of the costs they impose on victims.

Bruce Benson, professor of economics at Florida State University, pursues this logic brilliantly. Benson is a veteran researcher on crime and law, and in this volume he integrates a sprawling literature in a way that changes the whole discussion. The book works on two distinct levels. First, it provides nearly encyclopedic coverage of private techniques in criminal justice that range from medieval Anglo-Saxon days to contracting out of prisons today. Second, and more important, it elevates us to a high philosophical plane by redirecting our attention from social-engineering goals like deterrence and rehabilitation toward a focus on justice and individual rights and responsibilities.

Like education, criminology has long been a field rent by fads. Lacking a real intellectual anchor and populated primarily by sociologists, criminology has for the most part ignored a rights-based perspective. Benson’s book fills that void. His premise is that justice for victims should be the goal of our justice system. All else follows from that premise.

Offenses thought of as crimes today, like murder and robbery, were once treated as private torts, with economic compensation as the primary remedy. This private system of justice worked well and could do so again, according to Benson. With the prospect of recovery of damages, the victim had a greater incentive to report a crime, correcting a major failing in our present system where victims only report about 40 percent of crimes to the police. Restitution rights were transferable, thereby promoting efficiency in apprehension and liability.

Our present reliance on the state to protect our property rights and control criminals is very recent, less than two centuries old in most respects. The historical reason for this evolution was that kings took away victims’ property rights to restitution, and the path of criminal justice in England then wandered away from individualism toward collectivism. In the tradition of Ronald Coase and Steven Cheung, who debunked the theories that private markets must fail to supply lighthouses or pollinate fruit, Benson’s historical research explodes the doctrine that a justice system is a “public good” that only government can provide.

Perhaps Benson’s most arresting evidence comes from Japan, which has the lowest crime rate among industrialized nations by far. A primary reason, claims Benson, is that their system is more privatized and victim-oriented than ours. There, the fundamental right is for the victim to be restored to his original condition. In contrast to our culture, in the Japanese culture there is no acceptable excuse for criminal activity. The criminal must bargain for forgiveness with the victim and if the wrongdoer negotiates an acceptable settlement package and shows contrition, public-sector punishment is lenient.

Benson documents the substantial private effort to combat crime in the United States, estimated at $300 billion a year, and therefore larger than the public-sector effort. This will continue to grow rapidly, Benson predicts, if only to compensate for continuing public failure. Our system is also moving toward victims’ rights, recently enshrined in many state statutes and constitutions. Benson sees these as largely illusory gains because law-enforcement bureaucracies have co-opted victims’ rights organizations. He warns victims’ groups that they must forge an independent path in order to transform criminals’ “debts to society” into private, transferable debts to individual victims.

Shortcomings in the book are few and usually amount to legitimate differences of judgment or opinion. Benson sometimes fails to use the latest data available, and ignores the best estimates, say, for the probability of prosecution on arrest. Sometimes he attributes facts like exclusionary rules to the statist nature of the justice system too quickly, ignoring competing hypotheses like rent-seeking by lawyers.

Clearly, the crime solution lies in more individual responsibility and less public responsibility. Benson’s daring conclusion—privatize both the demand for and the supply of criminal justice services—leaves us with a wealth of provocative diagnoses and examples for further research. Benson has given us a breakthrough book.
Morgan Reynolds is professor of economics at Texas A&M University.

  • Bruce L. Benson is the DeVoe Moore Professor and Distinguished Research Professor in economics, Courtesy Professor of Law, and Director of the BB&T Program in Free Enterprise at Florida State University until he retires at the end of 2015, when he will have Professor Emeritus status.