In another one of my classes, the topic of the costs associated with incarceration was brought up, and it got me thinking with some of my newly learned public choice frameworks. First thing first, prisons are a public good. The “good” that prisons provide is a bit obscure and difficult to define in economic terms, but I think that I can appropriately define it as the protection of property and persons from harm that may be perpetrated by those who are known to harm property or persons. Prisons are public goods because the protection they afford to people and property is not excludable, and consumption of this protection is reasonably non-rival. (Prisons also must be provided through sovereign government and collective action because there is no rationale for private markets depriving people of their freedom.) There is, however, a different way of thinking about the value of prisons that is similar to our reading on redistribution as insurance. It costs about $37,000 per year (close to half the US GDP per capita) to hold an inmate in federal prison. Hopefully, it may stand to reason that those high costs are at least somewhat allocatively efficient under this different view Going along with the assumptions in Mueller 3.1, I will say that there are two classes of property, and each class has differing utility for their property and differing probability that they will be harmed by a prisoner who might otherwise be free. Under these assumptions, prisons and the protection they create is supposedly worth a large amount of money. The cost of this insurance is lowest with a membership of all society, to avoid the free-rider problem, and therefore, prisons may be best thought of as an insurance natural monopoly that protects persons and property. Through this blog post, I am aiming to analyze the costs of prisons in a different way, and considering that the costs of incarceration are very high, and the American prison system still has many concerning issues. I am wondering if public choice can justify this cost or if there may be a less expensive alternative framework introduced later in class.
2 comments:
The idea of prisons acting as insurance is an interesting way of evaluating a major structure of our society. I do wish to make the point that though your perspective against private markets providing prisons may seem morally or ethically correct, private for-profit prisons are not uncommon. As of 2018, 8.41% of all incarcerated prisoners were kept in private prisons. These prisons don't function completely freely as a part of the market, as they receive government contracts and permissions to operate, but they do operate very independently. The point you raise against opposing this happening is one many people in our society share, as profiting off of imprisonment seems morally reprehensible. Nevertheless, many important and well-known institutions and organizations have invested in these businesses, even many Universities. Considering this reality, some prisons can be seen as a public good being provided by private parties. The level of efficiency or moral efficacy may be of question, but perhaps the private provision of prisons from an economic standpoint should be considered to remedy the costs and problems of over-incarceration the current system faces.
Hi Cooper, thanks for the comment.
I am very aware of the existence and reprehensibility of private prisons in the US, and I'm glad you brought it up. It is a massive topic that I couldn't really address in this application of public choice (maybe a topic for a future blog post) but I agree with your analysis. I would imagine that privatization of public goods (prisons being a strong example of perverse incentives) is something that Mr. Coppock has some thoughts on, and I would definitely like to hear them.
Your point on full private provision of prisions is definitely an interesting one, and I would even like to hear your ideas in a future blog.
Chris
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