Cut Crime, Slash Spending

The logic of austerian deterrence

The field of Law and Economics has long urged governments to rely more heavily on monetary fines and less heavily on incarceration. Indeed, hard-headed legal economists routinely declare that criminal justice systems should rely exclusively on monetary penalties unless the optimal fine is so large that convicted defendants are literally unable to pay it.* Then, and only then, does it make sense to send the guilty to jail.**

In practice, however, this conclusion is far less dramatic than it sounds. The harsh reality is that criminal defendants are usually poor. Or even indigent. Since optimal fines for serious crimes tend to be enormous, convicts will almost always be literally unable to pay their optimal fine — and would therefore end up in jail, just as they do today.

Granted, you could try garnishing criminals’ wages. But this has severe logistical problems. Heavy garnishing doesn’t just discourage work; it encourages criminals to switch to the black market so their official earnings will be zero. This is especially bad when you realize that convicts’ “black market occupation” could easily be thief or robber.

Amazingly, though, there is another way to impose monetary sanctions on criminals. A simple way. An easy way. A way that costs taxpayers less than nothing. Namely: Cut their government benefits!

Suppose you’re convicted of shoplifting. The optimal fine is $10,000, which you don’t currently have. But in a generous welfare state such as ours, the government has already promised to give you far more than $10,000 during your retirement. Rather than imprison you, rather than garnish your wages, the government could directly deduct $10,000 (plus interest) from your future Social Security payments. Instead of expressing your punishment in terms of years in jail, the judge could express your punishment in terms of years of delay: “Due to your conviction for grand theft auto, your retirement age has been raised from 65 years of age to 68 years of age. May God grant you the strength to provide for yourself for those three extra years.”

As usual in economic policy, most complaints can be handled by toggling the dials. The punishment is too light? Increase it. The punishment’s too harsh? Decrease it. You’ve already run out of Social Security benefits? Then raise the age of Medicare eligibility. You plan to live fast and die young? Then take away current benefits — SNAP or Medicaid — instead of future benefits.

I call this approach “austerian deterrence”: stopping crime by spending less taxpayer money. And it’s a proverbial no-brainer. In the words of Chandler Bing, “Could austerian deterrence be any easier? Could it be any cheaper?”

If you believe redistribution exists primarily to handle externalities rather than help the needy, you have reason to be nervous. But this belief is really quite silly. If the main point of redistribution were to stop crime and revolution, governments would target healthy young males, not the sick, the elderly, and women and children. But it is these four groups that receive almost all government largesse.

The animating idea of the welfare state is that the government guarantees a tolerable standard of living to everyone. As a result, “the poor” aren’t really poor and “the indigent” definitely aren’t really indigent. Implication: As long as the welfare state exists, monetary fines are a viable punishment for almost every citizen. What the government has given, the government can take away. Or to be more precise, what the government has promised, the government can withhold.

Why isn’t austerian deterrence already widely practiced? The only credible answer is selective squeamishness. Putting young men in jails with high rates of sexual abuse? Tough luck. If you can’t do the time, don’t do the time. Taking away young men’s Social Security benefits? Monstrous! A flagrant violation of basic human rights! It’s a classic case of the unbearable arbitrariness of deploring that pervades human societies.

Still, the harsh reality is that the welfare state is out of control and only austerity can save us. Since austerity is on the horizon anyway, why not start with the lowest-hanging fruit? Austerian deterrence really will punish crime and cut the deficit at the same time. We ought to do it.

* What about criminals who are extremely likely to keep re-offending? Simple: A truly optimal fine factors in the expected cost of future crimes, not just the observed cost of past crimes.

** Alternately, you could use corporal punishment, but that’s a separate issue.

HT: Thanks to one of my sons for giving me this idea. But responsibility for embracing it rests on me alone.