The Market for Prisons

One of my friends posted this story about a federal investigation into the Lauderdale County Juvenile Detention Facility:

Officials in Lauderdale County, Mississippi, have operated “a school-to-prison pipeline” that violates the constitutional rights of juveniles by incarcerating them for alleged school disciplinary infractions, some as minor as defiance, the U.S. Department of Justice said Friday.

My friend blamed the conditions on the free market, namely for profit prisons. I had to contest this fact because for profit prisons are only able to enjoy profits because of state interference in the market. My take on the issue is to rely on a free market instead of allowing the state to run the justice system. As I expected he disagreed and stated disbelief in a free market being able to provide prisons. While I agree with is assessment that the free market would likely be a poor provider of prisons the reason I see for it is different. He believes prisons couldn’t be supplied by a free market due to the sheer expense of building cages, hiring guards to watch the cages, feeding the caged individuals, etc. whereas I believe prisons wouldn’t be supplied by a free market because there isn’t a demand for them.

The idea that imprisonment is a form of justice baffles me. Most people want to be compensated when they’re wronged. If somebody’s car is damaged in an accident they want their car replaced and any legal and medical expenses covered. When their television is stolen they want it replaced. I haven’t met a person yet who, after being victimized, wanted to pay more money to put their aggressor in a cage and pay for that aggressor’s food, water, and medical expenses. That’s what the prison system does, it makes victims into victims again as a portion of their wealth is stolen to pay for the construction, maintenance, and operation of prisons. What’s worse is that victims often of uncompensated for their losses. Is that what people really want? To be forced to pay when they’re victimized? History would say otherwise.

History is peppered with successful stateless societies. Two of the more famous instances of such societies are medieval Ireland and Iceland between the years 1000 and 1300. Medieval Irish law is noted for being created and executed privately [PDF]. While there were kings of sorts in Ireland during that period they held no power to create or execute law. Instead individuals were charged with creating and executing law and this is likely why the legal system in Ireland revolved around compensation instead of imprisonment. Iceland’s period of statelessness is also notable for the compensatory nature of their laws. Like Ireland, Iceland had no central coercive authority dictating law and enacting punishment, instead such matters were left to individuals living on the island. The legal system revolved around godi who were representatives. A godi held no actual power as association was voluntary instead of forced within arbitrary borders. Any individual could chose any godi to represent them and thus more successful godi were ones who best delivered justice in the form of compensation for is constituents’ losses.

In the absence of state coercion dictating laws and punishment societies have tended towards compensatory models. Compared to caging individuals in prisons getting compensation is relatively cheap and we know that markets tend towards efficiency. Therefore a compensatory model has the advantages of getting compensation for victims and is relatively inexpensive. If it wasn’t for the state dictating that aggressors and violators of state decrees be caged we would likely not have any market for prisons and thus people are correct when they say a free market would be a poor provider of prisons. Markets provide for demands, if there is no demand then there is no market.