Time to Close Our Prisons?

Winston Churchill asserted that “the most unfailing tests of the civilization of any country” was simply “the mood and temper of the public in regard to the treatment of crime and criminals”.

Which countries today fail Churchill’s test? Who wins the prize for barbarism because it imprisons its own people most often? As a kid, the answer was always North Korea, or Russia, or China. Today it might be Iran? Or a failed state like Somalia?

An American Gulag

The chart below shows that the winner of this dubious prize is the United States. We have more than two million citizens behind bars, the highest absolute and per capita rate of incarceration in the world. We imprison ten times more of our citizens than any Scandinavian country does. Nor are we especially evenhanded about it: black men, who are 6-7% percent of our countrymen, are half of our prisoners.

The failed war on drugs is a big part of the problem. Nearly half of all men and sixty percent of women in federal prison were convicted of drug crimes. In state prisons, it’s less — about a quarter of all women and 15% of all men.

For America to reclaim its title as the Land of Liberty we should treat drugs as a massive public health problem and close nearly all of our prisons. Even General Barry McCaffrey, a retired commander of our war on drugs, concedes that “we have created an American Gulag“. Moreover, recent research suggests that prisons are a huge waste of money.

The war on drugs began in 1972. That year, a young reforming liberal economist who was already emerging as one of America’s most astute social commentators wrote in Newsweek Magazine:

“Legalizing drugs would simultaneously reduce the amount of crime and raise the quality of law enforcement. Can you conceive of any other measure that would accomplish so much to promote law and order?

“But, you may say, must we accept defeat? Why not simply end the drug traffic? That is where our experience under Prohibition is most relevant. We cannot end the drug traffic. We may be able to cut off opium from Turkey but there are innumerable other places where the opium poppy grows. With French cooperation, we may be able to make Marseilles an unhealthy place to manufacture heroin but there are innumerable other places where the simple manufacturing operations involved can be carried out.

“So long as large sums of money are involved — and they are bound to be if drugs are illegal — it is literally hopeless to expect to end the traffic or even to reduce seriously its scope. In drugs, as in other areas, persuasion and example are likely to be far more effective than the use of force to shape others in our image.

We have more than two million citizens behind bars, a rate ten times greater than any Scandinavian country.
Black men, who are 6-7% percent of our countrymen, are half of our prisoners.

The author was of course Milton Friedman — the twentieth century’s preeminent public intellectual. (I disagree with him a lot but, as George Schultz used to say, “everyone disagrees with Milton when he’s not in the room”). Plainly the criminalizing drugs has not reduced the number of addicts appreciably if at all and has promoted crime and corruption. Today, the problem has moved to opioid addiction, thanks to an unholy three-way alliance between ethically-challenged pharma companies like Perdue (inventor of oxy), innovative retailers of low cost Mexican heroin (many from the same village as described memorably by Sam Quinones in Dreamland, and SSDI, which gives people on disability a Medicaid card that can easily obtain opioids with a street value of $10,000.

Decriminalizing Drugs

Federal policy has created the war-on-drugs complex: a multi-billion industry that is passionately defended by those it benefits. If Columbian drug lords donated money directly to our politicians, the public would revolt. Thanks to policies that create the black market for drugs and harsh minimum sentencing guidelines — the drug lords have prison guards unions to do their work for them. If we destroyed black markets, drug lords and the political power of prison guards would both quickly evaporate. Which is why drug lords and prison guards hate legalization.

Publicly subsidizing drug addicts is not a glorious policy — but neither is holding the world record for tossing poor people in jail while we effectively finance global narco-terrorism. Delivering cheap, safe, and legal drugs to addicts reduces AIDS transmission and destroys the market for street heroin and cocaine/crack. Taxed and regulated recreational drugs open the possibility of education and treatment. It saves people and saves government a boatload of money.

We need to give addicts safe, cheap, and medically supervised access to narcotics as well as recovery help. Register at the clinic and get your fix at very low cost. At least we know every addict in town. We would destroy the heroin cocaine cartels — and Perdue as well. It is hard to sell street drugs when safe drugs are available at low cost.

I recognize that legal drugs can be extraordinarily damaging. My father was drunk on cheap scotch and smoked four packs of cigarettes most days of his foreshortened life. But we would not have been better off as a country, nor he better off as a person, if we had thrown him in jail for being addicted to alcoholic and tobacco.

As obnoxious as it seems, we are far better off regulating recreational drugs the way we do alcohol and tobacco than we are criminalizing them. We can ensure purity, control toxicity, and tax sales heavily. It will wreck the economics of small time illegal producers (how many people grow their own tobacco to avoid paying taxes? Roughly none). We can and should spend the revenue that results on drug education, treatment, and prevention but we should not criminalize drug use. As public policy, prohibition is an illusion — it prohibits nothing.

Conservatives, parents, and plenty of others worry that making drugs available will increase drug use. It doesn’t usually work that way. Three centuries ago, another free market conservative, Friedman patron Adam Smith, pointed out that demand drives supply:

“It is not the multitude of ale-houses . . . that occasions a general disposition to drunkenness among the common people; but that disposition, arising from other causes, necessarily gives employment to a multitude of ale-houses.”

Drug addiction is ugly. Taking the profits out of the drug trade by making drugs available to addicts and decriminalizing drugs isn’t pretty — but it’s smart.

The alternative, our 45 year war on drugs, has produced a complete train wreck: deaths from illegal drugs now exceed deaths from car crashes or guns. Illegal opioids have spread rapidly but are especially concentrated in the Midwest, where they show few signs of improving popular political judgement. It is too simple to say that drug addicted counties in Ohio and Pennsylvania gave us Donald Trump, mainly because his margin of victory was so small that the election outcome can be explained with dozens of variables. Also because blue New England is as drug addled as the midwest.

Race and Gender

Men have born the brunt of the war on drugs. We wonder why seven million men in their prime working years of 25-54 are not seeking work in a full employment economy, consider that a third of them have criminal records. Ninety percent of US employers now check databases of criminal records when hiring for at least some positions.

The war on drugs does not affect all men equally — nor even in proportion to their drug use. According to the federal Household Survey, illicit drug users are 72% white (63% of the population); 15% black (13% of the population), and 10% Hispanic (17% of the population). Whites are the race most likely to use illegal drugs, Latinos the least. But blacks constitute 37% of those arrested for drug violations, 42% of those in federal prisons for drug violations and 58% of those in state prisons for drug felonies. Hispanics account for 21%.

Blacks are more likely to be arrested for drug use, more likely to be convicted, and more likely to earn long sentences. Partially as a result, a tenth of all black men between ages 20 and 35 are now in jail or prison. One in three male African-Americans in their 30s now has a prison record, as do nearly two-thirds of all black male high school dropouts. These numbers and rates are incomparably greater than anything America achieved at the height of the Jim Crow era.

We have not only over-criminalized drugs, we have effectively criminalized mental illness. Today, one in six U.S. prisoners is mentally ill. Many suffer from serious illnesses such as schizophrenia, bipolar disorder, or major depression. There are three times as many men and women with mental illness in U.S. prisons as in mental health hospitals — and the rate of mental illness in the prison population is three times higher than in the general population. According to the detailed Human Rights Watch report, Ill-Equipped: U.S. Prisons and Offenders with Mental Illness, prisons are dangerous and damaging places for mentally ill people. Other prisoners victimize and exploit them. Prison staff often punish mentally ill offenders for symptoms of their illness – such as being noisy or refusing orders, or even self-mutilation and attempted suicide. Mentally ill prisoners are more likely than others to end up housed in especially harsh conditions, such as isolation, that can push them over the edge into acute psychosis.

Our drug penalties bear no relationship to the harm of the underlying drugs. The 2014 Surgeon General’s report estimates that cigarette smoking causes more than 480,000 deaths each year in the United States — a number widely considered low because it considers deaths only from the 21 diseases that have been formally established as caused by smoking. Alcohol kills another 30,000 (and is implicated in many drug-related deaths).

By comparison, drug overdose is now the leading cause of accidental death in the US, with 52,404 lethal drug overdoses in 2015. Opioid addiction is driving this epidemic, with 20,101 overdose deaths related to prescription pain relievers, and 12,990 overdose deaths related to heroin in 2015. Opioids are up 4-6X in less than a decade. Marijuana kills zero, unless you count people who die in prison for using or selling it. In short, tobacco and alcohol kill ten times more people than do illegal and prescription drugs.

Our war on drugs is truly a new prohibition, except that the victims are poor men of color, not Irishmen getting busted at the local speakeasy. Filling our prisons to overflowing this way solves nothing. It destroys families that are already precarious and is really expensive. Busting and convicting a single drug dealer costs about $150,000. Housing and feeding the prisoner for five years is is another $200,000. Plus you have to build the prisons and pay higher welfare benefits to the women and children left behind — typically a multiple of the cost of incarceration. Then you pay again when kids without strong families find what they need in gangs. Yale is far cheaper than jail: you can provide treatment and education for 100-200 people for the cost of imprisoning just one.

Do Prisons Make Economic Sense?

A recent academic paper by Peter Salib, a JD PhD from the University of Chicago argues that prisons are economically very hard to justify. His paper, a candidate for the most provocative academic work of the year, considers four costs of incarceration:

Administrative costs: housing, guarding, feeding, recreation, and medical care.

Lost earnings: the economic value of the prisoner who usually cannot work in prison, and if they can, they cannot earn much. Worse, the stigma of prison contributes to long-term earnings losses. This limits restitution to victims: every dollar not generated by a criminal is a dollar that cannot be given to a victim.

Perverse incentives: high administrative costs creates incentives for private prison companies, unionized guards, and others to fight the interest of society and promote high levels of incarceration.

Bundling: prison combines many punishments: it destroys wealth, inhibits movement, restricts interaction, applies psychological pressure. This is wasteful because it requires all of these things, not just some of them.

The paper argues that we fail to get much bang for our buck on all four dimensions:

“Prison performs poorly with regard to all of the above-discussed economic goals of criminal punishment. First and foremost, imprisonment—especially as currently employed in America—produces massive social costs. These costs are both administrative and inherent. It is extremely expensive to keep people in prison, and when we do so, we destroy enormous amounts of social wealth in the form of prospective income. (ed: instead of costless wealth transfers such as fines and restitution).

“Second, prison creates significant perverse incentives. Because prison is expensive to administer, the prison system puts significant wealth up for grabs by those other than the victims of bad acts. This creates substantial incentives to ensure that the rate of imprisonment remains high.

In California for example, the prison guard union is now a political powerhouse. The union has more than 100 employees and 30,000-members. It retains a team of savvy lawyers and first-rate lobbyists and is known state-wide for its political war chest and willingness to use it (often by lobbying for harsher penalties and more prisons).

“Finally, prison is a clumsy tool for achieving optimal deterrence. This is because it unnecessarily bundles together various kinds of nonmonetary sanctions. Prison imposes private costs on bad actors by destroying their wealth, inhibiting their freedom of movement, inhibiting their freedom of interaction, creating psychological pressures, and many others. In striving for optimal deterrence at the lowest social cost, it will often be desirable to impose some, but not all, of these private costs simultaneously. Prison thwarts such attempts.

The author then proceeds to imagine what efficient punishment might look like and suggests that it needs two characteristics.

“First, instead of locking bad actors up where they are unable to generate any wealth, the efficient system would allow most criminals to live as everyone else does, in apartments or houses in cities and towns. The system would then force these bad actors to work in their highest-value employment. It would transfer a significant bulk of the wages generated by such work to some combination of the bad actors’ victims and the government. It would also impose movement restrictions and monitoring on working bad actors to avoid further crimes.

Second, the efficient system would fill the gap between the criminal’s net present worth and the costs demanded for optimal deterrence with a non-monetary sanction other than prison. From an economic standpoint, it would not much matter what non-monetary sanction the efficient system use. The only constraint would be that the chosen non-monetary sanction could be applied in quantities sufficient to achieve optimal deterrence. If our jewel thief must pay $100,000 to be optimally deterred but has only $50,000 in cash, the chosen monetary sanction must merely be capable of making him worse off by the equivalent of another $50,000….History presents a startling array of options, including: flogging, pillory, running the gauntlet, tarring and feathering, branding, and many more. Modern judges have concocted similarly creative sanctions, including: forcing criminals to publicly carry embarrassing signs, mandating that they sleep in doghouses, or requiring them to undergo unwanted haircuts. Many non-monetary sanctions could impose private costs without needlessly destroying societal wealth.

The paper ends by confronting a series of objections.

Slavery. Isn’t forced work, slavery and banned under the 13th Amendment?

Nope. We banned “slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted..” Use a gun, work like a dog.

Morality. Aren’t these alternative punishments immoral because of its similarities to systems of indentured servitude and slavery?

There is a better argument that the mass incarceration of minorities is a new kind of slavery. Besides, prisoners work now — they just are not paid much or allowed to work outside of prison, where their skills have more value. Finally, this paper is about efficiency, not equity — but even considering fairness, most western countries regard labor as fair punishment for a crime.

Equity. Doesn’t the efficient system treat the rich and poor differently?

It might. It is a design problem. We need to make the subjective expected cost the same for rich and poor. Given the diminishing marginal utility of money, this means massive fines for the rich to make sure that the magnitude of punishments are equal even if the forms are not.

Legality. Isn’t this cruel and unusual punishment?

Well, even Scalia opposed flogging, so yes, there are some limits. Punishments designed to humiliate are probably safer than those designed to impose permanent physical damage. There is a lot of jurisprudence in this area, with very specific requirements for avoiding the cruel and unusual threshold.

Practicality. Isn’t prison necessary to confine and incapacitate bad guys to keep them from committing more crimes?

In some cases, yes. “There are probably bad actors who, if allowed to live outside the secure confines of prison, would continue committing bad acts, despite reasonable supervision and controls. However, the proportion of bad actors who meet this description is likely surprisingly small. It is especially small compared with the proportion of criminals who are currently sentenced to imprisonment.”

Evidence comes from paroled inmates, who work under restriction during their period of parole. Prisoners on parole are less likely to commit post-release crimes than those who are not, suggesting that active monitoring of parolees has real deterrent value. In a world of GPS bracelets and biometric scanners, the restrictions on an individual’s movement can be very tightly controlled.

Stigma. Doesn’t matter: employers are still not going to hire convicts.

So make it illegal for them to ask and hard to discover. Several states have passed “ban the box” laws. If someone is qualified for the job, their past should not be relevant. And yes, you would make exceptions for jobs with access to money, potential for embezzlement, etc.

Incentives. You cannot confiscate wages or the bad guys will stop working.

True. Even bad actors must retain some of their earnings.

Salib concludes

“The central lesson of this paper is singular: Prison is an inefficient method for deterring crime. It unnecessarily destroys social wealth at the very same moment when other areas of the law seek to maximize it. By preventing bad actors from generating wealth, prison robs victims of their recovery and impoverishes society as a whole. The system creates other inefficiencies, as well. It generates enormous administrative costs, creates perverse incentives, and makes irreconcilable the goals of achieving optimal deterrence and minimizing social costs.

“But alternatives are conceivable. Rather than being locked away to rot, bad actors could be employed productively in the workforce. The gains of that employment could be transferred to victims and governments, while simultaneously serving as a deterrent cost. And to the extent that monetary transfers cannot achieve optimal deterrence, humankind is capable of inventing alternative nonmonetary sanctions to fill the gap. Such alternative nonmonetary sanctions might rightly be criticized from a non-welfarist moral perspective. But these criticisms often to apply with equal force to the current system. Where they do not, the question becomes when and whether efficiency should be sacrificed to other normative concerns.

“Taken together, then, these considerations present the question: Why have prisons at all?

Parts of this post appeared in Jam Side Down in 2007