18 Aug 2009

Wouldn’t Rich People Go On Murder Sprees In a System of Private Law?

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In the previous post, I relayed some (good) objections from a reader of my pamphlet [.pdf] describing a stateless society. One of the objections went like this (paraphrasing): “In Murphy’s vision, ‘crimes’ are actually codified contractually, and the punishments are typically monetary. So that means rich people could go on killing sprees, and just pay off the families of the victims.”

Back in 2002, I wrote an essay for the site Strike-the-Root where I took this objection head on. I think many readers will be surprised at the power of free markets to solve such problems. Remember, the good economist doesn’t stop at Step 1; he follows the thought experiment out to its long-run effects.

Without further ado, here is the excerpt from an essay I wrote in 2002:


…This issue has consequences for the stateless society. A typical objection to a private legal system based on restitution rather than retribution, is that rich people could commit crimes with impunity, since they could easily afford the “fines.”

In the first place, this objection overlooks the fact that right now rich people (not to mention politicians) literally get away with murder, through direct bribery or other unsavory mechanisms. At least in market anarchy, the payment would be made in public.

But there is a more sophisticated response to the objection. Let’s take the caricature to the extreme, just to prove a point. Let us suppose that, in a hypothetical anarchist society, the only punishment for murder is a $1,000 fine. What would happen in such a world?

The statist recoils in horror at the thought: Why, Bill Gates could slaughter guests at a cocktail party to reenact his favorite scenes from Clue!

Well, he could, but how many people would go to his next party? Indeed, how many people would deal with him at all after such horrific behavior? People can still condemn the immoral, even in the absence of strict “official” sanctions.

But even these arguments miss the truly intriguing angle. If it’s legal for Bill Gates to kill, then it’s also legal for others to kill Bill Gates. After his homicidal conduct, outraged guests could take up a collection. Once they hit $1,000, they could afford his murder.

Of course, the analysis can’t stop there. Rich people and other public figures would alter their wills to reflect the new circumstances. In the event of their murder, people could establish trust funds to finance revenge upon their killers. Soon enough, people would find that the “official” sanction of $1,000—which is clearly below the level that would be set in an actual private system—would be supplemented with other retaliatory costs. It would be incredibly reckless for anyone, even the rich, to engage in murder sprees.

And what about the pauper, who can’t afford bodyguards or setup trust funds? Well, who wants to kill such a person? Is it really worth $1,000? Keep in mind, we are assuming that every killer is fined, which is different from the present system in which killers serve jail time only in a fraction of the cases. For a simple example, there would be virtually no robbery homicides. It would defeat the purpose to mug someone and shoot him, if the mugger knew he’d be out $1,000 for his crime.

This sort of “economist” talk will surely cause eyes to roll. Skeptics may point out that people commit crimes for all sorts of reasons, and that pecuniary motives do not determine an individual’s conduct. This is true, but in the aggregate, it would certainly make a difference if people knew they’d be fined (however lightly) for every crime. After all, women consider many factors when deciding to have a baby. But surely the welfare state leads to far more births than would otherwise have occurred.

Of course, the commodification of man would do the most good in the arena of politics. If government officials could only be made to feel even a fraction of the human cost of their actions, their worst excesses would be curtailed. Imagine if Harry Truman viewed Japanese civilians, not as his enemy, but as pieces of property. In that case, Hiroshima would never have happened; the residents could have offered a perpetual stream of millions of dollars as ransom on their continued existence.

But no, such a scheme would never have worked. The tender hearted American voters would have vomited at the thought of their fearless leader extorting protection money from helpless women and children. Why, that would be tantamount to slavery! How crass! How inhumane!

So instead Truman nuked them all to smithereens.

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