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SETTING THE PRICE: CRIMINAL JUSTICE AND THE ECONOMY

ALL RULES OF CRIMINAL JUSTICE ARE, IN A SENSE, POLICY RULES; THEY ALL have some purpose, some goal, some point, some notion of good and bad, of efficient and inefficient. If we enforce the rule, we do it in order to move an inch closer to the goal, whatever that may be. The penal code is not a random collection of rules; it is a catalogue of values, policies, attitudes, ideals—about property rights, the integrity of the body, morality, orderly behavior, and so on. Many of the rules and goals are “economic” in some obvious sense of the word. Securities fraud is a crime; it is also against the law for the butcher to put his thumb on the scale.

In fact, all criminal justice, whatever else can be said about it, is economic in one crude, primary sense: its rules are attempts to fix prices or ration behavior. Suppose it is a crime to shoot deer out of season; the punishment is a good stiff fine. One way to describe the law is to say that it tries to raise the price of shooting deer. If it succeeds, it rations, or controls, deer hunting. If the price is high enough, nobody will shoot deer (or almost nobody). Stiffening a penalty, then, is like raising a price. As rationing gets tighter, control is greater—and demand for the behavior, other things being equal, falls off. w

We can apply the same analysis to the whole criminal code, even laws against murder and rape. In a sense, the codes set prices, and regulate the supply and demand of murder and rape. It seems cold-blooded to look at homicide law in this way; most people would say they want no murders at all, and if you asked them, they would say, vehemently, that they would not license murder, at any price. But in one sense that is exactly what the penal code does; it fixes a price. Certainly, there are other ways to understand why there are laws against murder and rape, and what makes them tick. But the price-rationing aspect is worth keeping in mind.

This chapter is not about murder or rape. It is about other aspects of the system, which are economic in a narrower, more literal sense. Criminal justice had a role, and an important role, in building a wall of protection for the economy, in regulating the market, and in safeguarding and encouraging a particular distribution of goods and services, and a particular form of economic life. Like the legal system in general, criminal justice did not simply protect an aged and creaking status quo; rather, it channeled and regulated change, so that change occurred only in certain approved ways, and not in others.

Economic law and economic regulation presupposed this particular society. They reflected the emphasis on individual property rights—but property rights valued for their dynamic potential, not as ancient, aristocratic, fixed markers of status. Economic law reflected the actual economy: growing, shifting from agriculture to manufacturing in the course of the century; and it reflected public fears of too much concentration at the top (the antitrust laws), and shiftless swindling at the bottom. At the beginning of the century, law reflected a boundless optimism, a sense of endless horizons; by the end of the century, themes of conservation, pinched resources, a shrinking pie, had crept into economic law. This chapter will explore some of these themes.

Theft

Perhaps the most primitive and basic rules in the criminal justice system were those that protected property rights. It is a crime to steal what belongs to somebody else. The laws against theft, larceny, embezzlement, and fraud are familiar friends. People may not know every technical detail, but they get the general point. Probably all human communities punish theft in one way or another; it is hard to imagine a society that does not have a concept of thievery, and some way to punish people who help themselves to things that “belong” to somebody else.

When we speak of “property” it is not a bad idea to put quotation marks around the word. This serves to remind us