The Economics of Crime and Punishment

The Economics of Crime and Punishment

The Economics of Crime and Punishment

The Economics of Crime and Punishment


In the summer of 1972, the American Enterprise Institute for Public Policy Research and the Reston Economics Program of the Virginia Polytechnic Institute and State University assembled in Washington, D. C., a conference on the economics of crime and punishment. This volume contains the papers prepared for that conference, and the comments of discussants of those papers.

The conference participants were largely drawn from institutions of higher learning and most were economists, although other disciplines of the social sciences and legal scholarship were also represented.

The conference sought to examine the uses of economics, and the limits on those uses, in the treatment of crime and crime prevention systems. Confronting points of view were aggressively represented, discussion was hard and sharp, and no quarter was given. Participants were required to offer logical and empirical defenses for their positions. Some differences were reconciled and some were clarified. And all of it was done in an ambience of intellectual good faith.

Economics has been conventionally defined as a discipline that studies the allocation of scarce means among alternative ends. The same idea has been more recently and more comprehensively expressed by saying that it is the study of the principles of constrained choice.

It is because resources are scarce that choice is constrained. When resources are put to some given use, other possible uses to which they might have been put are foregone. Therefore, every choice, once made, is costly, and the cost consists in those foregone uses. Any resource which is not scarce is "free"; there is no cost associated with any use of it and the calculus of choice does not arise with respect to its use.

Economics has something to say about any institution that is required to make choices, although usually it deals with the choice problems of "households," including individuals, firms, and agencies of the public sector. Although it treats maximizing choice principles for individual persons and firms, it really has not very much to say about individual choice. This is not to say that the understanding of individual behavior is uninteresting, but only that it is the proper object of study of other disciplines. The treatment of individuals by economics is, however, only an analytical and didactic device, employed as a building block in the construction . . .

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