Crime Control through Private Enterprise

By Benson, Bruce L. | Independent Review, Winter 1998 | Go to article overview

Crime Control through Private Enterprise


Benson, Bruce L., Independent Review


Israel Kirzner (1997, 62) explains that entrepreneurial discovery of opportunities gradually and systematically pushes back the boundaries of ignorance, thereby driving down costs and prices while increasing both the quantity and the quality of output. In the public-sector production of crime control, ignorance abounds, costs are high and rising, and both the quality and the quantity of the effective output of the criminal justice system dearly have room for improvement. A 1976 National Advisory Commission on Criminal Justice Standards and Goals report notes that

this country has become the unwilling victim of a crime epidemic. The

present seriousness of the disease has outstripped even the most pessimistic

prognosis. Coupled with a steadily rising numerical frequency of crimes is a

savage viciousness that has tendered the American public almost immune from

further shock....

In a valiant but vain attempt to stem this massive tide of criminality,

government officials, scholars, politicians, and a vast array of other

professionals have responded with plans, programs, and projects all designed

to reduce crime.... [A]lthough many of these programs were improvements over

outdated practices, crime, the cost of crime, the damages from crime, and

the fear of crime continued to increase.

In such circumstances, turning the entrepreneurial discovery process loose on crime control may have real advantages.

Others have also recognized that private-sector entrepreneurs can discover better ways to control crime. Perhaps surprisingly, the preceding quote from the 1976 report anticipates the suggestion made here, concluding that

One massive resource... has not been tapped by governments in the fight

against criminality. The private security industry.. offers a potential for

coping with crime that can not be equaled by any other remedy ... [T]he

private security professional may be the only person in this society who

has the knowledge to effectively prevent crime.

This conclusion had no noticeable impact on public policy toward crime. A 1985 National Institute of Justice (NIJ) report (Cunningham and Taylor 1985, 1-3) explains that despite continual increases in taxpayer dollars spent on the criminal justice system, "neither local, State, nor Federal resources had seriously affected the problem of crime" and that yet still "conspicuously absent from... crime prevention programs... is the input of the private security industry."

This statement is not completely accurate. Although recommendations and resources from the private security industry remain absent from most public policy programs, private citizens' own programs are relying on entrepreneurs in ever-increasing numbers in order to obtain new and innovative crime-control services (Benson 1990, 1996b). Indeed, as Lawrence Sherman (1983, 145-149) observes, "Few developments are more indicative of public concern about crime--and declining faith in the ability of public institutions to cope with it--than the burgeoning growth in private policing.... Rather than approving funds for more police, the voters have turned to volunteer and paid private watchers."

A typical policymaker's question is "What can government do to reduce crime?" but a better question is "What is the most cost-effective way to reduce crime?" I maintain that the answer must include a significant increase in private market provision of the four Ps of crime control: prevention, pursuit, prosecution, and punishment. To frame this argument I shall discuss examples of current markets for the four Ps, the alleged failings of such market activities in crime control, and policy alternatives to encourage more entrepreneurial discovery.

Nature and Growth of Markets in Crime Control

Market provision of goods and services to facilitate all types of crime control activities is quite substantial, but much of it is undocumented. …

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