Freedom, Society, and State - Ludwig von Mises Institute

mar k e t p r inc i pie s tothe prob I ern 0 fag gres ­
sion provides a built-in rehabilitiation system.
This is in sharp contrast to governmentrun
prisons, which are little more than
"schools for crime," where young first
offenders are caged with hardened criminals
and there is no incentive or opportunity for
rehabilitation.(91)
S uchi s the a n archis t 's view 0 f the n p r i son s y s ­
tern." Could it work? Jails are very expensive operations
and the feasibility of such a system would depend
largely on whether the earning power of criminals would
be enough to (a) make reparations, (b) provide a profit
for the penal agency and (c) leave enough left over to
support the criminal and, perhaps, his or her spouse
and children. In some cases the answer would no doubt
be yes.(92) But since criminals are not generally
known for their marketable skills, it is debatable
whether profit-oriented prison companies could sustain
themselves. But market arrangements are amazingly
flexible. It could well be that insurance companies
would either operate penal agencies themselves or provide
some of the operating funds to particular penal
agencies on a contractual basis. The interesting thing
about this possibility is that it would probably not
require higher insurance premiums. This is because the
ability to confine dangerous or unreliable criminals
would drastically reduce the default rate on restitut
ion payments. Those insurance agencies that were not
able to confine such criminals would no doubt find them
evading payments by "skipping town." Since it would be
forced to charge premiums high enough to cover the loss
from its high default rate and the cost of reapprehendi
n g thesecrim ina Is, itis qui t e pos siblethat prem i urn s
charged by insurance companies operating prisons would
be the same as, or even lower, than those that did not.
It is a'lso conceivable that companies like Holiday Inn
and Best Western might find it profitable to diversify
into this area. Or, if prisons were in chronic financial
difficulty it might be possible to distribute the
"excess" in asymmetric cases among. these companies
instead of awarding them to charities. No doubt other
possibilities could be found.
A stateless society, as its critics point out,
would no doubt contain risks. But that is the nature
of life. Anarchy is a method of social organization.
It is not a utopia. Crime would not completely disappear.
People would still be robbed and murdered. al-
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