Prison stats make another new record

I saw this from the New York Times yesterday. Originally I wanted to put up a post that asked the following question: For how long will America continue to set new records in the realm of incarceration and punishment trends without a serious call for social change? These record breaking new descriptions of the current prison crises come out year after year. Every year we break new boundaries and every year we exceed everywhere else. How long can this go on? I don’t think there’s a good answer for this question so I was hesitant to put up this post.
In the meantime I noticed Jeremy (via facebook) and Brian seem interested in the topic so I thought I’d comment on one point that Brian makes:

This understates the cost of prison because it does not factor into what the prisoners could add to the economy if they were gainfully employed. The actual costs to society are significantly higher than what is spent on prison.

While I think Brian’s intuition is right – the costs of prison are understated – I’m skeptical that this argument holds ground in the current debate. The traditional response to this claim is what’s called “the incapacitation effect.” In other words, if the costs of prisons are understated because those individuals would otherwise be productive in the economy, then the opposite may also be true. Inmates would be committing more crimes were they not incarcerated, thus the benefits of prisons may also be understated. At this point its an empirical question of one unknown counter factual scenario against another. The little available evidence that we do have often points to the fact that current inmates are better characterized as career criminals than they are one time offenders. Researchers are more likely to believe that the benefits of incapacitation are more understated (because of incapactiation) than the costs of a smaller labor pool are understated.
On net I still agree with the broader claim that the costs of prisons are understated but not because of the reasons above. Instead I think the greatest cost to prison is the debilitating effects that social provision of criminal justice has upon innovation and entrepreneurship in criminal justice.

Smoking bans lead to drunk driving.

Productivity Shock posted a great abstract on this topic. I would guess that any number of the following might be true and also contribute to the phenomenon in question, but might not be detectable by the existing data.
1. Bumming out cigarettes is more likely when you have to go outside to smoke because smokers are put in a more socialized setting — smoker solidarity. Smokers have to stock up mid-way through the night, thus driving is increased.
2. Most cities don’t let you take your drink outside when you go outside for a smoke. This resulted in a date rape drug problem in New York when women left their drinks unattended. Tobacco companies also pushed smokeless tobacco campaigns because it was so inconvenient to go outside of large night clubs. In addition to the above my guess is that smokers are more likely to order shots and hard spirits rather than beer with smoking bans because they can drink their drink go out and smoke, come back and repeat. My guess is that their on average more drunk than they otherwise would be.
3. The costs to leaving a bar in search of another (better) bar are lower with smoking bans. You’ve stepped outside, you don’t have a drink in your hand. The costs of hopping in your car and checking out another bar to inform your social group about once you’re there are lower than if you’d stayed inside. In other words, it’s not just traveling to one bar across the border that’s more likely with smoking bans but also multiple different locations in a single night – again on net more driving.

Why aren’t there any folk songs for Capitalism?

Pete Boettke recently asked this puzzling question along with another tough one: “why does capitalism produce yet fail to inspire, while socialism inspires, yet fails to produce?” in class and blog.
I’m in the midst of reading Property and Freedom by Richard Pipes as part of an upcoming Liberty Fund conference. I think his first 60 pages is relevant to these questions. Pipes begins the text by surveying how several different thinkers have understood and explained the phenomenon of private property through history.
In different historical contexts people think of property positively and negatively in turn. When held in a negative light, thinkers are less concerned with the nature of property rights so much as they are concerned with the allocation and distribution of property throughout society.
With this in mind I’d like to put forward a theory: the costs of identifying a hypothetical counter factual is higher than attributing an observed scenario as a relevant counter factual. Let me explain. We like to say that a rising tide lifts all ships. In other words the poor may be worse off compared to the rich today, but over time the benefits of free-trade have made today’s lower classes enjoy levels of wealth unreachable by even the most wealthy citizens of the past. What if the overly romantic notions of socialism and the pessimistic attitudes towards capitalism can be explained by the fact that poor people face a marginally different cost when they are looking for a basis to compare themselves with. It seems cheaper in terms of thinking energy to look at the wealthy classes and say “why couldn’t that be me?” rather than learn about past populations and realize “that would have likely been me.”

Drew Carey on the Agitator

The Agitator linked to this Drew Carey video about the conditions of America’s middle class. I was unsatisfied with how the video explained the decline in morale among the economically thriving middle class. It seems to blame the media – misery sells. I thought it was worth the time to summarize John Nye’s explanation that I heard at this past summer’s IHS Social Change Workshop. I put the following comment up at the Agitator:
John Nye has one of the most compelling explanations for the paradox of happiness. At one point in time the wealthier people report higher levels of happiness than the poorer, but over time despite being wealthier, people in general report less happiness. We seem to yearn for the good ol’ days. This is different from being barraged by pessimistic news stories. Nye claims that the relative prices of the most luxurious or “positionary” goods have gotten more expensive. Yes general items are more accessible to everyone, but there’s only so much land space in Maui or Beverly Hills to go around. Some portion of the economy is subject to scarcity inherently more than the rest. These are positionary goods, goods whose value is held high specifically because they are scarce. When we are young we can think about how cheap buying a car will be by the time we are fifty, but we fail to realize how much more we may have to pay for the beach house of our dreams because so many other people can afford it too.