NO WAY OUT: Crime, Punishment and the Limits to Power

November 23rd, 2012

(short excerpt from a long article) – Published on Real-World Economics Review RWER Blog, by Shimshon Bichler and Jonathan Nitzan, Nov. 21, 2012.

… Introduction:

In May 2011, the U.S. Supreme Court ordered the State of California to release 30,000 to 40,000 of its 140,000 inmates.[2] California’s prisons have become so overcrowded that the Supreme Court declared the situation unconstitutional. The decision was imminent. For nearly two decades, California, along with many other states, was busy getting ‘tough on crime’. In the early 1990s, the state enacted the ‘Three-Strikes Law’, which mandates life sentences for third-time serious crime offenders, and it pursued the country’s ‘war on drugs’ and other law-enforcement campaigns with increasing zeal. Soon enough, its prisons were overflowing at nearly twice their capacity. 

The United States is often portrayed as the archetypical liberal model. It is the world’s largest, most prosperous ‘free market’ and the greatest generator of profit on earth. And yet this very liberal haven is also the largest penal system in the world. There are now more than two million inmates in its prisons and jails and another five million on probation and on parole. If you add these two numbers together, you get a ‘correctional population’ of over seven million. This correctional population is the largest in the world – both absolutely and relative to the overall population – and it is also the largest the country has ever seen.

To some, this combination of market prosperity and intense punishment may seem puzzling. Many people intuitively expect crime and punishment to correlate with poverty, backwardness and deprivation; to be a feature of the Third World, not the First.

Knowingly or not, this expectation is grounded in the conventional separation of production from state and capital from power. According to the liberal version of this separation, accumulation breeds economic prosperity, and prosperity in the economic sphere reduces crime and calls for less punishment in the socio-political sphere. However, if we discard this separation and instead think of capital as power, and of capitalism as a mode of power, the puzzle disappears. The greater the capitalization of power, the greater the resistance to that capitalization and the larger the force needed to prevent this resistance from exploding. As profits increase to make distribution more unequal, the result is mounting resistance from below, and this resistance in turn leads to retaliation from above. The rising crime and intensifying punishment that we now see in the United States are key manifestations of this dialectic of capitalized resistance and retaliation.

The Questions:

The purpose of this presentation is to examine the issue of crime and punishment within the larger context of capitalized power, and specifically in relation to the limits of such power … //

… Georg Rusche:

Until the 1930s, these types of questions were never asked, let alone answered. The subject of crime and punishment was studied mostly by novelists, legal experts, doctors, psychologists, philosophers and moralists. It was rarely if ever dealt with by political economists, and it was certainly never studied scientifically.

The first to undertake this type of study was the German political economist Georg Rusche.[5] Rusche was born in 1900 and received his PhD in economics in the mid 1920s. He was interested in labour economics, and he also became involved in prison work. This background led him to contemplate the connection between punishment and the labour market. In the early 1930s, he was commissioned by the Frankfurt School to write a book on the subject, and in 1933 he produced a short article, titled ‘Labor Market and Penal Sanction’, where he spelled out his thesis. Six years later, in 1939, he published, together with Otto Kircheimmer, the full manuscript, titled Punishment and Social Structure.[6]

According to Rusche, crime and punishment were too important to be left out of political economy. They needed to be anchored in economic theory, he said, and they had to be embedded in the evolution of class relations and class conflict. What were the basic propositions the researcher should start from? Rusche offered four.

  • The first proposition – which today may sound like a liberal triviality – concerned the goal of the penal system. Crime consists of acts forbidden by society, and one of the purposes of the penal system, Rusche posited, is to limit and reduce those acts.
  • The second proposition – which nowadays may ring like a mainstream cliché, but back in the 1930s sat well with the materialist emphasis of Marxist analysis – had to do with Bentham’s ‘calculus of pleasure and pain’. In order to deter crime, the penal system needs to convince people that ‘crime doesn’t pay’; in modern economic parlance, we would say that it needs to make the expected pain from punishment greater than the expected gains from crime.
  • The third proposition identifies what we may call the ‘asymptotes of penality’. Most people disposed to crime come from the lower strata of society, where the conditions of life are the hardest. This fact means that in order to deter crime, the penal sanction must be worse than the living conditions of these lower strata. ‘If the prison doesn’t underbid the slum in human misery’, Rusche quotes Bernard Shaw, ‘the slum will empty and the prison will fill’.[7] In other words, the lowest living conditions in society set the upper limit of the penal system.
  • The fourth and final proposition concerned the rate of unemployment. Many factors affect the living conditions of the lower strata, says Rusche. But the most important by far is the labour market, and particularly the ‘excess supply/demand’ for labour, or the rate of unemployment. When there is ‘excess supply’, unemployment rises and wages decline, causing crime to increase and punishment to intensify. And when there is ‘excess demand’ and unemployment decreases, the opposite process is set in motion.

These observations, which Rusche says hold in every society, set the general boundaries of penality:

  • When labour is abundant, deprivation is close to its limits, so the unemployed can be deterred from crime only by the ultimate punishment: death. Rusche gives the example of China, where a huge reserve army of unemployed makes human life worth close to nothing. Under those conditions, he observes, it is common for captured criminals to be executed without much fuss.
  • By contrast, when labour is scarce and there are not enough workers to fill all the jobs, the penal system shifts toward reform and exploitation. The goal now is not to prevent the hungry from criminal acts, but to convince unwilling labourers and criminals that they need to be working. This situation, says Rusche, existed for example during the European Enlightenment of the seventeenth century, when ‘excess demand’ for labour ushered in by the Mercantilist Era brought prison reforms. Moreover, since ‘excess demand’ for workers drives wages up, it became profitable to lock up criminals and use them as forced labour, and that too was a feature of European Mercantilism. All in all, a tight labour market causes the system to move from execution to exploitation.

Now these are the two logical extremes: death on the one hand, penal reform and forced labour on the other. A political economy of crime and punishment, says Rusche, needs to start from this analytical skeleton and then flesh out the real historical process that Disraeli referred to as the ‘two nations’ and Marx called the ‘class struggle’. The first person to offer such analysis was Rusche.

Rusche’s own work was largely historical and comparative. He went through a series of epochs, examining in each case (1) the conditions of the labour market; (2) the nature of crime; and (3) the intensity of punishment. And what he found was largely consistent with his hypothesis:

  • During the early Middle Ages, land was abundant and the population sparse. Most crime was about passion rather than property, and punishment usually took the form of revenge, penance or monetary fines.
  • In the late Middle Ages, land grew scarcer and the population more abundant. There were peasant wars and social unrest, and armies of beggars became commonplace. Property crime and robbery were on the rise, but criminals were often unable to pay, so punishment grew crueler and execution more common.
  • During the Mercantilist period, roughly the seventeenth century, wars, hunger and plagues reduced the population, while trade raised the demand for workers. Labour became scarcer and wages increased. It was in this context that the Enlightenment movement made punishment more humane and that imprisonment emerged as a new venue to exploit forced labour.
  • In the Industrial Revolution, roughly the eighteenth century, mechanization made workers abundant, wages fell and the reserve army of the unemployed swelled. Forced labour was no longer necessary, and prison conditions became punitive and grew harsher.
  • In America till the late nineteenth century, rapid industrial development, abundant land and a relatively small population made labour scarce and wages high. The crime scene accorded with Rusche’s hypothesis: criminal offences were low; prison reform was in full swing; conditional sentences, parole and probation were increasingly used; and scientists began to study the causes of crime and how welfare policies can abate them.
  • Rusche also provided an interesting comparison between the United States and Germany during the 1930s. In America, he said, massive unemployment and weak unions drove wages down, causing the penal system to become more overcrowded, brutal and repressive. In Germany, in contrast, the presence of strong labour unions mitigated the decline of wages and helped moderate penal sanctions.
  • Finally, Rusche was also prescient in predicting the use of concentration camps to solve the labour shortages created by the rearmament drives of totalitarian regimes.

The Puzzle: … //

(full long text, charts, notes and comments).

Links:

Robert Lucas and his non-definition of non-money, on RWER Blog, by merijnknibbe, Nov. 21, 2012: The definition of money by the influential neo-classical economist Robert E. Lucas, jr. finally starts to make sense to me. Really. What he in fact does in his models is creating a, literally, childish monetary world … ;

Yes, Virginia, the IRS Does Not Treat the Connected Like the Rest of Us (REMIC Edition), on naked capitalism, Nov. 22, 2012: We’ve written at some length about the failure of the IRS to go after what look like slam-dunk violations of the rules governing the tax treatment of mortgage-backed securities. As we said earlier this year

Net notes, on Al-Ahram weekly online, by Mohamed Abdel-Baky, Nov. 17, 2012;

Why coffee beans? on Al-Ahram weekly online, by Sherine Abdel-Razek, Nov. 14, 2012;

Increased intolerance of Christians in Christian countries, on News Central Asia, by Clemente Ferrer, Oct. 13, 2012.

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