I’ve been teaching law & economics for many years now, and have slowly settled on the package legal reforms for which I most strongly want to argue. I have chosen a package that seems big enough to inspire excitement and encompass synergies, and yet small enough to allow a compelling analysis of its net benefits.

My proposal is regarding how to detect, prosecute, and punish criminal law. It is not about non-criminal law, and it is not a proposal to change how we decide what acts are crimes, when to be persuaded by a particular crime accusation, how hard to work to discourage each criminal act, nor how hard to work to catch each criminal act. To start, I hold constant how we do these other things.

Now you might happen to think that we are very bad today at labeling acts as crimes, evaluating accusations, and choosing detection and discouragement priorities. So bad in fact that you think it a bad idea to make law more effective at detecting, prosecuting, and punishing crime. You might then prefer to reduce our criminal law enforcement abilities, such as via slashing police budgets or arbitrarily hindering police. For example, by requiring police to wear big bricks on their ankles. And you might not want my proposal adopted until you first figure out how to fix the rest of criminal law. But you might still want my solution available for later. I’d be happy to work with you to design fixes for those other parts of the system. Just not today, not in this post. Today I focus on detection, prosecution, and punishment of crime.

Non-crime law deals mostly with accidents and mild sloppy selfishness among parties who are close to each other in a network of productive relations. In such cases, law can usually require losers to pay winners cash, and rely on those who were harmed to detect and prosecute violations. This approach, however, can fail when “criminals” make elaborate plans to grab gains from others in ways that make they, their assets, and evidence of their guilt hard to find.

Ancient societies dealt with crime via torture, slavery, and clan-based liability and reputation. Today, however, we have less stomach for such things, and also weaker clans and stronger governments. So a modern society instead assigns government employees to investigate and prosecute crimes, and gives them special legal powers. But as we don’t entirely trust these employees, we limit them in many ways, including via juries, rules of evidence, standards of proof, and anti-profiling rules. We also prefer to punish via prison, as we fear government agencies eager to collect fines. Yet we still suffer from a great deal of police corruption and mistreatment, because government employees can coordinate well to create a blue wall of silence.

I propose to instead privatize the detection, prosecution, and punishment of crime. My proposal isn’t especially original; many similar changes have been proposed before, and I can’t be bothered to do sufficient historical research to support public claims on who deserves how much credit for which suggestions. So I’ll instead just argue for a certain package of changes, and let historians work out the credit.

The key idea is to use competition to break the blue wall of silence, via allowing many parties to participate as bounty hunter enforcers and offering them all large cash bounties to show us violations by anyone, including by other enforcers. With sufficient competition and rewards, few could feel confident of getting away with criminal violations; only court judges could retain substantial discretionary powers.

That is, all laws are enforced, and enforced equally on everyone everywhere. Police and prosectors no longer have discretion to quietly ignore particular kinds of crimes like jaywalking that they think unworthy of their efforts. Or to prioritize crime in rich neighborhoods over poor ones. Or refuse to prosecute crimes by police or friends of the mayor. Enforcers are fully responsible for any harms they cause in attempting to pursue criminals. The legal system could still prioritize some people, acts, or neighborhoods, if it did so openly and explicitly, via officially declared legal parameters.

Okay, let’s get to the details. There are three big related changes:

Full Legal Liability Insurance – To get and keep a driver’s license today, one must usually show insurance able to pay others a certain minimum amount if found liable in a car accident. I propose to require that everyone get insurance to cover a high maximum liability for legal violations. At least a few million dollars. The main requirement to be an insurance firm here is to have deep enough pockets to pay client liabilities. Ideally clients and their insurers would retain a lot of freedom to make deals of their choosing, including over premiums, co-payments, etc., as long as it remains clear which insurers are responsible for paying for which clients. With full legal liability insurance, parties with deep pockets would sit on both sides of all criminal cases. No longer could a deep pocket side gain by threatening to force the other side to spend more than they have.

Cash Fines For Most Everything – With deep pocket insurers available to pay, we can use fines to punish most all legal violations. This makes it possible to avoid prisons for punishment, which are terribly inefficient. And if the rest of us feel that these fines sufficiently compensate us for crimes, we could make clients and insurers free to choose many details of how best to prevent and minimize the costs from crime, choices we now make awkwardly and centrally, taking too little context into account. Clients and insurers could make trades between preventing crime via monitoring and limiting client actions before a crime, or preventing crime via fear of punishment and loss after a crime. They might agree on (and arrange to pay for) specific amounts and types of punishment, such as fines, prison, torture, exile, or even death, in the event the client were found guilty of particular crimes. Only the crime of not obtaining full legal liability insurance might need an official non-fine punishment. Strong monitoring and punishments make sense here; it should be possible to make this a very rare situation.

Cash-Paid Bounty Hunters – A bounty hunter is a party who pays to collect evidence on a crime, who pays to convince a court that a particular party is guilty, and who gets paid a bounty upon obtaining such a conviction. For each possible crime the legal system must set both a bounty and a fine, or a process for setting such quantities, which could depend on context (such as criminal wealth). The fine tells the insurer and client how hard to work to prevent violations, and the bounty tell hunters how hard to work to catch violations. A bounty that rises with the duration since a crime could pay small bounties for easy to catch fines, and large bounties for hard to catch ones. Large differences between bounties and fines, however, can induce the creation of crime, either by hunters to get bounties or governments to get fines.

Okay, that’s the key package of big changes. Now lets discuss some details.

With bounty hunters, I’m not sure how to handle privacy and property rights about evidence regarding a possible crime. Hunters could be given extra abilities to penetrate privacy, and might temporarily acquire exclusive property rights over evidence that they have collected. I’m pretty sure that if people like the rest of this legal reform package, we could work out reasonable solutions on these issues. And I’m not sure its worth the bother to work out such solutions in the absence of seeing sufficient interest.

As per my new book, citizens may prefer hypocritical legal systems, which pretend to do one thing, but really do another. Hypocrisy can sometimes be achieved by agents with discretion, who can say they are doing one thing but are given opaque incentives to do another. Today police, prosectors, and judges all have discretion. In my alternative proposal, only judges can retain much discretion, to decide if particular people are guilty, and perhaps also case to decide case-specific fines and bounties. If citizens want hypocrisy, but judge discretion is insufficient to achieve it, this becomes a disadvantage of my proposal. Even so, we might study reactions to a proposal like this to help identify common hypocrisies regarding legal policy.

It is in general very important for legal systems set legal liability carefully. The power to make others more liable to you, just because you want to get paid more, is a huge and dangerous power. For example, if we make big firms pay little people like us huge amounts for being harmed by product defects, just because we sympathize more with them relative to big firms, well that can cause great harm, such as overly cautious product safety. This issue becomes somewhat more important in my proposal, as all laws are fully enforced and insurers’ deeper pockets allow for larger liability payments. If we are handling this problem reasonable well now, however, we can probably continue to manage it well enough. But if this problem gets bad enough, it might be better not to have any legal system.

This system could include redistribution to help poor people with high legal liability premiums. For example, someone with a long conviction history might only be able to afford premiums if they agreed to stay on a gated and isolated work farm. The rest of us would have to decide whether to subsidize this person to gain more lifestyle options. Note that today such a person might be just left in prison. Note also that we don’t today offer special cheap insurance to low income folks who have caused many auto accidents; we instead want them off the road. As premiums depend on the deals that clients accept on punishments, monitoring, and action limitations, redistribution polices would implicitly make judgements about which such deals are seen as reasonable. Even so, this might still give individuals more flexibility than in our world of criminal law. A related option is to create standard public insurance options open to all.

Relative to non-criminal law, we today make it more difficult to obtain convictions in criminal law, such as via juries and higher standards of proof. If this is because we less trust government police and prosecutors not to collude with judges, then we might see this as less of a problem in a more open system of competitive bounty hunters. If so, we could cut juries and lower standards of proof, and then catch more crimes more cheaply. There are also other ways we might plausibly lower court costs without much lowering the accuracy of decisions.

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