The death of David Koch last month deprives the libertarian intellectual tradition of one of its greatest advocates. With his brothers, David Koch funded and provided inspiration to libertarian scholars and intellectuals, often those unjustifiably at the margins of academic institutions. The Koch-supported Institute for Humane Studies at George Mason University, for example, has for over half a century provided a forum for reasoned discussion and research in that tradition.
You get this squared. (AP Photo/Daniel Luedert,File) photocredit: ASSOCIATED PRESS
Criminal-justice reform has been a libertarian standard ever since the rise of the big American carceral state, beginning in the 1960s. Leading lights in the libertarian tradition were just then beginning to enunciate how central “human capital,” a term defined by economist Theodore Schultz, was to a successfully operating economy. Locking millions of people up in jail, and then after release relegating them to jobs far beneath their talent level because of their record, surely was inimical to economic flourishing and prosperity.
Economist Gary Becker spurred this thinking on in his elaborations of the “demand for crime.” Sometimes, people have a threshold at which they will simply commit a crime—they will park illegally, fie on the ticket, if they have to get to an appointment, as in one of Becker’s examples. Another driver of the demand for crime came from the enforcers. If people’s jobs in the justice system depend on crime, there is technically a demand for it. The more such things could be talked about and delved into, in polite society, the more just and beneficial a society we might fashion.
Thereupon the crime wave got bigger and bigger. Violent crimes—the statistics are the state’s—went up and up from the 1960s on, peaking in the early 1980s but not precipitously falling until the mid-1990s. And our prisons got stacked with people. It could be a reason we have been suffering from subpar economic growth for several decades now. Can that much human capital be locked up—and can that many guards etc. have jobs such as those—and our economy remain super-productive? Surely not.
What was this crime wave? It was foretold by Keynesianism. Indeed, Keynesianism may have caused it.
The Keynesian diagnosis of the free-market system is that it brings about a sub-optimal steady state, in which there is a large number of unemployed. The state has to step in and spend money to put these people to work.
You might ask, who precisely are these people who are left unemployed by the market, this perhaps 10% of the workforce left idle while 90% work? Why are they part of the 10%, as opposed to the 90%? Why did they lose the musical-chairs race to get the 9 available jobs for every 10 persons?
Built into Keynesianism is an assumption that there is a natural underclass, a set of born losers. The market can never provide enough jobs, per Keynesianism, but it certainly can identify that minority that fails in the competition for jobs. These people are, in the Scrooge phrase, the “surplus population.”
