Incarceration is a Bargain
by Steve H. Hanke
One of the biggest issues in every political election is crime. Sensing the public's mood, most candidates have been jockeying for position as the tougher candidate on crime.
The candidates' rhetoric and proposals reflect a recent trend toward a lock-'em-up approach to crime and criminals. First came mandatory sentencing laws, requiring minimum punishments for particular crimes. Then came the "three-strike" laws, supported by Mr. Clinton and adopted by 20 states and the federal government.
Many liberals and media pundits are unhappy with the trend toward tougher laws. The nationwide incarceration rate almost tripled between 1973 and 1994, and the U.S. now imprisons seven times as many people relative to population as the average European country does. Liberals argue that incarceration doesn't work, because the number of reported violent crimes per capita approximately doubled and the rate of reported property crimes rose by about 30% during the years when jail populations were rising.
The liberals are dead wrong. Harvard University economist Steven D. Levitt makes hash of their simple-minded argument in the May 1996 issue of The Quarterly Journal of Economics. Mr. Levitt's careful empirical analysis shows that violent crime would be approximately 70% higher today if our prison population had not increased since 1973; and property crime would be almost 50% more frequent. Crime has continued to rise since the early 1970s because too few criminals have been put behind bars. In the eight years since the original 1996 study, as prison numbers stayed high or increased, F.B.I. crime figures in almost all categories did not grow or decreased.
As the accompanying table shows, an increase in the prison population reduces all major categories of violent and nonviolent crime. Using the data in the chart, we can predict just how well prisons work. For each 1,000-inmate increase in the prison population, the following annual reductions in crimes will follow: murder (four), rape (53), assault (1,200), robbery (1,100), burglary (2,600), larceny (9,200) and auto theft (700). On average, therefore, about 15 crimes are eliminated for each additional prisoner locked up.
Incarceration works, but does it pay? Mr. Levitt's figures suggest that prisons are among the best public investments we can make. He first estimates the economic benefit to society of keeping bad guys behind bars - that is, the annual amount of damage the average criminal would do if on the loose: $53,900. From these benefits, Mr. Levitt subtracts the annual cost of incarceration, about $30,000 per prisoner. This yields an average net benefit of $23,00 per year for each criminal behind bars.