Does any country in the world create estimates of individual citizens’ cost to social services? Does any country in the world have a system where companies can bid for the right to collect individuals’ future tax revenue? Has anyone else (politicians, researchers, etc.) ever argued for a system resembling this one?
I’m not aware of any “net tax contribution” measurement, but I haven’t done an extensive search either. I’m not aware of anyone arguing for anything close to the system I proposed. The closest (but still far away) system that I’ve heard of is social impact bonds, which have been implemented in Australia to some degree. In the implementations of them that I’ve seen, they give prisons bonuses for reaching a low level of recidivism.
There’s several weaknesses of that model. Maybe one prison happens to get allocated inmates that are not likely to reoffend, in which case, they get paid for no reason (bidding on inmate contracts stops this). A reoffending murderer is given the same weight as a reoffending thief, so the prison is indifferent to who they rehabilitate (valuing “equivalent compensation” of crimes stops this). And the government is not cost minimizing (again, bidding stops this). It also doesn’t incentivize prisons to increase the net tax contribution of the convict (whereas mine does).
I’d have loved to hear thoughts in the post on how we might “carefully work towards” a system that works so differently from any that (AFAIK) exist in the world today. What intermediate steps get us closer to this system without creating a full transition?
I have some ideas, but no strong theoretical reasons for believing they’re ideal.
You could implement a subset of the system: Just the income tax paid and welfare used. That data already exists. This data could be linked to the inmate’s attributes, which would allow the prisons to have good reference classes from which they could estimate their profit-maximizing bids. The primary difference between this half-measure and the full proposal is that the prisons don’t pay the government when a crime is committed (secondarily, income tax paid is different from tax incidence).
When you have the right metrics for the full system (valuations of equivalent compensation for all crimes, and tax incidence) if, for some reason, tax incidence data can’t be generated for the past, you could keep the half-measure system in place for a few decades. But during that time, you do the measurements and store the data. When it’s time to implement the full system, again, prisons have good reference classes from which they can estimate their optimal bids.
If politicians are particularly skittish on the idea, they could say to the prisons “We’ll pay you 80% of what we would under the current scheme, and pay you 20% of what we would under the new scheme.” I wouldn’t recommend this, because some viable rehabilitative measures won’t be taken.
I’d have been more convinced by the post if it referred to any existing policy which mirrors any aspect of these proposals.
I think the best argument for conservativism is “Out of all possible sets of institutions, the one we’re in is pretty good”. But this doesn’t mean “never implement radical change” (if you never do so, you’ll get stuck on a local optimum). It just means that when you’re implementing radical change, you have to have good evidence. I wouldn’t implement this system based off the mathematical justification I’ve given here. But I think the problems with the argument could be solved with minimal changes to the actual system. And if one of the assumptions of the argument fails when the system is implemented, we can always change back to the existing system. But if it is successful, it has implications for other policy areas (such as immigration).
An example of radical, evidence-supported policy is the kidney-exchange reform. Rather than exchange kidneys between pairs of people, they now chain groups of people together. The new system facilitates far more exchanges between willing donors and people in need. Countries that waited for the “evidence” (by which they mean “empirical evidence”) let people die because they didn’t value the logical argument.
The hospital-intern matching algorithm is another example (it was also applied to student-to-school allocation).
The most prominent system that’s supported on a theoretical-level is free markets. It is supported by the general equilibrium model. When the assumptions that model stray too far from reality, the system breaks down. When they’re close enough, it works very well.
So the question is “Are the assumptions of the prison-policy argument close enough to reality”. I think they mostly are, and where they’re not, the error is balanced by a countervailing error.
I’m not aware of any “net tax contribution” measurement, but I haven’t done an extensive search either. I’m not aware of anyone arguing for anything close to the system I proposed. The closest (but still far away) system that I’ve heard of is social impact bonds, which have been implemented in Australia to some degree. In the implementations of them that I’ve seen, they give prisons bonuses for reaching a low level of recidivism.
There’s several weaknesses of that model. Maybe one prison happens to get allocated inmates that are not likely to reoffend, in which case, they get paid for no reason (bidding on inmate contracts stops this). A reoffending murderer is given the same weight as a reoffending thief, so the prison is indifferent to who they rehabilitate (valuing “equivalent compensation” of crimes stops this). And the government is not cost minimizing (again, bidding stops this). It also doesn’t incentivize prisons to increase the net tax contribution of the convict (whereas mine does).
I have some ideas, but no strong theoretical reasons for believing they’re ideal.
You could implement a subset of the system: Just the income tax paid and welfare used. That data already exists. This data could be linked to the inmate’s attributes, which would allow the prisons to have good reference classes from which they could estimate their profit-maximizing bids. The primary difference between this half-measure and the full proposal is that the prisons don’t pay the government when a crime is committed (secondarily, income tax paid is different from tax incidence).
When you have the right metrics for the full system (valuations of equivalent compensation for all crimes, and tax incidence) if, for some reason, tax incidence data can’t be generated for the past, you could keep the half-measure system in place for a few decades. But during that time, you do the measurements and store the data. When it’s time to implement the full system, again, prisons have good reference classes from which they can estimate their optimal bids.
If politicians are particularly skittish on the idea, they could say to the prisons “We’ll pay you 80% of what we would under the current scheme, and pay you 20% of what we would under the new scheme.” I wouldn’t recommend this, because some viable rehabilitative measures won’t be taken.
I think the best argument for conservativism is “Out of all possible sets of institutions, the one we’re in is pretty good”. But this doesn’t mean “never implement radical change” (if you never do so, you’ll get stuck on a local optimum). It just means that when you’re implementing radical change, you have to have good evidence. I wouldn’t implement this system based off the mathematical justification I’ve given here. But I think the problems with the argument could be solved with minimal changes to the actual system. And if one of the assumptions of the argument fails when the system is implemented, we can always change back to the existing system. But if it is successful, it has implications for other policy areas (such as immigration).
An example of radical, evidence-supported policy is the kidney-exchange reform. Rather than exchange kidneys between pairs of people, they now chain groups of people together. The new system facilitates far more exchanges between willing donors and people in need. Countries that waited for the “evidence” (by which they mean “empirical evidence”) let people die because they didn’t value the logical argument.
The hospital-intern matching algorithm is another example (it was also applied to student-to-school allocation).
The most prominent system that’s supported on a theoretical-level is free markets. It is supported by the general equilibrium model. When the assumptions that model stray too far from reality, the system breaks down. When they’re close enough, it works very well.
So the question is “Are the assumptions of the prison-policy argument close enough to reality”. I think they mostly are, and where they’re not, the error is balanced by a countervailing error.