Cross posted at The Austrian Economists.

At Professor Horwitz’s request, I wrote this post as an update to my Lavoie contest essay. My original paper entitled “The Use of Knowledge in the Criminal Justice System,” was an attempt to outline points of decision making within the criminal justice system where central-planning inhibits the transmission of knowledge between suppliers and demanders. When police, courts, and prisons are provided by central-planning they uphold the emergence of prices. Without market prices there is no insight into the local knowledge about the problems of crime and the harm that it causes. Furthermore, the absence of knowledge in earlier production nodes causes discord in later stages as well. For example, prisons rely upon good court decisions, and courts rely upon effective police forces; for criminal justice to function well as a wide variety of institutional goods and services, knowledge must be revealed, detected and responded to, in each stage of production. I still believe that this approach was a useful one and needs more attention, so I plan to return to that draft and improve its structure and clarity.
Now the paper has radically changed form from the previous draft. It is more specifically focused on the topic of proportionate punishment. Proportionality is a philosophical standard of evaluating punishment norms – “a punishment should fit the crime.” I argue that the popularly accepted insights of proportionate punishment assume the state as the sole provider of punishment services, and in doing so they assume a state-central-planner to possess a degree of knowledge that it is impossible to possess. I assume that the moral and normative arguments in favor of proportionate punishment are sound, and then I explain that even if the philosophical arguments for proportionality were universally accepted, the central-authority would still lack the real knowledge of individuals’ tastes, preferences, evaluations, and abilities to provide proportionate punishment. Providing punishment like any other provision of goods and services on the market is a task of social coordination and therefore confronts knowledge problems. Furthermore the decision making process requires a mechanism to update and improve itself in order to maintain proportionality in changing social environments and crime rates.
The updated draft can be found here. Any comments or suggestions would be most appreciated. Once again I’d like to congratulate Claudia Williamson for also winning the Lavoie contest and say thank you to the SDAE and the Lavoie Prize committee.
Addendum:
Sorry I didn’t put the link in earlier. It should work now.