February 3, 1975

Professor M.W. Reder
Department of Economics
Graduate School of Business
University of Chicago
Chicago, Illinois 60601

Dear Mel,

The reprint that you sent me “Citizen Rights and the Cost of Law
Enforcement” touches on so many of the deepest questions of the “social
contract" that I hardly know where to begin in commenting upon it. On
the question of the urgency of adopting a balanced cost~-risk-benefit
analysis of the police problem I am entirely with you. Just in the last
few days I have been collecting a few clippings that reflect some of the
inherent contradictions in the arena you have examined. But despite the
occurrences of absolutist thinking I wonder if this is prevelant as you
make out. Have there not been some more objective social investigations
along that line? In fact, from the popularity of “law and order” as an
issue in election campaigns I would have thought that the public
consciousness was tipped rather far to the right; however, much the
articulate academic elite may speak from the other side. Consider who
was in fact the legally constituted principal officer of the United
States Department of Justice until rather recently!

The subject plainly illustrates another arena where the assumption
of a value as “infinite” results in economically unsolvable equations.
My own concerns about this have been primarily in the field of drug and
enviornmental safety where the assumption that the value of human life
in fact should be placed at an infinity (so contrary to actual social
decisions that bear on this point!) has had consequences similar to those
that you deplore in the law enforcement field. Rather than focus just on
the cost questions in an economic framework, one could algo stress how
absolute rights inevitably conflict with one another: we simply cannot
have absolute health, absolute environmental safety and absolute privacy
all at once.

If one views your economic theoretical framework as a prescription for
further empirical studies in order to establish the points of possible
optimality in the trade~offs, I would be particularly enthusiastic. I did
once dabble in a discuasion a bit closer to the theme of your article ~-
see attached correspondence relative to the investigation of the optimum
level of IRS audit and investigation of tax returns.

over

 
Professor M.W. Reder -~2- 2/3/75

That example may illustrate the difficulties and dangers of
proceeding too rapidly with a simplified first order economic model,
which may be just as hazardous as the infinitism that we both attack.
There are considerations of comity, of the psychosocial sense of participation
in a social enterprise, which being very difficult to measure in economic
terms may be inadvertendly left out of one's calculations. This in fact
would be my principal objection to the general style of your analysis
although I found the last few pages of your article the most interesting
insofar as they took up such matters. The questions that you address
are in fact so somplex and deserved to be filled out with detailed
examples to such a degree that I might hope fou could expand the article
into a rather large book which the subject certainly deserves! It might
come to have a place in the relevant literature comparable to Calabresi's
work on the "Cost of Accidents", which I think has had a significant
policy influence.

Among the more "political" questions that I think must be dealt with
in an enlargdment of this analysis might be included some of the following:

Precedent. Many, many transactions in this sphere are judged not in
terms of their own immediate economic outcome but the extent to which they
appear to serve as precedents fer further incursions of privacy.

Other social functions of law enforcement besides deterrence. I do not
know where to find the empirical evidence that the level of street crime
bears a functional relationship to the level and efficacy of police activity.
And if one did, one of course might wonder which was cause and which was
effect, no matter what one’s common sense of view of the matter. Before
there are large scale social restrictions obviously we should know more about this.
One concern that polite people often leave out of their discussions about
crime and law enforcement is the element of retrébution which I view to be
an essential ingredient of a society based on law. Perhaps my training on
this goes back to reading the Greek classics, but I do not think one can
ignore the considerations that encourage the citizenry to allow the law to
take its course as an alternative to personal vengeance.

Diametrically opposed is the consideration of totally different approaches
to the prevention of crime that at first order may seem to be in conflict
with the diligent prosecution of offenders and vigorous police activity.
Certainly, further analysis should investigate more closely the extent to
which this conflict is real. I have in mind the extent to which effictent
aculturation would be a better route to producing crime than vigorous
prosecution. (Another way of putting this is that your own model puts down
the “law abiding citizen" as a given). Enthusiastic ca&mpliance with the law
certainly depends upon a high level of confidence that the innocent will not be
abused, no matter what one's economic equations.

over
Professor M.W. Reder -~ 3= 2/3/75

One should also give at a higher level of system analysis very
careful consideration to a wide variety of other technical solutions which
may involve different kinds of surveillance and risks of invasion of privacy.
Do you know of any reliable statistics on the efficacy of steps like
reducing the amount of cash that bus drivers have available, an obvious
temptation to crime. This of course entails a reduction of services to the
public in requiring the passenger to have exact change, etc. and does reflect
a situation where there evidently has been a balancing of prospective utilities.
But on the assumption that this was an effective measure, I would anticipate
further advantages from technical progress towards the "cashless society";
and I have even wondered about implementing a further variation thereof,
namely the routine processing of paper money for the recording of certificate
numbers allowing for the possibility of retrospective monitoring of cash
transfers where a crime had been involved. I believe that this is both
technically and economically feasible; its efficacy and the extent to which
it would be acceptable in the light of possible privacy issues are still in
question. It would certainly increase the chances of effective prosecution
if there were a greater likelihood that cash obtained illegally could be
identified as such. (Why this was not systematically adopted as a way of
dealing with hijacking and kidnapping, I am not sure — perhaps indeed it
was! But then why keep it a secret?)

A couple of further remarks on the overlay of political and historical
on economic considerations. Your reference on page 450 (2) = I doubt that
the practice is based on any special retionale rather than as a product of
long standing tradition. If that historical tradition did not exist, I could
not imagine that it would be possible on any rationale to impose such a
constraint de novo - perhaps except under the cover of a hysterical demand
for better enforcement against narcotics or the like. On the other hand,
the lumping together of the inspection of baggage on airplanes or at customs
with "search without warrant" is an unneesegary mingling of very different
circumstances. It is very different to have a well known and well advertised
checkpoint; another to contemplate the preemptory invasion of one's home.
Indeed, the important underlying distinction is the decreased likelihood
that checkpoint examinations will be abused beyond the functions for which
they were originally intended, and vice versa.

Furthermore, as to the disposition of offenders strictly non-economic
considerations - I would put them under the heading of comity - govern the level
of retrdbution that would generally be excepted in dealing with minor offenders.
It might be a very efficient procedure indeed to decapitate, of even better to
transport, minor thieves but I cannot imagine our standing for it. (Let me say
in parenthesis that the only penal system that I am aware of as having been
historically successful was precisely that of transportation to Australia).

But I do not know what I could use as an analog for that today.

To close with interjecting anewwan more personal view, I believe that
we all suffer a great deal from the occasional actual and greater potential
abuse of police power given the costs of the reactions that you summarize in
your article. If we could discover more effective measures to prevent that
abuse (which you cover very lightly in your footnote 29) we might well
do better in a rational approach to the other problems you summarize.

In particularly we ought to find better solutions to the abuse of police
power thai the exclusionary principle which must have no parallel elsewhere
Professor M.W. Reder ~4 a 2/3/75

in economics for adjusting a system of transactions in terms wiowho benefits
in each microscopic situation. Many other market oriented procedures are
subject to reversal or evolutionary change. The political side-effects of
uncontrolled police power, lacking such assurance, are so horeaddargs that tf
think we can afford to pay some premiums by way of an insurance policy
against the police state. That must be included among the benefits that

are éntailed by, if not always perfectly articulated, a high order of
defensiveness about personal civil liberty. To summarize a few points I would
be most interested in a better assessment of empirical determinations of

the level of suboptimizationsunder which you believe we presently labor

and about the costsand benefits of some of the remedies that you would now
propose. And of course I am asking this in the sense of an inquiry about

the most effective procedures to gain those ends rather than expecting a
completed answer.

Sincerely yours,

Joshua Lederberg
Professor of Genetics

JL/rr