Economics is a tool to achieve particular outcomes. Studying economics at an undergraduate or a graduate level doesn't magically endow you with the answer to every fiscal and monetary problem facing the world, and it doesn't give you the silver bullet that ends every argument. With every normative claim, there is an underlying moral view, and economics simply provides us with one way to get there.
Another thing about any sort of economics model is that the strength of the model is directly tied to the strength of the assumptions that form it. I see that krellin, Draugnar, and y2k seem to be of the opinion that a private-run prison system would be beneficial. Now, y2k doesn't think that privatisation is the perfect solution--and I agree with him that it's certainly not the utopia that krellin seems to suggest--but he does see some good in it.
The problem with what krellin and Draugnar are saying about private prisons is that they are assuming something very near perfect competition. But, as y2k pointed out, there are barriers to entry. It's rather difficult to start up a prison company from the ground up. There are also numerous other factors at play, such as personal connections, regional and spatial constraints, and the political climate of a given state or country. It's not a black-and-white picture, and this scenario, like many others, requires a nuanced discussion.
krellin and Draugnar also cling to some sort of "beneficent providence" of the private sector: this idea that if every firm and individual were rationally to pursue their best interests, we would get the best possible outcomes. The private companies are pursuing profits, they say, and in doing so will not harm or otherwise mistreat inmates. What's strange about this assertion is that they ignore any and all forms of cronyism and they assume that all companies can magically come to some sort of balance between short- and long-term interests. Unfortunately, there are market distortions in the real world, and we do, on many occasions, need to restrain the private sector. It is not always evident to a corporation how much to invest for the future and how much to reward to its owners and supporters. For this reason, businesses can fail. And given the barriers to entry in this particular market, it's not always a given that a new company will rise from the ashes of another.
One other thing that I see coming out of this thread is a strange idea of what the prison and justice system exists to do. The clearest idea of what it's supposed to do comes from krellin, who states that it exists to punish offenders. I agree: we have jails to punish people. But that's not the only thing jails exist to do. They also exist to remove offenders from society and to rehabilitate them so that when they get out, they can have a relatively smooth reintroduction to society. This is not to say that rehabilitation is perfect or even good in every (or even most) circumstances, but that there's more to it than simply punishing people. I think that when mendax says that there's a problem with the prison system given the number of incarcerated citizens per capita, he's pointing to the imbalance between retribution, incapacitation, and rehabilitation.
If there are no support systems inside a prison, and if the conditions of life are not particularly good, you're going to develop a kind of person that will reoffend when they re-enter society. Again, this is not to say that this will happen every time, but that it could and probably does happen more often than not. Recidivism is compounded by poor prison conditions, and it's possible that this is another contributing factor to the high incarceration rate in the United States. I think this is what mendax is getting at (although he can correct me if I'm wrong).
Now, turning back to Fasces and the actual topic at hand, shame is a remarkably powerful motivator. I seriously doubt that there will be a problem of people forgoing their apartments and houses just so they can get social housing for free. Judgmental stares from your peers after you tell them you're living in an apartment through a program meant for homeless people would likely offend the individualist and self-reliant streak that permeates American discourse. And even if you get some people who will swallow their pride and go for a free apartment, it's not like they're getting a penthouse apartment in the centre of downtown. Social housing isn't exactly the same as the place that paying tenants are staying at. And I'd say that small harm would be outweighed by benefit of a huge reduction in homelessness.
Fasces said: "Are you seriously telling me that 78% of homeless people were able to pass some sort of means tested program? Especially when the article says this:
'he state is giving away apartments, no strings attached.'
Article clearly says its not means tested."
Now, I'm not entirely familiar with the situation in Utah, but I think that if a guy showed up to the program office with clean hair and straight teeth and said he was homeless, they might ask a couple questions of him. Just because they give away apartments with no strings attached doesn't mean that the administrators don't exercise any sort of judgment. But even if bureaucrats are giving away apartments like candy, as mendax said, and as I will reiterate, I would be fine with that small harm especially when it is weighed against the benefit of a significant reduction in homelessness.
Fasces said: "But if [saving homeless people's lives is more valuable than preventing freeloaders], this is now a social issue and its up to our opinions on morality to determine the solution. The article was claiming it was sound economics to provide homeless with free housing, and I'm saying I disagree."
It is foolish and short-sighted to separate social issues and economics when you're writing policy. And as I said at the top of this post, economics is merely a tool to achieve an outcome, and the motivation to make any changes comes from a moral outlook.
Let's take this policy as an example. The state provides homeless people with an apartment and a social worker. The bureaucrats tell them it's cheaper to do this than to let them rot in the streets (note that this is a business/financial calculation and not an economic one). The bureaucrats also say that there might be freeloaders, and they give you an extended analysis on opportunity costs and the distribution of resources (this is the economic component). Do we implement the policy?
We don't find the answer to that question by doing math or checking balance sheets. We do it by weighing moral values and choosing which would be best in this situation. In order to make a pronouncement on the value of this policy, we need already to have an idea of what is good or bad. Are freeloaders bad? This is a moral consideration. Are homeless people worth it? This is a moral question. Every normative decision is based on a valuation of good and bad, of right and wrong. Social issues and morality come into play if we are talking about taking action, and to presume otherwise is to deceive yourself.
Moreover, the article is not saying anything about whether or not it's sound economics to implement this policy. It states only that it is cheaper to implement this policy than to let homeless people take up spots in emergency rooms and jails. What you perceive to be an argument that this is sound economics is really just the implicit assumption that something being cheaper is better. Regardless of whether or not that's true, it's not an economic pronouncement.
At this point, I would normally move into my spiel about individuals, communities, and property rights, but I think most of you have read that already in my previous posts in other threads, so I'll skip it this time.
On the whole, I like this policy because it allows the less fortunate to have access to the tools necessary to participate in society. It opens up a world of freedom to people who wouldn't otherwise have it, and it doesn't seem to have any significant negative consequences along with it.
Tory nasties laugh at stories of hungry families
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