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Classical liberalism and libertarianism are not just ideologies and political movements. They are informed by potent intellectual traditions and research programs. In particular, what Peter Boettke calls the “mainline” of economics represents many of the key insights of classical liberal thought. Boettke writes that:

The mainline of argument stresses the harmony of interests that emerges through the competitive market process. David Hume and Adam Smith emphasized this reconciliation power of the market economy in the 18th century, J.B. Say and Frederic Bastiat did so in the 19th century, and F.A. Hayek and James Buchanan represent perhaps the most articulate defenders of spontaneous order in the 20th century.

This mainline research program in economics continues in the 21st century. Researchers still apply the insights of Austrian economics, public choice theory, New Institutional Economics, and other mainline approaches to further our understanding of liberty, social cooperation, institutions, and the market process.

Dr. Daniel D’Amico, a visiting professor with the Political Theory Project at Brown University, is one of the most fascinating contemporary mainline economists. His research investigates the causes and consequences of incarceration. D’Amico’s analysis of incarceration and prisons applies longstanding insights from classical liberal scholarship in new ways that challenge preconceptions held even by some classical liberals.

Libertarians typically understand the calculation problem explained by Austrian economists like Ludwig von Mises and F.A. Hayek, at least as it applies to production of goods and services. They recognize that government central planners cannot coordinate the knowledge dispersed throughout the economy, and thus will not be able to accomplish the rational economic calculation that market processes facilitate from the bottom up. As such, they reject central planning when it comes to food, medicine, shoes, capital goods, and almost all other goods and services. But when it comes to law and security, most minarchist libertarians think that adjudication and punishment must come from planned political processes rather than markets and spontaneous order.

Dr. D’Amico’s research challenges this exception, and shows that punishment faces calculation problems. In his Ph.D thesis, The Imprisoner’s Dilemma: The Political Economy of Proportionate Punishment, D’Amico writes that “centrally-planned criminal justice services inhibit the expression, detection, and response to social preferences for proportionate punishment. Lacking the knowledge of social preferences over crime and punishment makes designing and applying proportionate punishments difficult if not impossible” (54). He therefore argues that “a market driven criminal justice system could better solve knowledge problems and provide proportionate punishments compared to the current-centralized system” (56).  This poses a serious challenge to advocates of the nightwatchman state that centrally provides law and order.

D’Amico provides another mainline challenge to the minarchist state in his paper The Prison in Economics: Private and Public Incarceration in Ancient Greece. This paper pays homage to Ronald Coase’s classic The Lighthouse in Economics, in which Coase analyzes real-world examples of private provision of lighthouses, thus challenging the assumption throughout the economic literature that lighthouses are public goods that must be provided by government. Dr. D’Amico similarly challenges the assumption that law enforcement is a public good that must be provided by the state. D’Amico examines the history of ancient Greece, describing “a transition from a legal system consisting of private torts enforced by private means towards a system of state defined criminal law enforced by public prison institutions between 800 and 400 B.C.” and notes that this history undermines the conventional public goods narrative in three key ways:

First, before the rise of formal governmental criminal law enforcement, Ancient Greece had a functioning civil society. To the extent that private property rights were enforced, criminal punishment was provided functionally and effectively by the private sector. Second, the historical timeline surrounding the rise of government institutions in Ancient Greece originated with Solon’s penal reforms. Prison construction and penal policy arose before other portions of the government-controlled criminal justice system, rather than the other way around. Lastly, the rise of a government run criminal justice system was more the result of private rather than public interest.

This analysis astutely applies historical evidence to undermine one of the key economic arguments for government prisons, and it does so by applying insights from one of the great masters of New Institutional Economics, Nobel Prize winner Ronald Coase.

These arguments suggest that the best way to deal with problems like mass incarceration and other injustices of the prison state may not be piecemeal reforms, but radical changes to our institutions of law and punishment. As such, they dovetail with an intellectual tradition seemingly far removed from mainline economics: prison abolitionism. Prison abolition is usually advocated by leftists, such as former Black Panther Angela Davis, transgender attorney Dean Spade, feminist writer Victoria Law, and Quaker activist Ruth Morris. But D’Amico’s work shows that a radical critique of the prison system can also be reached by applying the insights of mainline economics.

Today, on December 10th at 8pm Eastern Time, I will be joining Dr. D’Amico and SFL’s own Zoe Little to discuss America’s prison state. I hope you’ll join me on this episode of SFL-On Air, as I discuss one of the most pressing threats to liberty with one of the world’s most interesting libertarian scholars.