Seeking Rent & Restitution

According to the FBI, rates of violent crime in the US have been falling across the board since 1990. In spite of that fact, we see increasing reports of citizen abuse by Law Enforcement at every level. Those who have sworn to serve and protect look more like military every day, with black uniforms, heavy weapons, and Swat Teams proliferating. And they act like military, treating our own citizens like the enemy in an increasing number of cases. Productive citizens are beginning to fear Law Enforcement because any encounter could lead to being tazed, beaten or shot. There are many likely reasons for these developments, but the one I would like to address is “rent seeking”. In case you’ve never heard this term, it is the extraction of uncompensated value from others without making any contribution to productivity. Usually this occurs when private companies pursue government protection or benefit rather than trying to better satisfy their customers. But Law Enforcement can fall into this same type of behavior when enhancing traffic fines and asset forfeitures unjustly. These punishments for violations are negative incentives to the violators and of course, people modify their behavior to some extent because of the disincentives. But every monetary disincentive creates an equal incentive somewhere, because for every fine paid, someone receives payment. Now, who benefits from traffic fines and asset forfeitures? Why, the government does. You might say, well of course government receives the fines and confiscated property. They need the revenue to fight crime. That may be true, but let’s consider the incentives created by this revenue. Let’s say that society responds so well to the disincentive of a certain speed limit that no one speeds in that area anymore. What happens to government revenue? It goes down. So, government will seek to replace that revenue with a new or higher tax. If the tax hike works, the net result will be that public obedience to the law has led to higher taxes. But what if the voters reject the tax hike? Theoretically, government could lay off the now unneeded traffic officers, but in practice, they tend to find ways of enhancing the traffic fines in order to keep all officers employed. So, what can be done in response to an ungrateful public that has rejected higher taxes? Well, in this area, there is great creativity: They could lower the speed limit to ridiculously low levels. They could change the speed limit frequently and lurk at the lower limit areas to nab the unwary. They could enforce the existing limit more strictly, giving large fines for 1 mph over the limit. They could throw a few cones on the side of the road and double the fines for a construction zone. If you drive, you’ve seen all of these, and you’ve seen them because the monetary incentive is working. And by the way, lower revenue from fines can result from many causes other than civic virtue, like for instance the current economic man-made disaster.
The problem can be stated like this: as traffic law violators and criminals are impoverished by the loss of their property, government is enriched, and has every incentive to maximize revenue even when crime rates are falling. What to do? Well, I propose the following: All traffic fines and property confiscated as a result of criminal activity shall be donated to private charities which benefit the victims of the public roads or any of the crimes involved. This removes the incentive for any unwarranted “crackdowns” and at the same time revives the concept of restitution for victims, who are currently very badly neglected. DUI fines will go to DUI victims, and drug related asset forfeitures will go to victims of drug crimes. Ok, it’s not a perfect solution. Maybe the charities would also become rent seekers, but if so, at least they would not have the means to oppress the public, so it would be a more benign abuse, and could be handled in the courts. As long as traffic fine and asset forfeiture revenue flows to those with violent means of revenue enhancement, there remains the possibility of violent abuse of the public.