George Akerlof, together with his wife, Janet Yellen, who later became a former governor of the Federal Reserve Board and then the chief economic advisor for President Clinton, analyzed a somewhat similar situation (Akerlof and Yellen 1993). They described a three-party game among potential criminals, the law, and the community. In their game, the community decides whether or not to cooperate with the police based on their fear of retaliation, hatred of gang activities, as well as their judgement of the fairness of police. Gang members can profit from crimes so long as they elude the law. If they fail, they suffer from punishment. Finally, in their game, the government wants to minimize both crime and spending on police. They consider three alternative outcomes. In one regime, punishment levels are severe. The community considers punishment to be unfair and refuses to cooperate with police. As a result, crime rates are high. In another regime, the government sets punishment levels low enough to be considered fair. Even so, some crime exists because consequences of punishment are not severe. In the third, norms of cooperation are so high that no crime exists. In their model, all three outcomes are possible. Once any of the three regimes comes into being, it can be stable. Of course, in the real world, a few people will still engage in antisocial behavior. In most cases, a family or a neighborhood would be able to hold such tendencies in check. However, since the need for punishment would be so rare, society could afford humane treatment and serious efforts at rehabilitation for the few people who required incarceration. Unlike an Orwellian society where the government imposes behavior on people who may not share the official vision of the good society, I am suggesting the possibility of a community that develops its ethical norms from the grassroots. Since people in such a community will be able to find fulfillment in their daily lives, they will be free from the anger and hostility that makes people feel the need to impose a rigid set of values on others. As a result, in such a world, minorities need not fear having to submit to the tyranny of the few. --
Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901