Tuesday, November 29, 2011

Prison System Mechanics

I haven’t read any economics books or conducting thought experiment or even write my economic thoughts lately, so I’m rusty now. There are more important things that I need to catch-up in the present time, however seeing this unfinished draft on prison system mechanic has intrigue and motivate me to post it, so please bare with me,

we knew "Everyone is guilty, no one is innocent, there are merely varying levels of guilt in this entire society", however there are some crimes or action that is more than just lies or sarcastic words, and there are laws and instruments in place to prevent such an actions propagating within society. One of the instrument that we are going to observe is “Prison System”. Ideally, all the bad guys/girls (I’m not a sexists :P) should be kept inside and all the good guys/girls should be outside, although that is not always the case.

Let us try to model the society and its properties

Good guys/girls (GG) have properties:

a. GG help increase economy, they are the backbone of positive economic output
b. Economic efficiency will be increased when GG meet another GG, it is like “trust” based society, when people trust each other, the cost of overhead in economy decreases so economy runs efficiently without disallocation of resources. So let say this is a form of social capital.
c. GG pays for the prison system (let say there is a form of taxation, say “prison tax”)
d. GG may occasionally mutate to BG, there are many drives to do so.
e. There are GG that might behind bars though, however we shall assume the number is very small compared to BG that were outside of bars.

Bad guys/girls (BG) have the following properties:

a. There are two types of BG, they are the one that is "inside the bars" and "outside the bars". For example, "GG turning into BG" can also be classified as "BG outside the bars", they should be put into prison to ensure efficient society.
b. BG outside bars may help increase economic output in short run, through unsustainable economic process, like smuggling and selling narcotics.
c. BG outside bars may also reduce economy, by reducing economic efficiency and reducing social trust capital.
d. BG might kill GG in the process, thus reducing economic output.
e. BG “enjoys” prison system, which burden the economy. The terms "enjoys" means that they are producing below their potential output.
f. BG might kill BG during their stay in a prison system.
g. BG may increased their skill and cruelness when they met other BG, they may share tricks and know each other to form some group, it like some kind of university for the BG.
h. BG may occasionally mutate to GG (although not many), usually once a BG will always stay as a BG, and it’s almost like a curse.

Government & Prison system has the following properties:

a. Prison system is public goods (can you explain?), although lacking the characteristics of public goods, such as non-rivalrous, which means that consumption of this good by anyone does not reduce the quantity available to other agents and non-excludable, meaning that it is impossible to prevent anyone from consuming that good.
b. Prison works like a “grease” that is required to make the economic wheel rotate at their optimal efficiency. But, in order to erect prisons, establish law institutions, pay the guards and building maintenance, give the bad guys food to eat so the good guys can go to work safely and the bad guys stay inside and do something else requires quite a lot of resources.
c. An industrial-complex based prison system can be a temporary solution (incarceration, where BG inside prison forced to do work / labor), might help GG in reducing prison maintenance cost, however this might lower BG chance to get out of prison (slavery-like system) because the warden have the incentive to keep their "workers" inside. Such prison system may be viewed by "BG outside bars" as unfair and might increase their incentive to avoid being imprisoned or captured by police.
d. A weak and corrupt justice institution will poison the society, GG will view that being a BG or having BG job is more profitable, because they can simply pay some penalty cost and stay outside bars.
e. Once Prison system is flooded beyond its optimal level, BG may cause fear to GG and society at large. Once there is too many BG in the society, the orderly society may collapse into chaos.
f. The amount of conversion rate between GG and BG is affected by:

i. Increasing the number of police
(increase detection rate at the cost of more
taxation from enacting such a system). This may also potentially flooding the
prison system.
ii. Increasing the severity of
, (increase the element of punishment, at no cost,
this may increase the element of sadistic and the element of smartness of
BG, whenever BG trapped in no-win situation, they
would rather die and do some desperate attempt to prevent being
iii. Early Education, this might increase society capability to increase skill to produce and create awareness of law (reduce GG incentive in becoming BG).

I don’t have the equation yet, but the simplistic model below should capture all the element I have stated above, and it should be possible to derive a model for all of this.

Kindly give me inputs or insights on my statements/assumptions above.