Today's comment is by John Pugsley, Chairman of The Sovereign Society. A long-time hard-money advocate, he authored several best-sellers in the 1970s and 1980s, including Common Sense Economics, The Alpha Strategy, and The Copper Play. He is currently editor of The Stealth Investor, The Sovereign Society's investment trading service that focuses on precious metals and other hard assets.
Dear A-Letter Reader,
This is a test. Can you see the relationship between these two news stories?
"The U.S. Congress has passed a law, the Unlawful Internet Gambling Enforcement Act, banning the use of credit cards, checks, and electronic fund transfers for Internet gaming, and President Bush is expected to sign it."
"Gov. Arnold Schwarzenegger called on state legislators to take "swift and dramatic action" to fix what he called a "dangerous situation" in California's jam-packed prisons. Prison officials warn they will simply run out of prison beds by June. Already inmates are stacked on double- and triple-bunks in gymnasiums and day centers."
Answer: It's cause and effect. Any law that forbids individuals from using their own property as they please is certain to increase the need for prisons. Criminalizing voluntary exchanges between individuals (victimless crimes) increases the profitability of supplying outlawed products, creates a black-market rife with violence, decreases respect for law, fills prisons, and increases the power of the state. It doesn't matter if it's gambling, drugs, alcohol, sex, or cigarettes.
Today in the majority of the U.S. federal prison population, the criminal and the victim are the same person . The 800-pound gorilla in victimless crime laws was Prohibition in the 1920s and is the war on drugs today. In 1970, 16.3 percent of all federal inmates were imprisoned on drug-related charges. In 2002, that percentage had jumped to 54.7 percent. And it's even higher today.
According to the U.S. Justice Department, "While the number of offenders in each major offense category increased, the number incarcerated for a drug offense accounted for the largest percentage of the total growth (49%)." In 1980 the incarceration rate for drug offenses was 15 inmates per 100,000 adults; by 1996, it was 148 inmates per 100,000 adults. It's much higher today. So, we just build more prisons.
The Urban Institute's Justice Policy Center reported that: "Over the last 25 years, the number of state facilities increased from just fewer than 600 to over 1,000 in the year 2000, an increase of about 70 percent. In other words, more than 40 percent of state prisons in operation today opened in the last 25 years."
Laws to regulate voluntary exchanges between consenting adults are ubiquitous in history, with prohibition of alcohol being the most prominent. The first half of the 20th century saw periods of prohibition of alcoholic beverages in several countries: 1901 to 1948 in Canada; 1914 to 1925 in Russia; 1915 to 1922 in Iceland; 1916 to 1927 in Norway; 1919 to 1932 in Finland; and, of course, 1920 to 1933 in the U.S. They all failed, of course.
Gambling also has a history of such nonsense. In 1875, a report of a select committee of the New York State Assembly stated that "the lowest, meanest, worst form, however, which gambling takes in the city of New York, is what is known as policy playing [the numbers game]." Of course, they outlawed it. Yet today, state lotteries offer "daily numbers" games where the state's rake is typically 50% rather than the 20%-40% of the numbers game.
Politicians that enact these laws are morally disabled. On one hand they pretend to be protecting the poor workers from losing their money, while on the other they create state-run lotteries that offer suckers odds that would make any gambling casino operator salivate.
Why do politicians do it? It's win-win for them. On one side they get the votes of religious moralists who believe it's evil to gamble. On the other side, they get contributions from lobbyists for gambling enterprises that want to block competition (licensed casinos, Indian casinos, race tracks, etc.), prison-guard associations, companies that sell such things as food and uniforms to prisons, and of course the companies that build and manage prisons.
Bah, humbug. The problem isn't that we don't have enough prisons. The problem is that there are laws against consensual behavior. Here at The Sovereign Society we stand for individual liberty. Sovereign individuals don't need Big Brother to tell them what to do with their own property.
JOHN PUGSLEY, Chairman on behalf
Of The Sovereign Society
