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You are here: Home > Current Topics > Mind your Business > 08 November 2004 |
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To what extent can an understanding of economics help in making difficult and challenging decisions? In theory, the subject is all about scarcity and choice and the necessity of making decisions - those decisions are based on informed consideration. In making such decisions we have to accept that we are making sacrifices and we have to weigh up the value of the sacrifices in relation to the value of the benefits gained from the decision. There are some assumptions that economists make in relation to such decision making, one of these is that people behave rationally. The work of the Nobel Prize winning psychologist, Daniel Kahneman, did turn some of these assumptions upside down however. (See our Nobel Prize Winners resource for further information on his ideas.) Many countries around the world have abandoned using the death penalty as a method of dealing with serious crime. The arguments in favour of the death penalty are that it acts as a deterrent to those who may be contemplating a criminal act. The whole rationale of the death penalty, therefore, rests on this assumption and an assumption that people behave rationally - they consider the personal cost to them of their own actions. Kahneman might argue, however, that criminals might consider the extent of the risk they are exposing themselves to by carrying out that act. If it does act as a deterrent then the number of serious crimes committed when the death penalty is an option should be less than the amount committed without such a punishment. In having such a deterrent, some people will be safer as a result - this is an important point to hang on to. In the United States, 38 of the 50 states still retain and use the death penalty as a form of punishment for serious crimes. In November 2004 alone, there are 6 planned executions in Texas, and one each in Ohio, Kentucky, Tennessee, North Carolina and Pennsylvania. There have been 53 executions so far in 2004, with 65 in 2003. The vast majority of these have been through lethal injection. Number of people executed in the United States, 1930-2003
Source of data: US Department of Justice Number of prisoners on death row, 1953-2002
Source of data: US Department of Justice In theory, therefore, the number of serious crimes in the states where the death penalty is used most frequently should be declining. Drawing such a simple correlation between the two is a problem but correlations are at the heart of what economic analysis is about. The problem comes with establishing cause and effect - if the number of serious crimes in, for example, Texas has fallen, is this because of the liberal use of the death penalty? Of course, it could be, but there might also be a huge number of other factors that contribute to the decline in serious crimes. Homicide rate (per 100,000 population) in West Central United States (which includes Texas), 1976-2002
Source of data: US Department of Justice 'During the 1990s this pattern has been reversed: crime in Texas has declined much more steeply than in the nation as a whole, while the Texas prison population has grown more rapidly than the nation's.' 
The data above could be used to suggest that the use of the death penalty has had an impact on serious crime in Texas but drawing such conclusions based on such simple data may give rise to a number of inaccuracies and misconceptions. The debate about capital punishment goes on. If it were opened up to a national referendum, the feeling is that there would be a majority in favour. One of the reasons for not doing so includes the feeling that people are not sufficiently informed of the facts surrounding the issue to be able to make an informed decision. So can economics help? Image: The English murderer, John Reginald Halliday Christie (1898-1953) - his trial influenced legislation regarding the death penalty after he was found guilty of a murder for which Timothy Evans had been hanged. Miscarriages of justice is one area where the opponents of capital punishment would argue that the costs outweigh the benefits. |
Let's begin the discussion of the theory behind this issue by looking at a simple scenario.
Statement 1: If you had a choice of saving 10 lives or saving 1 life, which choice would you go for?
| 10 Lives | 1 Life |
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Statement 2: Do you agree with capital punishment?
| Yes | No |
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Take a poll of the number in the class/group who voted for saving 10 lives and who then said 'Yes' and the number who said 'No' to the second statement. Note this clearly on the board.
The chances are that everyone will have voted for saving 10 lives and that there will be more people who said 'No' than 'Yes'. Are these people rational?
Statement 3: If it could be proved that capital punishment acted as a deterrent would you now agree with its reinstatement for certain categories of serious crime?
| Yes | No |
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Are the numbers for or against now different as a result of statement 3? All those who still believe that capital punishment is inappropriate should be looking at themselves carefully - you are to all intents and purposes totally irrational in your thinking!
Why?
Because, the chances are that the response of everyone in the group to Statement 1 would be that they would rather save 10 lives than 1. When statement 3 was provided, this asserted that capital punishment could act as a deterrent. If that was the case, then some people who would have been likely to have been killed as a result of some criminal act would, if the deterrent factor did indeed work, still be alive. Let's flesh this out with some assumptions.
Serious criminal acts involving terrorism, murder and armed robbery may involve pre-determined planning. In the case of the first two crimes, the perpetrator may well set out to kill their victim. The number of people who might be subject to such pre-meditated acts in one year might be (just for the sake of argument) 25. In the case of armed robbery, the intention might not be to kill anyone, but the very fact that the criminal plans to take a weapon with them raises the chances of someone being killed. Let's say that 10 people each year are killed because of the result of armed robberies. In total, therefore, we have 35 victims of such crime in a year.
If capital punishment acts as a deterrent, then some of those planning serious crime may think twice because of the punishment they might face if caught. Armed robbers might still intend to rob a bank or whatever, but might decide that whilst they could cope with a cost of 15 years in jail, they are not prepared to risk the death penalty. Some of them might, therefore, decide to not take weapons with them. If, as a result of this action, there was a reduction in incidents of violent crime, then it could well be that the number of victims per year falls from 35 to 25. 10 people who would have been killed over the next year as a result of serious crime survive.
What is the cost of bringing back the death penalty? The cost might be that there are failings in the criminal justice system and that someone may be executed for a crime they did not commit. The case of Timothy Evans in the 10 Rillington Place murders in the 1950s in England is a case in point.
Let's assume then that one person each year is wrongly executed. The logical and rational conclusion to our argument so far must be that capital punishment should be brought back because it is generally agreed that saving 10 people's lives is preferable to saving one person's life!
Images: Crowds gather outside Holloway Prison for the execution of Ruth Ellis, the last woman to receive the death penalty in Britain, July 1955. Who benefits from capital punishment? Is it a form of deterrent or merely a public act of revenge? Ellis never had any doubt that she should be executed for what she did but would her case have been judged 'manslaughter' if she was tried under today's judicial system?
Titles: Ellis Execution, Ruth Ellis. Copyright: Getty Images, available from Education Image Gallery.
What we are considering here is the concept of 'opportunity cost'. Opportunity cost is the cost expressed in terms of the next best alternative sacrificed. In this case, we can apply it to the death penalty by looking at the sacrifice made if we decided to bring back the death penalty or if we continue to decide that it is not an appropriate method of punishment.
The concept continues when we look at some of the other reasons people put forward for bringing back or maintaining (depending on where you live) the death penalty. The punishment is reserved for those who commit the most heinous crimes. In such circumstances, the chances of such people being given 'life sentences' is very high and to a certain extent, it might be generally agreed that such people are so dangerous that society should be given protection from them by locking them up for the rest of their lives.
One view of this is that the cost of locking someone like Myra Hindley up for the best part of 50 years involves a massive cost to the taxpayer. People who have committed serious crimes are given decent meals, access to education and work, entertainment and so on - facilities that many people do not have access to - albeit as prisoners they have lost their liberty. The argument would go that such provision imposes a massive opportunity cost on society which could be alleviated if such people were executed.
Let's assume that the average cost per day per prisoner for a high security prison is £118 (Source: Hansard, House of Commons, 3 June 2003). Over a year, therefore, each prisoner in this category (the one most likely to include those in the serious crime bracket) would be £43,070 per year. Over a life sentence of 25 years, this would amount to £1,076,750. Proponents of capital punishment using this type of argument would suggest that society could do a great deal with over a million pounds to help more deserving people. They make the assumption that execution would have almost zero cost and thus release more funds for other services.
This may not, however, be the case. The cost of appeals and legal fees surrounding cases where the death penalty is confirmed may well be very high, indeed some studies would suggest that the 'cost' of execution is significantly higher than that of keeping someone under lock and key for the rest of their natural life.
What we have looked at so far has been a fairly simplistic economic analysis of some of the issues associated with capital punishment. The questions below encourage you to delve a little further into how the tools of economic analysis can be applied to such a diverse and controversial topic area.
Image: Myra Hindley - the so called Moors Murderer. Despite numerous attempts to secure her parole she never regained her freedom. She eventually died in prison. In a different time it is highly likely that she would have been executed.
Title: Myra Hindley. Copyright: Getty Images, available from Education Image Gallery.
Using the three links below, produce a presentation, report, discussion paper or argument for a debate on the issue of capital punishment. Your report should consider both sides of the debate about capital punishment and use appropriate tools of economic analysis.
You should conclude your report by offering a judgement, based on your economic analysis, of whether you would support a return to capital punishment in the UK or maintain the current position where capital punishment is banned. If you support a return to capital punishment, for what types of crime would it be? In either case, you should make it clear what the reasons for your judgement are.
Whatever approach you decide to use in tackling the task, you should remember that you are seeking to apply the tools of economic analysis to this controversial subject. In so doing, you should use appropriate economic concepts - like opportunity cost, but you must focus on supporting the two sides of the argument with facts, comments, quotes and so on drawn from the suggested links and the other resources provided.
Equally important when doing this is to consider the reliability and validity of the evidence you use. Just because you have read a point in an academic journal or whatever source does not mean it is accurate. You should be thinking and commenting about who wrote the article concerned what was their motive for doing it? What position do they take and why? Who is the article aimed at? Such considerations will help you to be able to arrive at a more objective conclusion.
The structure of your report or presentation will also be important. It is useful to start off by setting the scene or outlining the focus of the issue at the outset and then perhaps covering the case for and then the case against before drawing the two sides together to enable you to be able to make a judgement at the end. Remember, that the point where you begin to pull the two sides of the argument together can be the most difficult part - you must analyse what you have said so far but you must be wary of waffling. It is in this section, therefore, where you will need to think carefully about your position and what judgements you are intending to make at the end.
