The Illusion of Free Markets

Punishment and the Myth of Natural Order

Bernard E. Harcourt

• Publisher: Harvard University Press
• Year: 2012
• Print ISBN: 9780674066168, 9780674057265
• eBook ISBN: 9780674971325
• Topic: Business
• Subtopic: Business General
• Index: Business

It is widely believed today that the free market is the best mechanism ever invented to efficiently allocate resources in society. Just as fundamental as faith in the free market is the belief that government has a legitimate and competent role in policing and the punishment arena. This curious incendiary combination of free market efficiency and the Big Brother state has become seemingly obvious, but it hinges on the illusion of a supposedly natural order in the economic realm. The Illusion of Free Markets argues that our faith in "free markets" has severely distorted American politics and punishment practices.

Bernard Harcourt traces the birth of the idea of natural order to eighteenth-century economic thought and reveals its gradual evolution through the Chicago School of economics and ultimately into today's myth of the free market. The modern category of "liberty" emerged in reaction to an earlier, integrated vision of punishment and public economy, known in the eighteenth century as "police." This development shaped the dominant belief today that competitive markets are inherently efficient and should be sharply demarcated from a government-run penal sphere.

This modern vision rests on a simple but devastating illusion. Superimposing the political categories of "freedom" or "discipline" on forms of market organization has the unfortunate effect of obscuring rather than enlightening. It obscures by making both the free market and the prison system seem natural and necessary. In the process, it facilitated the birth of the penitentiary system in the nineteenth century and its ultimate culmination into mass incarceration today.

1

Beccaria on Crime and Punishment

The place to begin is at that contested moment when the idea of natural order began to take hold in the field of public economy and allowed eighteenth-century thinkers to separate economic exchange from the penal sphere. One text, more than any other, galvanized the controversy: Cesare Beccaria’s tract On Crimes and Punishments, which is surely today the most famous eighteenth-century text on punishment. Beccaria’s short tract arrived precisely at the moment of contestation and became, through selective readings and appropriations, a mirror of what his contemporaries wanted to read into the relationship between markets and punishment.

To the philosophes of the Encyclopédie, Beccaria’s work represented the epitome of Enlightenment reasoning on punishment and a guarantee of freedom. To the Physiocrats, Beccaria’s writings served as the prime example of a disciplinary paradigm of government intervention, the foil against which they would develop their notion of natural order. Surprisingly—or perhaps not—the struggle over Beccaria’s legacy continues to the present. Today, Chicago School thinkers such as Gary Becker and Richard Posner appropriate Beccaria as the founder, with Jeremy Bentham, of the economic approach to crime and punishment, while poststructuralist thinkers like Michel Foucault interpret Beccaria as the pivotal theorist of discipline and regimentation.

“Perhaps not,” I suggest, because the competition over readings, interpretations, and appropriations of texts is, in truth, no different than the struggle over the categories themselves. Finding discipline in the police des grains is hardly different than reading discipline into Beccaria’s tract. Categorizing those police practices under the rubric of regimentation rather than freedom, as Fréminville would, is no different than appropriating Beccaria as the symbol of discipline, or, for that matter, as the icon of Enlightenment reasoning, or the founder of rational choice theory. Just like the categories themselves, we deploy readings of texts to help shape, to confirm, to argue for our understanding of practices: to demonstrate the oppressiveness of government interventions at an earlier time—or to praise them. To highlight the liberating and emancipatory potential of free markets—or to mythologize them. Whether we are reading Beccaria’s On Crimes and Punishments, or for that matter Quesnay’s Tableau économique, our appropriations and readings of texts are productive. They do a lot of work.

The competition over Beccaria’s text has been particularly productive, allowing many generations of thinkers to mold the history of intellectual thought and promote their views in the struggle over natural order and the police des grains—over liberty and discipline. And gradually, over two centuries, these competing appropriations of Beccaria have given way to a clear demarcation between the market and the penal sphere. But let’s not start at the end. Let’s begin with the first who appropriated Beccaria, the philosophes of the Encyclopédie, who saw in his short tract everything they wanted to see about the Enlightenment and civilization. Truth be told, were it not for them, neither the liberal French Physiocrats, nor the proponents of law and economics today, would have had any material to play with. Let us begin the story, then, with Beccaria in Paris.

Beccaria, the Philosophe

Cesare Beccaria’s short tract On Crimes and Punishments met with mixed reviews when it first appeared in Italian in April 1764. Published anonymously in Livorno for fear of repercussions (the tract was strongly secular and egalitarian), it was panned in the Parisian Gazette littéraire de l’Europe as a simple restatement of Rousseau’s Social Contract and attacked in Italy as the work of a “socialista” (some historians contend that this was the first use of the term “socialist”).¹ But it soon caught the eye and admiration of that small circle of French philosophes known as the Encyclopédistes. André Morellet, an abbé of the Sorbonne, recalls in his Mémoires that it was the statesman Guillaume-Chrétien de Lamoignon de Malesherbes who first became interested in Beccaria’s essay. Malesherbes had a few guests over for dinner—Turgot, at the time intendant of Limoges; Jean le Rond d’Alembert, the philosopher and co-editor with Denis Diderot of the Encyclopédie; Morellet; and a few others—and, having just received Beccaria’s tract from Italy, discussed the new work with his guests. “He was troubled by the length and obscurity of the introduction, and was trying to rephrase the first sentence,” Morellet recalls. “‘Try to translate this,’ de Malesherbes told me. I went to his library and returned with the phrase as it is today. Everyone was satisfied and pressed me to continue. I took the book with me and published it in French six weeks later.”²

Morellet’s recollection may have been somewhat fanciful, but his translation, Traité des délits et des peines, was made public at the end of December 1765.³ In a letter to Beccaria a few days later, dated January 3, 1766, Morellet sent the young author the compliments of Diderot and d’Alembert; the philosopher Claude Adrien Helvétius; the naturalist Georges-Louis Leclerc, count de Buffon; Paul-Henri Thiry, baron d’Holbach; as well as David Hume who was at the time living in Paris—all of whom, Morellet wrote, had read and greatly enjoyed the translation. Hume, in fact, had read both the original and the translation in detail.⁴ Morellet informed Beccaria that he had also delivered a copy of the book to Rousseau, and, in that January 3 letter, invited Beccaria to Paris.⁵ D’Alembert, Diderot, Helvétius, d’Holbach, Malesherbes, and Morellet all wanted to meet and converse with the Italian, who was only twenty-eight years old at the time.⁶

Beccaria arrived in Paris in October 1766 and in short order met them all, as well as other notable thinkers and courtesans, such as Jean-Charles Philibert Trudaine de Montigny, the Marquis de Chastellux, Suzanne Churchod Necker (the wife of Jacques Necker, the future finance minister), and Marie Thérèse Rodet Geoffrin.⁷ Beccaria had an abbreviated stay in Paris—he fled Parisian society earlier than expected in December 1766, leaving behind some skeptics—but his visit caught the attention of Voltaire, who wrote an anonymous pamphlet commenting on and praising his work.⁸ Voltaire’s “Commentaire sur le livre des délits et des peines” was printed regularly as a preface to Morellet’s translation in all subsequent French editions, propelling Beccaria’s tract to fame.⁹

“I am ashamed to write about these matters after what has been said by the author of On Crimes and Punishments,” Voltaire confessed. “I should limit myself to hope that we all and often reread this great work by this lover of humanity.”¹⁰ In a letter attributed to Voltaire, dated May 30, 1768, Voltaire thanked Beccaria “with all my heart. These sentiments are those of the entire Europe. . . . You toil on behalf of reason and humanity, both of which have been quashed for so long. You revive those two sisters, beaten for over sixteen hundred years. They are finally beginning to walk and talk; but as soon as they do, fanaticism again rears its ugly head.”¹¹

In a time of brutal corporal punishment, Beccaria’s tract advocated for the abolition of the death penalty, for measured and proportional punishments, for the end of torture, and for equal treatment regardless of nobility or wealth—and within several years, as Franco Venturi, a leading historian of the Italian Enlightenment, notes, “the triumph of Beccaria’s work could not have been more complete in Parisian intellectual circles.”¹² Its influence extended swiftly well beyond Europe. Beccaria’s work was lauded by the Empress Catherine II of Russia, who invited him to rewrite the Russian penal code. Thomas Jefferson copied whole pages of the work into his diary and drew on it in his effort to abolish the death penalty.¹³ John Adams was quoting Beccaria’s text as early as 1770 in his defense of those implicated in the Boston Massacre.¹⁴ In short order, Beccaria’s tract became known as the Enlightenment text on punishment—the epitome of Enlightenment reason in the field of crime and punishment.¹⁵

In this reading, On Crimes and Punishments became the very symbol of the Enlightenment—an impassioned critique of the excessively brutal, arbitrary, and unequal punishment practices of the seventeenth and eighteenth centuries, and a manifesto for legal reform centered on the Enlightenment values of lenience, rationality, justice, and the rule of law, in the tradition of the French philosophes of the Encyclopédie. The text offers a passionate plea against the use of judicial torture to extract confessions from the accused, as well as to exonerate guilt; against the use of secret evidence and accusations; against sentencing inequalities based on wealth and social status; and against excessively brutal corporal punishments and the death penalty. Beccaria closes the book with this sentence, which captures well this reading of his tract: “In order that punishment should not be an act of violence perpetrated by one or many upon a private citizen, it is essential that it should be public, speedy, necessary, the minimum possible in the given circumstances, proportionate to the crime, and determined by the law.”¹⁶

Beccaria, the Rational Action Theorist

Today, in the United States at least, Beccaria’s short tract receives a quite different reading. On Crimes and Punishments is celebrated as the first economic analysis of crime and Beccaria is revered as the first economist to have applied rational choice theory to the field of crime and punishment. Beccaria is portrayed as the first to have rigorously applied the tools and logic of economics to criminal justice issues.

In part, this was Jeremy Bentham’s doing. Bentham traced many of his greatest insights to Beccaria—including “the sacred truth that the greatest happiness of the greatest number is the foundation of morals and legislation.”¹⁷ As H. L. A. Hart recounts, Beccaria’s treatise was the cornerstone of Bentham’s conception of “moral arithmetic,” which was at the heart of the utilitarian philosophy he developed.¹⁸

It was thus Beccaria as economist who came to the foreground in the nineteenth century and in the Anglo-Saxon world—which is not entirely surprising. After all, after fleeing Parisian society and returning to Milan, Beccaria was appointed to one of only three chairs in public economy established during the eighteenth century—the newly created Professor of Cameral Sciences at the Palatine School in Milan, endowed and bestowed by the Holy Roman Empress Maria Theresa of Austria in 1768.¹⁹ Beccaria taught public economy for two years before entering public service as an economic adviser and civil servant for the Milanese republic.²⁰ Joseph Schumpeter, in his magisterial history of economic thought, actually placed Beccaria at the fountainhead of classical economic theory—with Adam Smith and A. R. J. Turgot. Schumpeter in fact called Beccaria “the Italian A. Smith,” and Adam Smith “the Scottish Beccaria.”²¹

More recently, contemporary scholars of law and economics have embraced Beccaria as one of their own. Richard Posner traces his intellectual genealogy, in the area of penal law, specifically to Beccaria. In introducing his economic model of criminal law in 1985, Posner writes: “The economic analysis of criminal law began on a very high plane in the eighteenth and early nineteenth centuries with the work of Beccaria and Bentham, but its revival in modern times dates only from 1968, when Gary Becker’s article on the economics of crime and punishment appeared.”²² Gary Becker too, in his influential 1968 paper “Crime and Punishment: An Economic Approach,” appropriates Beccaria: “Lest the reader be repelled by ...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• The Paris Marais and the Chicago Board of Trade
• Chapter 1: Beccaria on Crime and Punishment
• Chapter 2: Policing the Public Economy
• Chapter 3: The Birth of Natural Order
• Chapter 4: The Rise of Legal Despotism
• Chapter 5: Bentham’s Strange Alchemy
• Chapter 6: The Chicago School
• Chapter 7: The Myth of Discipline
• Chapter 8: The Illusion of Freedom
• Chapter 9: The Penitentiary System and Mass Incarceration
• Chapter 10: Private Prisons, Drugs, and the Welfare State
• A Prolegomenon
• Notes
• Bibliography
• Acknowledgments
• Index