Crime Solving, Libertarian Style

In a previous post, I talked about a future where we would live under a completely private criminal justice system.  No centralized government or force with a monopoly power on creating and enforcing laws.  The main point I made is that this future system would focus on restitution for the victim.

Basically, you’d have insurance coverage for crime.  Just like insurance covers you if your house burns down, you could have insurance that would cover your losses in the event of an assault, battery, robbery, fraud, rape, and even murder.  The insurance would pay you for your losses.  The insurance company would then recoup its losses by finding the criminal, prosecuting them, and extracting restitution from the guilty person.

Today, I want to talk about actually solving the crime in a free market system.

There would be a tremendous demand for solving crimes and apprehending criminals in a free society.  Even more so than there is today, actually.  The insurance companies would want to recoup their losses and prevent future losses.

Today, voters often demand that their politicians be tough on crime, but in practice government isn’t very good at solving crimes.

Problems with government crime solving

First, we have bureaucracy.  For the most part, if a crime happens in a certain jurisdiction, the only group that is allowed to solve that crime is the local police department.  If you happen to become a victim while in a poor neighborhood, the odds of that crime being solved are smaller.  Not only do they have less resources, but there are usually a greater number of crimes in poorer communities.  Even if you live in a wealthy area, if the local department is ineffective, there’s no competition to turn to.

You’re stuck.  You could hire a private detective to help out, but what’s the point?  If the criminal is caught, he just goes to jail.  You aren’t able to get restitution for your losses or for the costs of finding the criminal.  Plus, you have to pay more in taxes to jail the guy!  It’s lose, lose, lose.

To make matters even worse, police departments are just like any government agency.  The more they fail, the more money they can claim they need, and often the more money they get.  This actually creates economic incentives for police departments to get worse at solving crimes, not better!

The second problem is the continued prosecution of victimless crimes.  There are only so many resources to go around, and large amounts of resources are used to go after people who are simply voluntarily exchanging goods and services outside of the formal economy.  This means less resources are being used to find violent criminals.

How free market crime-solving could look

A free market in solving crime wouldn’t have these hindrances.  Victimless crimes wouldn’t exist.  If my neighbor does drugs in his home, or sells his body for sex, how can I take him to court?  I’d have to spend my own money to take the case to a court, and when I lose for failing to show my rights were violated, I’d have to pay his court costs as well.  With no government to enforce random prohibitions, the entire crime solving profession would be freed up to pursue violent criminals.

Bureaucracy could still be a problem.  Once an insurance company pays you for your claim, they now have to find out who committed this crime and apprehend them in order to recoup their lose.  Some companies might have their own detective division that they would turn to.  But this would be almost as inefficient as just having one police department to solve a crime.  The costs would go up and the quality would go down over time.  My guess is there would be more of a division of labor.

When an insurance company pays out for a crime, they might have a few local people on the payroll to investigate, but I’m envisioning more of a bounty situation.  They could simply offer a reward to anyone who could gather enough evidence to convict someone and bring them in for the trial.  This would unleash the forces of competition to get the best results in the most cost effective way.  Instead of having just one local police department responsible for solving all crimes in a specific area, there could be an unlimited number of detective agencies or individuals attempting to solve the same crime in the quickest, and most cost effective way.


There are many reasons to be skeptical about a competently private crime solving industry.  The fact that it would be a huge leap to go from here to there is enough to scare most people.  Many of us simply have a hard time imagining that entrepreneurs could come up with ways of making it happen.  But look at any industry when people are largely left alone from government interference.  With freedom, people and companies are able to create amazing inventions and solve seemingly unsolvable problems.  Before slavery was abolished, many people thought the economy would crash if they ever got rid of it.  But after the abolition, the economy had tremendous growth.  Entrepreneurs found better ways to farm without free labor, and their inventions and techniques ushered in an era of economic growth never before seen.


Corruption, however, is a very real possibility.  There are two kinds of corruption I can see happening.

First type:  the criminal buying off the detective agency.  Let’s say a criminal has orchestrated a fraud that caused him to become wealthy.  A detective agency could come to him and say “Give us a million dollars or we’ll turn you in along with all this evidence that we’ve got.”  But there’s one huge problem with this.  Just because you’ve bought off one agency, doesn’t mean another won’t be right behind them.  You might even buy them off too.  But you won’t be able to buy everyone off.  Eventually you’ll run out of money or run into an agency that wants to keep its reputation clean.  Or simply wants to do the right thing.  Today’s system is actually much more likely to fall victim to this kind of corruption.  After all, if you can just bribe or scare a few local yokals, you could be good.  Or, in the case of Hillary Clinton, if you can stop one person in the “Justice” Department from prosecuting you, you’re free!

The other type of corruption is falsifying evidence.  If a detective agency wants to get their reward money before anyone else, it would be in their interest to turn someone in as fast as possible.  This might cause an agency to falsify something in order to make someone look guilty.  Or if they have found the guilty person, they might want to falsify some evidence to strengthen the case so they can be sure he’ll get convicted.

Again, this is also a problem today.  There is little or no consequences for a police officer or prosecutor if they falsify, plant, or withhold evidence if it helps their case.  Prosecutors have immunity from being prosecuted for their transgressions. And good luck convincing a prosecutor to go after a police officer that has planted evidence.  They are brothers in arms.

So would a private system see more or less of this?  A lot less.  In a private system, if a detective agency gets caught falsifying evidence, their reputation would be gone.  Good luck getting an insurance company to accept your offers in the future.  Not only could they not trust you and your evidence, but the court would have a hard time convicting someone based on evidence acquired from a notoriously untrustworthy source.  Not to mention, any person that actually planted or falsified evidence could be held personally liable for damages caused by their actions.  Who’s going to plant evidence if they know their personal job, bank account, and freedom is on the line?

Plus, just because one agency falsified or planted some evidence, it doesn’t mean that another agency couldn’t show the insurance company a better and completely true file of evidence and end up getting the reward money.  The insurance company could then turn around and sue and expose the company that planted evidence.  Competition would push out the bad agencies in favor of the good ones.

When a freer market and unfettered competition are allowed to flourish in an industry, the benefits to everyone involved always increase exponentially.  I’m hoping we get to see this happen in the crime solving industry as well.

This article was originally published on Mike’s website