Americans are 5% of the world population, but 24% of the world’s incarcerated populace is here in the US. Everyone says this is a problem. They argue we have too many people in jails. I agree that there are people in jail for the wrong reasons, like minor drug offenses. And I agree that sentencing guidelines have become arcane. Most importantly, I think the criminal justice system targets certain groups of people unfairly and needs reform.  But I would argue that our high incarceration rates are generally a reflection of something positive.

• A society advances when it has a strong economy.
• A strong economy creates demand.
• Demand creates jobs.
• Jobs allow people to grow and thrive.
• When people thrive, capitalist forces push for better jobs which translates into the need for a more educated workforce.
• More education should lead to lower crime and poverty

These are some broad strokes and yes they are nuanced in a true economic sense, but I tend to think they are axiomatic. Basic economic theory in this case, insinuates that capitalism pushes the world to evolve into a smarter, better and wealthier place.

The key is that none of these economic forces can take hold without a level playing field. We need the rule of law. It’s what keeps the capitalistic forces evenly distributed.  It is the force that drives us to want to do better. If there was no rule of law, everyone would cheat. There would be no incentive to do something better or more efficient.  The law is what makes us strong. It’s why the Constitution is such a remarkable document and guiding philosophy.

I may be oversimplifying, but look at China’s growth vs sub-Saharan Africa over the past 20 years.  I have long postulated that China’s exponential growth started in 1998 when President Clinton, fought to grant permanent Most Favored Nation trade status.  Prior to that, each year there would be a big Congressional debate about human rights abuse and China’s status in the world.  It created uncertainty.  No business leader wants uncertainty.  Moving manufacturing to China is much easier when you have trade stability.  Economic uncertainty is like lawlessness.  There is no level playing field when political forces are always pushing one end of the scale or the other without predictability.  MFN was the last piece China needed.

At home, the Communist Party maintains such a tight legal control of the country, that while there is some corruption, the law is enforced on domestic players.  There is never a worry of political coup in China.  As a result, the trinity of cheap labor, political stability and rule of law makes China a natural focus for growth with US companies creating the potential for cheap goods (electronics, appliances, etc).

Contradict this with Africa.  There are very few stable government institutions.  Enforcement of laws (if they exist) is haphazard and inconsistent.  Kenya is at the forefront of getting things together, but widespread corruption and recent voting irregularities continue to stifle investment.  Global companies are hard-pressed to invest in a place that can’t maintain the basic rule of law.  They need predictability and stability to plan future business operations and significant capital investment looking for high ROI.  You can’t predict production, sales, growth, or CGS when all of the geo-political variables are constantly in flux.

The rule of law is good. And our incarceration rates reflect that we take the enforcement of law seriously. Corruption in its truest sense (not the political notion of a ‘swamp’) is relatively non-existent here. It’s why we thrive.  People in jail means we are enforcing the law, creating a level playing field. I know the natural reply is that we need more white collar violators in jail…maybe so.  But a vigorous prosecutorial collective enables us to continue to grow.

There are always going to be bad people.  The fact that ours are in jail is a good thing. We should recognize that this is what makes us so successful. Only then can we fix the problems that continue to plague the enforcement of the law.

“And they began to wail”