Imprisonment often further brutalises criminals and frequently fails to rehabilitate them.
Morally, the criminal owes restitution to the victim, as far as is humanly possible. And, historically this is what tended to happen until governments monopolised law and order.
One of the things which puts people off the idea of fines as punishment is that it seems too soft. However, restitution does not merely consist of the criminal being made to return the equivalent of his stolen goods to his victim.
Firstly, he must pay additionally for the trauma or secondary losses which accrue to the victim and possibly to the victim's relatives, friends or business associates.
Secondly, depending on how much is involved in police and court time in bringing the criminal to justice, he must pay for these as well.
It is implicit that, depending on the nature of the crime and the criminal, he might have to be subjected to some degree of confinement while repaying his debt. If, in order to repay his debt, the criminal required education and job-training, he would have to pay for the costs of these as well. If the criminal refused to co-operate with such a procedure he could be left to starve until he co-operated. There should be no requirement for the penal institution, insurance company or anyone else to bear more costs than are necessary for the upkeep of a willingly unco-operative individual.
It can thus be seen that the cost to a criminal under a restitution-based system of justice would be very high. It would be high if he complied with his punishment and even higher if he did not. But it would offer him incentive towards moral behaviour. The more co-operative the criminal, the more quickly he would be able to repay his debt and, if necessary, escape confinement. How much confinement there would be, in addition to restitution, could be settled in the market, in terms of how effective it was and what consumers (subscribers to protection agencies) desired. It is apparent that, under such a system, many prison sentences would be longer than is the case under the current system of justice. But, unlike in the present system, there would be a mechanism where, as far as possible, criminals were forced to bear the costs of their own imprisonment, on the principle that, morally, aggressors should assume the full costs of their aggression.
Two questions immediately spring to mind. What if criminals either could not pay off their debts (especially restitution to the victim) quickly enough; or what if, due to intellectual ineptitude, or the size of their debts, they could not pay them off at all?
Most modern theories of stateless law and order envisage that individuals would contract not only with protection insurance agencies (for police protection) but with restitution insurance agencies (for guaranteeing restitution). In practice, the two might be offered as a single package. Then, when someone became a victim of crime, his insurers would pay him the restitution immediately, in lieu of the criminal paying. The protection agency would pursue the criminal and recover its costs (or as much of them as possible) from him. Notice that this would make such insurance agencies either more profitable than, or at least as profitable as, ordinary insurance companies. Unlike ordinary insurance companies, who lose the entire sum of any money they pay out, restitution insurance agencies could expect to recover much of what they pay out.
Incidentally, the possibility of buying restitution insurance also provides a way out of the 'free rider' problem. Certain people could decide not to pay for police protection on the grounds that the fact that others in the vicinity were paying for it would, in itself, reduce the crime rate. However, if someone with no insurance were to become the victim of crime he would have to rely on the ability of the criminal to pay him restitution and this might either take a long time or be impossible for the criminal to do. Such an eventually would give the uninsured an incentive to, at least, purchase restitution insurance, if that were available as a separate option. But, in order to be offered a policy, the restitution insurance company would require that he purchased protection insurance as well, so as to reduce the possibility of his becoming a victim of crime and to increase the likelihood of any criminal being caught and being made to recompense the insurance company.
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