– June 2, 2020
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Rodney King. Timothy Thomas. Michael Brown. Keith Lamont. Breonna Taylor. Philando Castile. George Floyd. This is an utterly incomplete list of individuals whose often fatal interaction with the police have been followed by mass protest and civil unrest. America keeps reliving the same episode of racial tension. Perhaps intensified by months of home confinement and a sustained bout of involuntary unemployment for many, this episode is reminiscent of the response of many to Rodney King in 1992.

As I write, I am listening to explosions outside of my window (whether firecrackers or the sound of rubber bullets, I don’t know) as protests have made their way even to small cities. The problem that we face is not germane only to Minneapolis, nor is it only present in large cities. This tension being felt across the United States has been boiling for decades.

Jay Schweikert at Cato Institute points to qualified immunity as a significant input into the unraveling of relations between police and many in the communities that they serve. In theory, the law is supposed to protect officers who take appropriate precaution, but perception is that it grants boilerplate protection in practice. 

Being American, I am familiar with the periodic flare ups in cities across the U.S. that result from indignation among minorities concerning their treatment by police. The theory that qualified immunity plays a vital role in instances of police brutality, like that observed in Minneapolis with George Floyd this week, posits that protection of police from legal consequences when their engagement becomes brutal incentivizes officers to act carelessly. 

If this interpretation is correct, then qualified immunity acts as a legal insurance for police officers. Each day, officers face the possibility that their lives could be taken in violent conflict, even if they perform their duties perfectly. Even an officer as kind as Andy Taylor from The Andy Griffith Show faces this threat. Qualified immunity is supposed to protect officers when a situation escalates due to no fault of their own. Schweikert notes that qualified immunity has, in practice, led to systemic acceptance of misbehavior by police officers, noting that even Fox News and CNN agree that the legal doctrine is problematic.

If Schweikert is correct, police brutality is an institutional problem, as opposed to an inherent bias in your average police officer. It is especially problematic as it promotes an increase in the severity and rate of occurrence of violent outlier events. The consistent, if periodic, occurrence of episodes akin to the recent incident with George Floyd and resultant civil unrest seem to bear this out.

In economics, we refer to incentivization of poor behavior from insured parties as moral hazard. Taking as given that qualified immunity incentivizes moral hazard, we must inquire concerning a reasonable path away from what appears to be a suboptimal equilibrium. Insurance provides protection from extreme events. Absent insurance, individuals must bear risk, which is to say that they are subject to increased costs. 

If qualified immunity has been acting as insurance for police officers, to retire the legal doctrine would lead officers to bear greater legal risk. The theory goes that in bearing this risk, officers will be incentivized to engage in their service more carefully. But this does not change the fact that the officers will be bearing greater cost than they would otherwise.

Gordon Tullock taught us that gains provided by institutional arrangements to specific parties at a cost to the broader population are especially difficult to remove. He called this the transitional gains trap. The obvious way to transform an institution that incentivizes suboptimal outcomes for those not benefited by it is to compensate those who are benefited by the existing institutional arrangement. This will incentivize widespread acceptance of the transformation of the institution, potentially promoting superior outcomes for those who had not benefited from the previous system. 

Without qualified immunity, officers would likely demand higher compensation to offset the increase in risk that they bear as a result of the retirement of the legal doctrine. This might come in the form of higher wages and promise of legal support for officers in cases where conflict leads to legal dispute. This would encourage officials to openly support the end of qualified immunity while communicating to officers that the community supports them. To ensure that officers are compensated says, in effect, that we appreciate the risk to their own lives that they take each day in service of their communities.

Building support that could effectively end QI would also build political capital among those upset at the current state of relations between their communities and the officers that police them. It could bring us peace when we need it most, as the nation emerges from social and economic burdens brought by the COVID-19 pandemic and the response. 

James L. Caton

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James L. Caton is an Assistant Professor in the Department of Agribusiness and Applied Economics and a Fellow at the Center for the Study of Public Choice and Private Enterprise at North Dakota State University. His research interests include agent-based simulation and monetary theories of macroeconomic fluctuation. He has published articles in scholarly journals, including Advances in Austrian Economics and the Review of Austrian Economics. He is also the co-editor of Macroeconomics, a two-volume set of essays and primary sources in classical and modern macroeconomic thought. Caton earned his Ph.D. in Economics from George Mason University, his M.A. in Economics from San Jose State University, and his B.A. in History from Humboldt State University.

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