HERE comes one of my favourite illustrations of economics in action. For many decades in the 19th century, Britain sent its convicts to Australia. Only 50 per cent survived the trip. One day Edwin Chadwick, the early public health inspector, took a walk with Jeremy Bentham by the Thames watching one of these grim hulks loading its human cargo.
Bentham asked Chadwick about the nature of the contract with the charter ship owners. Chadwick said the owners were paid a fee for number of convicts boarded. Bentham suggested a minor adaptation. Let them be paid instead for those disembarked at Botany Bay. The death rate fell from 50 to 2 per cent as the convicts were now better fed and tendered.
There you have it. Private enterprise, properly directed, can transform an ugly situation. The government can still be the procuring agent. It need not perform the task.
If I were to take any single Scottish institution which was demonstrably failing I confess I'd shortlist the dreadful nature of too many schools but I would have to plump for the Scottish Prison Service (SPS) for No.1.
It costs us £32,700 to keep each of our 7,000 prisoners in custody. What do we get back ? More than half will re-offend. Very often they will have refined their skills in theft or other criminal expertises.
Michael Howard had a mantra "Prison Works". I'm baffled. I can think of no entity that works less well at such vast expense.
The Scottish Prison Service is the very essence of socialism in practice. It is a failure. "Prison does not work".
Note, I am not arguing Tony Cameron, supremo of Scotland's prisons, and his SPS colleagues, are inept, lazy, cruel, incompetent or anything worse. Far from it. In fact I detect high-minded good intentions in the prison service yet I stand amazed that a prison such as Barlinnie only stopped the degrading "slopping out" after 122 years of saying this was the intention.
I do not want to be starry-eyed about prisons. It seems to me a good proportion of captives are better understood as psychiatrically ill. In 100 years' time everyone will express astonishment we treated the mentally wounded in such a cruel fashion. Again, this is not so much the turnkeys' fault. It is the courts which seem to fail to understand the nature of mental illness.
Another big proportion of prisoners strike me as less than villainous.
They come from those other great failing Scottish ideas - council estates and dross schools. Most prisoners are broken souls demoralised by blighted youthful years. A lot cannot write, count or read, however many millions have been wasted by local authorities in "educatio