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.