Comments (119)

• BioTube

  He made a fool of the government; of course he's getting every book on the shelf thrown at him.

  Published: July 2, 2009 7:53 AM

• Nielsio

  Amen.

  Published: July 2, 2009 7:58 AM

• Brian Macker

  "What is the point of jailing him?"

  He can't pay off his victims so the point is retribution. To give some psychological benefit to his victims. I don't know if you've ever been the victim of a crime but there is anxiety associated with knowing the perpetrator got away with it.

  Retribution is backwards looking. Your comment is only the forward looking half of the equation.

  Without the backwards looking element then criminals have greater incentive to commit crimes for which they do not have the financial ability to pay. This incentive is higher for criminals who either do not have much human capital, or who can shift their capital to others they value more highly.

  Published: July 2, 2009 8:01 AM

• Bogart

  He isn't that big of a thief. Neither are Keating, Boesky, Stewart, etc. They are only hiding the real thieves the government and its agents in the central banks. I just received 250 for being a veteran from the stimulus. So I pay thousands per year in taxes to people who return 250 and BRAG about it.

  This is sick. Some of these folks Stewart in particular are not even guilty of a crime.

  And the only irony is that now tax payers must foot the bill to house Madoff for the rest of his miserable life.

  I wonder if Madoff is a veteran and got his 250? That would be better irony.

  Published: July 2, 2009 8:19 AM

• greg

  You are missing the point! The reason for the 150 years is to send a message to the markets that if anyone out there wants to do the same thing, they can look forward to the same level of punishment.

  Furthermore, he had help in this fraud and when they catch up with all those involved, they too can look forward to long prison terms.

  Again, it is protection of property rights, a concept a true Austrian economist should embrace. While the government and markets failed to prevent this fraud from happening, the courts can do as much as they can to prevent this in the future and return as much as they can find to the victims.
  

  Published: July 2, 2009 8:29 AM

• Dave Kraus

  The message should be sent to the investors. Invest within your circle of knowledge.

  Published: July 2, 2009 8:39 AM

• Harry Valentine

  The last thing the government would want is Bernie Madoff writing a book about how the system of economic regulation failed. It would certainly be a very informative book that would embarrass state officials.. Bernie Madoff could only achieve what he achieved in a heavily regulated environment because economic regulation was grossly flawed and because it ultimately failed to achieve its intended objectives.

  Published: July 2, 2009 8:39 AM

• Justin Ross

  It seems to me that you can justify such a punishment on the grounds of deterrence. The phrase "make an example out of him" comes to mind.

  Published: July 2, 2009 8:47 AM

• BioTube

  True restitution to his victims would require forced labor with all his wages redirected to repayment(maybe a small amount exempted for room and board). Revenge and deterrence could be served as well if the job was especially humiliating.

  Published: July 2, 2009 9:10 AM

• Dick Fox

  Consider that Madoff was a creation of the credit expansion. His fall came because of the bust part of the ABCT. For most of his life he had run the same Ponzi scheme because he had the proper political connections. No one questioned Bernie.

  Not until his house of cards built on the shifting sands of a massive money supply expansion for most of his life. Bernie was just doing exactly the same thing as every broker in Fannie and Freddie plus just about every other federal agency that deals with housing. They played on the inflation created by the floating dollar.

  Bernie was financed by the Federal Reserve. Perhaps rather than freeing Bernie we should just put all of them in a cell right beside him.

  Published: July 2, 2009 9:27 AM

• dean

  While there are certainly differences in opinion - basically in the nature of deterrence - your thoughts serve to inform and bring to light a more full understanding of the state's solution to so many varried "crimes" - excellent article!

  Published: July 2, 2009 9:28 AM

• Ron

  I think there are a number of reasons he is being jailed. Personal safety would be one consideration as there are at least two groups that would perhaps like to see him dead or injured.

  One would be the people most hurt from his scheme and those that were his accomplices in hide the money from his scheme.

  I think the government would prefer they be the beneficiaries of that information, should he decide to talk and in prison he may get to live long enough to give up some information.

  Philosophically there is no reason to jail a ruined man however the reason for jailing are hardly philosophical.

  Published: July 2, 2009 9:31 AM

• Brad

  There is a split issue here. People should always be their first line of defense against attacks against life and property. People who blindly shove their money into a hole and assume everything is fine bear some responsibility for their loses.

  But it stands that by lying and chicanery an attack was made on other people's property. Who a person is, above and beyond a naked animal cudding fallen fruit and lapping water from a stream, is the store of his or her labor in the form of EQUITY. If we are to have a division of labor and a system whereby people aren't cattle eating up the seed corn, then we must have a RELIABLE system of trade and transfer which requires a virtuosness of the players involved.

  Attacks against people aren't simply physical. Should a burglar who is a good joe and cases your house and waits until you are gone not be seen as an attacker on your property, or be seen differently? Simply because you gave your money to a bank and they "lost" it isn't an attack upon you?

  Sure Madoff isn't likely to be able to pull of major schemes again, at least here in the US. What's to prevent him going somewhere else? Billions were lost, who's to say that a tidy sum of millions wasn't tucked away somewhere? All he has to do is fly off and meet up with such money and harldy life like a pauper?

  And looking at it this way, the use of jails serves more than just a means of punishment for the one in jail. It is the House in which a civilized society calibrates between perpatrator and victim. All these people who lost millions are prevented from gaining vengeance for the huge attacks upon them. If the likes of Madoff run free, justice will take the form of a lynching. If we don't have a system of justice and an executive system to house attackers of property, people will take matters into their own hands. I don't think that left free and clear with a bad reputation would leave Madoff with a long remainder to his life. Are we, then, going to put the person who was ruined financially who offs him be put in prison?

  Basically, WHO we are is based on not on just existing, it is our property as well. And when someone walks off with a goodly chunk of your property, force is legitimate. If we aren't going to return to a system of duelling, then a compromise is housing that person in an iron and cement box. Of course, the cost of doing so should be much less than it is today. Perhaps that's part of the problem having to spend so much on those who deserve to be in such a box.

  Published: July 2, 2009 9:34 AM

• Dick White

  A number of commentors cite the signalling feature of the sentence which is one reason. The other, it seems to me, is the punishment feature---his loss of liberty, a fair price for such a serious crime.

  Published: July 2, 2009 9:37 AM

• Bleakend at Bernie's

  Bernie's sentence may appear very harsh at the outset,but in a couple of months, when he is out of the limelight,he can be moved to the Sheridan Federal Correctional Institution,or similar institute; a comparitivley luxurious setting for a corrections facility.I 'm gueesing this is because he has not disclosed all those who have worked with him in this scheme (you really don't think he did it all alone,did you?).
  http://www.youtube.com/watch?v=mMQTiD-FAlw&feature=fvw
  Of course,we will foot the bill for all this.
  Sir, do you want fries or chips with your Justice ?

  Published: July 2, 2009 9:41 AM

• Kris

  While I'll agree with your assessment of the situation regarding his rehabilitation I completely disagree with the Free Bernie Madoff sentiment. The man committed a crime and must be held to the same standards of law as the rest of us. I believe in a free market and civil society, neither of which can exist without rule of law. A free Bernie Madoff would be a serious miscarriage of justice.

  Published: July 2, 2009 9:47 AM

• Bogart

  Greg:
  The "justice" system is sending a signal, that is if you steal as part of Goldman Sach's cabal or of the Federal Reserve cabal or of any government, then that is fine. But woe to the person that goes out on their own. They get hosed.

  There is no signal to be good, and punishment does little to deter people. Incentives do. If we did not have a bubble then folks would be much more weary of putting all their eggs in on Madoff basket.

  Published: July 2, 2009 9:48 AM

• Chet Novak

  The best predictor of future action is past action. Are you people NUTS? You all sound like Obama, trying to talk the enemy into giving up the decade long hostility towards anyone who does not subscribe to their beliefs. Madoff did learn from this. Maybe he learned what to do so as to not get caught next time if allowed to be free. I do agree that our political system is "super-corrupt". At the risk of being labeled a fruitcake, I say it is time to take back from our "representatives" in Congress (who only represent their own interests). What, short of a revolution, will change things? But letting Madoff out will only add to the criminal base. Who knows; he might even get an appointment to the Fed. And "We the people" sit here with "SUCKER" on our foreheads. Remember Charlie Brown and the attempts at kicking that football. How many Charlie Browns are we?

  Published: July 2, 2009 9:53 AM

• Gaurav Ahuja

  I agree with every point. However, what if you think the people that have stolen our money in the government should be treated even worse than Bernard Madoff since the people in the government continuously rob us of money that many people cannot even imagine. The money is hard to imagine since there is taxation, inflation, and borrowing. In addition, there is money that would have been made if not for the existence of the state with all of the various regulations and limits that are put on mankind directly and indirectly. I think all libertarian anarchists can agree that the government should stop maintaning and forcing people into prisons for any reason, even if you think Bernard Madoff's punishment by the government(s) isn't even harsh enough.

  Published: July 2, 2009 9:54 AM

• Matthew Houseward

  I agree with Mr. Tucker, the prison system isn't really providing justice in most cases.

  However, Mr. Tucker completely neglects the right to retribution/restitution of the victims. Justice is not about rehabilitation or preventing further harm by getting dangerous persons off the street. First and foremost, it's about retribution and restitution.

  In this case, I think civil penalties would probably be adequate since his crime was non-violent theft. You steal an ox, you pay back two. You steal $50 billion, you pay back $100 billion. If that means Madoff works to pay off his debt to his victims for the rest of his life, then so be it. If his victims decide that he has suffered enough, then they can forgive his debt.

  Published: July 2, 2009 9:59 AM

• John L. Wright

  Actually, the clink is probably the most humane option for Madoff at this point. I don't think he's being punished as much as he is being protected. If he were to go free, he'd probably end up dead before he could back all the way out of his driveway - in his Ford.

  Published: July 2, 2009 9:59 AM

• Sovy Kurosei

  Sending Madoff to jail wasn't to punish or rehabilitate him. It was to deter others from committing white collar crimes.

  Published: July 2, 2009 10:02 AM

• michael

  Perhaps this would be a good time to review ALL of our sentencing guidelines, as we now have well over two million Americans behind bars (2.3 million as of July, 2007). And no more than a quarter of them for violent offenses.

  What price should a man pay for theft from his fellow? Not far from me there is a man serving a thirty year sentence for stealing a hundred dollar television set. Assuming the total for Mr Madoff's crimes to be $50 billion, that would equate to a fifteen billion year sentence.

  However I do take away the point that Mr Madoff is "one of us". And thus deserving of more merciful sentencing than the kind of scum that would stoop to stealing someone's TV set.

  Published: July 2, 2009 10:11 AM

• Casey Khan

  I kind of agree with Matthew Houseward, there are valid retributive reasons for jailing Madoff. Is there a libertarian theory of retributive punishment? Has Kinsella or even Rothbard examined this issue?

  Published: July 2, 2009 10:11 AM

• Tom Henderon

  I am surprized at Tucker's logic, and disappointed in his use of straw men. In attempting to rationalize not sending Madoff to prison because "he is no direct threat" to anyone, could not the same be said for all con artists, pick pockets, car thiefs, or any other crime where fraud, not force is involved?

  What is the primary function of government in a free society? Is it not to protect the indiviual from fraud and plunder? How does government protect individuals from fraud, if not by some form of punishment.

  The answer to why Madoff should be sent to prison can best be found in the writings of Bastiat's "The Law", where he states:

  "When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labor. It is evident, then, that the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work. All the measures of the law should protect property and punish plunder."

  Tucker then seems to contradict himself by implying that life on the outside would be worst than life in prison, then a few sentences later defines the degradation of prison. In other words, the pain of plunder exceeds the pain of labor.

  Tucker then goes on to rationalize that since tax payers have to foot the bill, and victims get nothing, this is a double loss. Could not the same be said of all fraud and theft? Do we then assume that no fraud or property crimes be punished because tax payers have to pay for it?

  Tucker's logic becomes a little more confusing when he seems to defend Madoff actions by stating that Madoff's action were not that "unusuably evil" since the Social Security System is based on a ponzi scheme. Is this not trying to justify individual fraud by implying if politicians commit fraud, this is justification for individuals to commit fraud?

  Tucker misses the point entirely. The reason for punishment is not to "rehabilitate" or to induce remorse. Punishment is simply to make the pain of plunder more painful and more dangerous than the pain of labor. Tucker would do well to reread "The Law".

  
  

  Published: July 2, 2009 10:11 AM

• Mark

  There are many bases by which incarceration is 'justified'. Moral retribution, deterrence, and communicating proscribed behavior to society are the three that I would use to jusify the incarceration of a white collar criminal. I take no pleasure in disagreeing with the author's conclusions and the bases thereof.
  
  There are always those who assert that moral retribution as a basis is based on petty emotions like vengeance. This is a matter of personal opinion, and I am not aware of a rational way to dispose of such assertions--one either feels that way or not.
  
  The prevention of future crime is a nice feature of incarceration, but not the only or even main reason to incarcerate. Also, the presumption that madoff would not offend again is speculation--and at best applies on a case by case basis. Ponzi's life was a series of frauds and imprisonments, though his Boston scheme was his largest and most famous--it was not his last.
  
  But the deterrent effect strikes me as perhaps the strongest reason for incarcerating white collar criminals. Arguments against this are normally based on the rarity of successful prosecutions for financial fraud, but I believe the threat of incarceration weighs heavily in the mind of potential and actual criminals nonetheless.
  
  I think advancing the notion, on libertarian principles, of not incarcerating bernie madoff can lead us to inquire into some problemmatic aspects of libertarian theory rather than providing a convincing case to set bernie free.

  Published: July 2, 2009 10:14 AM

• Ben Ranson

  Considering the amount of money stolen by Mr. Madoff and his failure to account for it, prison seems appropriate. In the free market, Mr. Madoff would likely face indefinate imprisonment, or worse, until he does his utmost to aid with the recovery of the stolen money.

  How exactly has Mr. Tucker determined that Mr. Madoff's life is "now a wreck"? Many poor men with checkered pasts live pleasant lives in old age. If allowed to go free, Mr. Madoff could change his name, move to a new area and start over.

  I disagree with the contention that Mr. Madoff is not a threat to society. As far as I can tell, the man is a career criminal, and feels no remorse. Though he would not be in a position to start a new "investment" fund, a freed Mr. Madoff could easily use his talents to run small time confidence schemes.

  Should we free robbers of liquor and convenience stores because they lack the ability to pay the money back?

  Published: July 2, 2009 10:17 AM

• David M

  Wow...what a poor quality article...but I've come to expect that from Mr. Tucker. Generally, when I see his name on a piece, I don't bother to read to even read it, I am sorry I wasted time reading this one. (Actually, that is they way I feel about most of the articles on this blog; there is a very small signal to noise ratio, which, as any electrical engineer knows, is a bad thing. There are contributers that I do enjoy reading, such as: Roderick Long; Stephan Kinsella; Frank Shostak; and a couple others.)

  Anyway, that said, I think the people who have posted about retribution, restitution, and determent and property rights protection show a greater understanding of the issue than Tucker- although I do agree that Social Security is the same type of scam.

  Published: July 2, 2009 10:26 AM

• Mark

  Responding to an earlier post about restitution to victims, along with a penalty for their inconvenience... When a large Ponzi crashes, the victims are almost never made whole. Much of the money goes to pay investor's dividends, much is spent on the perpetrator's lavish lifestyle, and perhaps some is hidden away or diverted to friends and family.
  
  Victims of a Ponzi are almost never made whole, let alone awarded extra money. Certainly this is the case with madoff.
  
  There are moral/phiosophical discussions about whether financial penalties are an adequate alternative to incarceration--and I do not believe the wealthy ought to be able to buy their way out of trouble, but in this case, financial recompense is not on the menu.
  
  Again, such discussions where an apparently rational series of syllogisms lead to an absurd--or at least unsatisfactory--result, lead one to re-examine the argumentation rather than accept the absurd result.
  
  For instance, I recall a law school discussion of a Chicago School scholar giving the bases whereby a wealthy murderer ought to be able to compensate the family and so forth and avoid incarceration. This is a perfect example of an unsound argument providing excellent didactic value.

  Published: July 2, 2009 10:29 AM

• Michael

  Fraud is still a crime even in Libertarian Land. Perhaps a return to Austrian Economics - the core competency of the institute is in order.

  Published: July 2, 2009 10:41 AM

• clay

  The government is our criminal class. The government does not like the competition, and the government has the biggest guns. Madoff was not part of the government; therefore, he gets to go to jail.
  As long as people believe in government, they will get government.
  What do you expect?
  One of the remnant
  

  Published: July 2, 2009 10:46 AM

• Charlotte Juett

  I believe that you forgot to mention that it was not only the rich that got taken in this Ponzi scheme. It was thousands of middle class investors whose 401k's were wiped out when the funds they had invested in, invested in turn in Madoff's scheme. I think you need to rethink your case for freeing Madoff.

  Published: July 2, 2009 10:53 AM

• Vicky Davis

  Free him? H*ll NO! In fact, we should keep going with the prosecutions and clean house on Wall Street and then go to Washington DC.

  You don't think Bernie has some cash socked away in foreign banks? Come on.

  What kind of message does it send to the white collar crooks on Wall Street if you let Bernie out?

  What kind of society is it that rewards white collar crime and crushes the little guy involved in petty theft?

  I can't think of a single aspect of our society that isn't pathological. This idea by Tucker is just more evidence on top of volumes.
  

  Published: July 2, 2009 11:13 AM

• Michael JR Jose

  Well, I normally regard myself as taught if not enlightened by the Mises Daily mail, but not this time. I am reminded of the gangster films that show the crooks fleeing just before the boys in blue bust them, taking their 'ready to go' stash with them as they flee. But of course our Bernie would have his cash in various hard currencies in a Swiss bank account, and a backup of gold brick buried somewhere safe (diversification you see!). He could enjoy it in secret if was clever enough to grease a few palms...

  Published: July 2, 2009 11:18 AM

• Jon

  You are 100% correct. What a waste. Once again the United Disgrace of America proves its stupidity. Jail people for life for financial crimes and drugs (which the Government has no moral right to "regulate") and let violent murders, rapist and murderers out in 5 to 7 years or less. Good job USA. Set the example for the world....DOLTS.

  Published: July 2, 2009 11:22 AM

• Lee

  I know this article can't be in defense of what Bernie Madoff did, because he is a terrible excuse for a hedge fund manager. So I can only assume the article is about the sad state of the U.S. justice system, which I agree is a sham.

  Now if this guy stole from the mob (a different justice system) the punishment would be anything from a punch in the gut and a warning to pay everything back (for very small amounts) to the execution of this man's entire family (larger amounts).

  So really, if the U.S. really wants to see justice, all they have to do is announce that Mr. Madoff is no longer recognized as a human being (or at least no longer protected by the constitution) and publicly schedule a release date a week in advance.

  Wherever he's released, there's going to be a mob of people waiting to kick him in the face. That much money doesn't go unnoticed. Honestly, I wouldn't be shocked if there's someone waiting to shank Mr. Madoff inside prison right now.

  Published: July 2, 2009 11:23 AM

• Charles Bacon

  I have to imagine that Madoff is relieved to be in prison at this point. If he were free he would be in constant fear for his life. This is because Madoff is a ready scapegoat for the legions of those who made stupid investment decisions, hoping to get rich quickly without having to do the hard work that is always necessary to better one's state in life. I am sorry to say it, but I do not think Madoff would be safe any place in the U.S. or even in Europe, let alone in any of the neighborhoods in New York or Florida that he previously frequented and where he is well known. It is ironic, but in this case I think that the government is in fact protecting one of its citizens, Madoff, from harm, and preventing any of a number of other citizens from harming Madoff, thus committing a crime that they would no doubt later regret. It is unfortunate that the SEC did not do its job of protecting the people from the likes of Madoff as well as the federal prison system is protecting Madoff from the wrath of those he harmed.

  Published: July 2, 2009 11:31 AM

• Michael Lawrence

  If the people who really want social security were smart, they'd insist the government hire Madoff to rescue it. After all, when the government does it, it's okay.

  Published: July 2, 2009 11:34 AM

• David C

  I, for one, sort of like Tucker's approach. After all, if we view liberty as an ends, then the purpose of justice is not to punish, not to get revenge, not to teach people a lesson, not to set an example, nor to sooth or compensate the victims. While justice can have those effects, the purpose of justice is to secure liberties by containing those who violate them. Madoff is effectively contained, but our government and the federal reserve are absolutely not. After society gets nailed by the great hyper-inflation, I doubt anyone will give a damn about Madoff. He will be seen as a small player. His real crime was defrauding people of the money that the government and the federal reserve deem themselves entitled to defraud the people of. That is what he is being punished for.
  

  Published: July 2, 2009 11:34 AM

• Kevin Hall

  I said this from day one, if Madoff's business had been a "bank," he'd still be in business.

  Published: July 2, 2009 11:44 AM

• Greg

  Bogart,
  I agree, brokerage firms defrauded many investors as well as idiots like Jim Cramer. But as far as I know, none of them issued false statements to hide the scheme. And yes, you should not put all of your money in one basket, but most of these investors believed a person of their own faith would not screw them over.

  The question I have is what is going to happen to the taxes that were paid on those false gains? If the investors were paying taxes each year on the gains, they are limited to taking a $3,000 deduction on the losses for the year they had the loss. Then they can carry their losses forward to charge against future gains. Many of them will not have future gains.

  Now if the fund paid taxes before distribution to investor's account, losses against those accounts should be limited as well. And if they didn't show a gain, how could the SEC miss the fact the fund performance did not match the tax return?

  Or will the losses be charged as a theft?

  Published: July 2, 2009 11:56 AM

• Franklin

  Fine for Madoff to go "free"..... Just ensure equal treatment under the law. Open up the country club prisons and let the likes of him and the Milkens of the world get back in their limos and go home. All of them. And I mean all.

  When Clinton was impeached, and then excused, I wondered how long it would be before all other imprisoned perjerurers would be told, "Sorry, you can go now."

  When Gore and Bush admitted their drug use (and Obama practically dealing the stuff), I was sure that drug reform would be at the top of the list. They would shout from the bully pulpit that all the young kids caught with joint should be excused. No felony. No misdemeanor. Nothing.
  Somehow it hasn't seemed to take effect.

  When Nixon was impeached (err, sorry, about to be), then resigned, certainly guilty of high crimes and misdemeanors, he got a nice pardon. Back then, a college chum was explaining to me how the disgraced Pres had suffered enough by the embarrasment of being run out of town. I wonder if I can use that in court on my traffic ticket. Maine cop hit me with a $140 fine for going 51 in a 40 zone. Perhaps I can just explain to the judge that the embarrasment of the violation should be enough torment for me. My buddy said, "That's different."

  Of course. When some are more equal than others, it really is different.

  The Madoff case prompts a variety of opinions. Diverse, and good. But no matter which side, every libertarian should call for equal treatment. Without fail.
  And if Madoff should be freed, follow the argument to its logical conclusion.

  Published: July 2, 2009 12:04 PM

• Mike R

  I think Bernie was a convenient way to get the news away from the real thieves and criminals who are ramming cap and trade down our throats. It seems a little too convenient that Bernie’s crime came out just when the masters were robbing the treasury and calling it a bailout. Now cap and trade is in the news and bingo Bernie gets 150 years. It looks like a convenient smoke screen to me (and not the only one).

  Published: July 2, 2009 12:31 PM

• Greg Ransom

  Let's let his victims beat the hell out of him in an arena -- and charge admission to help make his victims whole.

  It's a win-win.

  Justice required retribution.

  Published: July 2, 2009 12:32 PM

• Greg Ransom

  Wouldn't every one of us like to put the politicians in jail who've given us the current theft system?

  This parallel is an argument in favor of multi-century jail terms, not against:

  "So let us ask the unaskable: Just how unusually evil were Madoff's actions? Not that unusual. In fact, the whole notion of paying off past investors with the funds of present investors is at the very core of the Social Security system."

  Published: July 2, 2009 12:35 PM

• Gene Wiggins

  Mr. Tucker:
  I cannot agree with you on the matter of freeing Bernie Madoff. I agree with you there will be no rehabilitation for him in prison, but then he is not there to change him he is there to punish him for his violation of laws. He violated the rules of society and he hurt many people for his own personal gain. Yes, he may be remorseful now but I feel that is only because "he got caught".

  Your liberal viewpoint of crime and punishment could only lead to a more decadent society.

  Published: July 2, 2009 12:43 PM

• Anonymous

  Jeffrey, I find the piece unpersuasive. Are you arguing that (a) the S.S.A. bureaucrats shouldn't be punished? Or (b) that Bernie and the S.S.A. bureaucrats should be punished, but that imprisonment is not due justice?

  I often like reading your articles here and you have written much better pieces (like this). That said, there is one thing I do like about this article and that is its contribution to the free exchange of ideas and critical thinking that exists at the Mises Institute. S

  Published: July 2, 2009 1:06 PM

• Anthony Gregory

  Heroic article.

  Published: July 2, 2009 1:07 PM

• Anonymous

  Edit: this!

  Published: July 2, 2009 1:10 PM

• Walt D.

  Since there is no parole in the federal system, he will not get off lightly and be eligible for parole in 50 years. 150 years does seem to be excessive. He'll serve more time than murders who are ultimately released.
  
  His big crime was that he made the SEC look like assholes. (As if anyone needed to do that anyway).
  
  Seriously, if we are going to send him to jail, 5 years is probably sufficient.
  
  On a lighter note, if we follow the same guidelines, Hank Paulsen and Ben Bernake deserve 2100 years in prison and Barney Frank deserves 300 years. Paul Krugman deserves to be euthanized.

  Published: July 2, 2009 1:15 PM

• I Hate Psychiatry

  You should see how society treats Psychiatric "patients". At least prisonners still have some human rights and can make a phone call are are granted due process before deprived of liberty.

  On the other hand, if a few relatives hate you, they can call the police to have you committed in a psychiatric ward even though you did nothing wrong.

  Psychiatry is slavery and it is worse than jails. The fact that the police officers are "working" hand-to-hand with pyschiatry by forcing people into psychiatric hospitals against their will is forever tainting the job of officers.

  Now, I have absolutely no respect for police officers anymore.

  The cops are not your friends, therefore they are your enemies.

  Published: July 2, 2009 1:21 PM

• I Hate Psychiatry

  "Perhaps we should allow it for the most violent members of society, pending some other solution."

  Society was more civilized in the times of duels.

  Violent offenders should face their victims or the relatives of their victims in mortal combat.

  Violent offenders should be faced with brutal and rapid violence, even that would be billions of times less cruel than a lifetime in prison.

  And psychiatry should be abolished. The psychiatric system is worse than the jail system.

  If inmates are treated like objects, psychiatric "patients" or people who are accused of having a mental illness even though they are not ill are treated like feces.

  Published: July 2, 2009 1:26 PM

• Magnus

  He made a fool of the government; of course he's getting every book on the shelf thrown at him.

  So true.

  Take a look at the list of people they put in the worst prisons. Right now, the worst prison in America is ADX Florence, aka "the Alcatraz of the Rockies."

  That's where they put Charles Harrelson (father of Woody Harrelson), who killed exactly one person. (That's the same number of people who have been killed in Ted Kennedy's car.) But Harrelson got sent to a supermax prison since the decedent was a federal judge.

  Similarly, that's where they sent first-time offender Matthew Hale, who was convicted of attempting to solicit the murder of one person, but was assigned to America's top supermax facility, not because he's a problem as a prisoner, but because his intended victim was also a federal judge. Also, he's a racist, which apparently gets you extra punishment.

  Or Ted Kaczynski, who killed three people. He was sent to this prison, which has poured concrete for furniture and where they spend 23 hours per day in solitary confinement, not because he's a threat to anyone were he held in a regular prison, but because he embarrassed the FBI.

  Published: July 2, 2009 1:52 PM

• Lloyd Danforth

  I kept looking for the punchline.

  Published: July 2, 2009 1:53 PM

• I Hate Psychiatrists

  How about social security.

  Isn't that the biggest ponzi scheme of all times ?

  Who's going to go to jail for that one ?

  Published: July 2, 2009 1:54 PM

• Chris Donabedian

  I do not how to say this and have it remain "civil" as the blog requires, but this article is absurd and myopic. Are you actually suggesting that a criminal, a man who stole large sums of wealth and destroyed it, should be left free? It is precisely this type of article that will prevent the Mises Institute from ever having any real impact on this country, because it destroys credibility. The idea of freeing thieves so we can read their book is not going to sit well with many.

  I suspect the victims of his looting can explain to you why he should indeed be imprisoned.

  Published: July 2, 2009 2:05 PM

• Mark

  Interesting take. While I agree that Madoff is no threat anymore, any work he did would be monitored to the tiniest detail, I disagree that his life is over. I have no doubt that some firm somewhere would still find value by hiring Madoff and hiring somebody else to shadow his every movement.

  I think a better punishment would be just to take all his income for the rest of his life over a subsistence level for restitution. That way he could be a benefit to society instead of a burden as Tucker suggests.

  Published: July 2, 2009 2:12 PM

• Barry Linetsky

  This is the most bizarre article I've ever read at Mises.org!

  It's a shame that it is so anti-Misean is spirit.

  The purpose of the law is to defend individual rights and punish those who infringe upon them. Of course there are costs to running a justice system, of which prisons are one aspect. Madoff destroyed lives, willingly and consciously, and benefited himself as a parasite. To assert that he may have done so with good intentions is wacky. To advocate that imprisonment is an act of injustice when committed against the most extreme con men leaves one to conclude that Tucker would likely advocate the decriminalization of fraud for lesser offenses.

  But if Tucker is an anarchist, then I give him credit for being consistent. Logic would hold that an anarchist must be opposed to any state enforcement of criminal activity, hence the bizarre moral admonition to "free Bernie Madoff" and all prisoners because to punish through imprisonment, according to Tucker, "is contrary to all principles of civilization." How the principles of justice are contrary to "all principles of civilization" calls for further elucidation from Mr. Tucker. We are in a sorry state is his is a majority opinion amongst admirers of Mises.

  Tu Ne Cede Malis.

  Published: July 2, 2009 2:13 PM

• Kick-A-Crook

  If Madoff does not have enough money to pay back his victims, we could start a new reality show, the show would be called Kick-A-Crook.

  Bernie would then have to do the "Mississipi" and all his victims would be aligned.

  It would be a paying event where people would pay to get a chance to kick Bernie's ass. The proceeds could go on to pay the victims.

  It would be like "the running man" except crooks would not die at the end, it would continue over and over again and would raise money to pay back the victims etc.

  Published: July 2, 2009 2:19 PM

• Walt D.

  Trivia point. Charles Ponzi only received 4 years in jail for fraud.

  Published: July 2, 2009 2:23 PM

• matskralc

  I suspect the victims of his looting can explain to you why he should indeed be imprisoned.

  What, so his victims get to reach into my wallet and steal from me in order to make themselves feel better?

  Published: July 2, 2009 2:49 PM

• JonBostwick

  These comments seem of a rather low caliber. Not one mention of proportionality?

  If some victim demanded drawing and quartering Madoff, would anyone objecting to that be accused of wanting to legalize fraud, too?

  Anyone who thinks the State offers a valid solution to those problems arising solely from the State is a buffoon.
  

  Published: July 2, 2009 3:41 PM

• Pete

  As far as I am concerned, he ought be owned proportionately by those who lost money investing with him. Let them vote on what to do with him. At a certain point, theft is so great that one forfeits their self ownership.

  Published: July 2, 2009 3:47 PM

• Chip Krakoff

  Surely, Mr. Tucker, you jest.

  Bernie Madoff is not like some other executives jailed for what might, arguably, be considered at most technical violations of the law. Mike Milken comes to mind, as do some of the Enron people, who entered into some spectacularly complicated transactions but not necessarily with intent to commit fraud.

  Madoff, by contrast, deliberately and systematically stole huge sums of money from investors over more than 20 years. This is a real crime, much more serious than the low-level drug raps that account for two-thirds of of all Federal prison sentences.

  Incarceration serves several purposes. The first is to get dangerous people off the streets. We can agree that Mr. Madoff, if freed, probably would not turn to armed robbery or kidnapping. The second is as a deterrent. A 150-year sentence does grab people's attention. For the next banker tempted to "borrow" money from his clients to cover up previous trades gone bad, the possibility of spending the rest of his life in prison might make him think twice before hitting the "enter" key. Finally, putting someone in prison is a means of retribution. In all likelihood we will never recover more than a small fraction of the money Bernie stole. Madoff himself has stonewalled all questions about his accomplices and where the money is stashed, so deserves no break for being cooperative. All we can do is throw the book at him, and that is what the judge did.

  Mr. Tucker argues that Bernie Madoff's life is already ruined, his friends have abandoned him, and that his 20+ years as a high roller must have been miserable due to the constant stress of trying to prevent the whole edifice from collapsing, so how could imprisonment make his life any worse? I submit that living in a 20-room apartment on Park Avenue is bound to be somewhat less unpleasant than living in a Federal maximum security prison, for which Madoff's long sentence makes him eligible. By Mr. Tucker's logic, most gang-bangers should be returned to the streets, since life in a drug-infested ghetto is no picnic.

  In truth, here's no evidence Madoff has suffered at all. Many criminals sleep very well at night, untroubled by their misdeeds, and Bernie may have been one of them. Madoff acted with nothing but contempt for his friends, and disdain for the institutions that showered him with honors, so how badly can it hurt to lose them now? Mansions and yachts in the South of France, too, can do wonders to take the edge off any troubling pangs of conscience that may surface from time to time.

  Bernie Madoff is not being punished because he is a capitalist, he is being punished because he is a crook. What's more, he has expressed no remorse. He has admitted to what he calls a tragic flaw: his ego's refusal to admit that he had failed, which in turn caused him to dig himself deeper into the hole he had created. Put that way, it sounds almost noble. He has expressed sorrow for for the people whose lives he ruined, but without ever taking responsibility. I'm sure he is sorry too for the people who died in last year's cyclone in Myanmar.

  Bernie Madoff is every bit as deserving of his sentence as John Gotti of his. They may even get to meet one of these days.

  Published: July 2, 2009 3:57 PM

• matskralc

  Finally, putting someone in prison is a means of retribution.

  So maybe you can answer my earlier question, then?

  Published: July 2, 2009 4:12 PM

• Chip Krakoff

  Dear Matsk Ralc (is that an anagram? a character in an Ayn Rand novel?),

  It's pretty simple. If you want the protection of the law you have to pay for it, and that means paying to maintain the whole system, not just to punish criminals who have vitimized you personally. If you don't care for any protection, go live in Somalia, that libertarian paradise that has no government at all.

  Published: July 2, 2009 4:31 PM

• Chip Krakoff

  Dear Matsk Ralc (is that an anagram? a character in an Ayn Rand novel?),

  It's pretty simple. If you want the protection of the law you have to pay for it, and that means paying to maintain the whole system, not just to arrest, try, and punish criminals who have harmed you personally. If you don't care for anysuch protection, go live in Somalia, that libertarian paradise that has no government at all.

  Published: July 2, 2009 4:33 PM

• Chip Krakoff

  Dear Matsk Ralc (is that an anagram? a character in an Ayn Rand novel?),

  It's pretty simple. If you want the protection of the law you have to pay for it, and that means paying to maintain the whole system, not just to arrest, try, and punish criminals who have harmed you personally. If you don't care for any such protection, go live in Somalia, that libertarian paradise that has no government at all.

  Published: July 2, 2009 4:33 PM

• JAlanKatz

  It seems to me that the real objection is to his being jailed by the government. After all, how can the same officials who approve such imprisonment also appear on television daily telling us that Madoff-like actions are what will save our economy?

  Published: July 2, 2009 4:36 PM

• SEan

  Mr. Madoff employed no coercion in the commencement of his crimes of fraud and theft. He is a non-violent offender. His reputation is ruined. Imagine the hardship he would face on the outside. There is effectively no need to jail him.

  What's more, were his victims not so confident in the various regulatory agencies governing Mr. Madoff's former phony business operations, Mr. Madoff would have had a MUCH harder time pulling it off.

  The government needs to get out of BOTH sides of this equation.

  Published: July 2, 2009 5:34 PM

• Eric

  Too bad the same government ponzie scheme perps aren't doing time.

  No, in fact, the DC messiah is giving them awards.

  The only message here is that if you want to break the law, become a government employee first.
  

  Published: July 2, 2009 7:16 PM

• Walt D.

  http://online.wsj.com/article/SB124650399438184235.html
  
  When this happened in England there was a huge scandal - cabinet ministers resigned and there has even been talk of criminal prosecution for some of the more egregious offenders.
  
  Here, this will be swept under the rug.
  

  Published: July 2, 2009 7:55 PM

• Bill

  WTF...I want what your smoking. There may be good arguments for not jailing Madoff, but this isn't one of them.

  Published: July 2, 2009 8:13 PM

• Charles Hanes

  I suggest that everyone remember that the customers defrauded by Madoff should have known better.

  They believed that somehow, they deserved to get a deal that was better than anything else available, just because they "knew someone". They believed that they had a right to 15% returns year after year, while others suffered the ups and downs of the markets. They believed that government regulation would protect them from losses. All in all, they believed too much.

  Madoff exploited his standing and reputation to get away with a massive swindle. But, it is far from clear that jailing him for the rest of his life in a maximum security prison is the best answer to his crime. There is no way anyone would trust him with their money again. He could yet contribute to society, and pay his own way to boot, plus something for restitution. Why shouldn't we wish for that?

  Published: July 2, 2009 8:52 PM

• matskralc

  Dear Matsk Ralc (is that an anagram? a character in an Ayn Rand novel?),

  No and no.

  Published: July 2, 2009 9:00 PM

• Al Sledge

  Jeff wrote an interesting article concept if one looks at it in depth, rather than the more shallow view. I too had a lot riding on Bernie's sentence. I bet a coworker lunch that he would not spend a day in jail for his conviction. Pre-sentence jail time of course would not qualify. I obviously lost! So did Bernie, however his losses were somewhat greater than mine. However a few things did strike me as strange.

  One hundred fifty years? Would anyone be upset if they reduced it in half to seventy five years? At his age of seventy one years, a thirty year sentence would end in death while incarcerated. The length of his sentence given his age and time periods makes the judge look like the kind of fool that Bernie likely had for his "clients". If after his sentencing had he raised hell with the judge, would he received an additional thirty days for contempt?

  The day of his sentencing, Yahoo News stated; "He stole from the wealthy, he stole from the poor, and he stole from those in between". Yet another article stated he had "high net worth clients" that were "receiving double digit returns", and the "minimum account allowed was half a million dollars". I would think "double digit returns" would mean something above 9.99%. Here in "fly over" country I don't recall many of our poor, or even middle class who can spot an account balance of that size. Things must be different in Manhattan!

  But not all people involved were "victims". Some actually received some of this stolen property and had so for years. According to Wikipedia both the Democrats and the Republicans cashed in, but magnanimously returned A PORTION of the loot, I mean contributions. Why didn't they return all of it? The exact records of the dollar amounts still exist. Then there is the "return on investment" paid out to the wealthy (and poor) investors over the years. Should not the government reclaim that money from those folks? As they did not know the source of the dividends/interest they cannot be arrested, but people are not allowed to keep stolen property just because they are unaware of the source. I am not seriously recommending the government do so as everyone is aware that the cost to unsnarl this mess would far exceed the $65 billion after paying accounts and lawyers their wages and bribing the right politicians etc, the victims would end up splitting roughly $12.36 between them out of the original billions.

  In summary of my lunatic diatribe, putting people in jail is primarily to safeguard the rights and lives of humans in society. People that kill other humans need to be in protective cages and away from others. People that commit crimes against others property, including rape, robbery, theft, fraud, and the like should also be isolated from society. I do not see jail as punishment, but I also understand why others will disagree with me. However the magnitude of the crime is also important. A first offense of passing a bad check cannot be equated to a first offense of rape! If rapists or child molesters are rehabilitated that is wonderful, but they still need to be kept locked up for life! And yes, the burden of proof issue opens another can of worms too, that is too involved for this topic.

  Bernie was in essence convicted of the equivalent of passing a bad check. A really, really, really Big Check, but a bad one nonetheless! Due to inflation, the biggest in US history. But, after all, it was his First Offense. I feel pity toward him and sorrow for his entire family. My heart goes out to them as they lost far more than just money. Money only fixes money problems, it does not fix life problems. Money as a solution to all problems is an American myth. Little wonder they print so much of it!

  Published: July 2, 2009 9:19 PM

• Jim Fedako

  Keep in mind that Madoff owes society nothing. He owes specific individual (directly and indirectly) billions.

  Government prisons are based on the collective view of offenses against society - a false view, indeed.

  Having Madoff waste away in a government prison provides nothing to the victims, save retribution. But can anyone claim the right to retribution?

  Published: July 2, 2009 10:04 PM

• kev

  As a critical criminologist I loved this article. It makes every bit of sense - the four justifications of punishment don't really apply here, except, perhaps, for 'generic deterrence'... but we all know the limitations of this justification. Unfortunately, the justification most people understand is that of retribution. Vengance seems to satisfy the majority. But vengance has absolutely no utilitarian value - even the utilitarian Jeremy Bentham would agree here. Indeed, free Madoff - there are better men at the Fed to jail, anyway.

  Published: July 2, 2009 11:47 PM

• Gil

  What Tom Henderon wrote!

  So J. Tucker feels his victims will get a 'double-whammy'? So? In Libertopia, a victim's insurance payments are going to up after they make claim? Or, if Libertopia has no insurance companies and victims have to do a DIY form of retribution then they still have to take time out from their regular lives to do that too.

  Then again are the 'victims' really victims? As Charles Hanes pointed out, they didn't take time out to check if the scheme was crooked when the money was rolling in, they only looked when it wasn't. A lot of people are saying "it was obvious in retrospect that something was amiss" but once again no one looked when it was lucrative.

  Published: July 3, 2009 12:03 AM

• DixieFlatline

  Another heroic and insightful argument from Jeffrey Tucker!

  Published: July 3, 2009 1:59 AM

• DixieFlatline

  Tom Henderson,

  What is the primary function of government in a free society?

  There is none. You can't have a free society where people are constrained by government.

  Published: July 3, 2009 2:01 AM

• Tom Papworth

  Whenever people tell me that (classical) liberalism is just an excuse to serve the interests of business and the rich, I try to point out the error of their ways.

  Whenever people opine that libertarian think-tanks are in the pockets of big businessmen I assure them that this is not so.

  And then Jeffrey Tucker argues that Bernie Madoff should be released from prison just days after being sentenced.

  NOT the most sensible post ever!

  Published: July 3, 2009 7:44 AM

• Paul Marks

  The trouble with being ironic is that people (and not just a few people) may not see that one is being ironic.

  For example, they might just think (and spread) "the Ludwig Von Mises Institute people say free Berni Madoff - they support massive fraud". Which, of course, is quite false.

  The life long leftist (directly relevant as it goes to the heart of the idea that one can make money regardless of the level of statism undermining civil society) contributer Bernard Madoff should not be freed, he should be punished for his crimes by going to prison for a very long time.

  It is just that (as the author really thinks) a lot of goverment people should be joining him in prison.

  Published: July 3, 2009 8:09 AM

• SweetLiberty

  Articles and opinions like Mr. Tucker’s are the reason why Libertarians are considered to be on the “lunatic fringe”. Thank goodness many on this blog realize the need to punish fraud and I can only hope those are the voices that prevail if the libertarian movement is to have any chance of growing in the future. Otherwise, we will always be hailed as a group of crazy Anarchists who believe in an anything goes mentality. Political organizations are often defined by their most extreme members. The public needs to see a clear distinction between limited government Libertarians and no-holds barred Anarchists. I make the assertion that Austrian Economics per Rothbard, Hayek, Mises, et al, is based on LIMITED government interference, and therefore further assert that Mr. Tucker’s article belongs on a different blog which advocates NO government interference.

  Published: July 3, 2009 8:36 AM

• Patrick

  Great article. Statist jails (and the State itself) are incompatible with a free-society.
  Most of the whining on here are probably statists (albeit of the "limited" variety).

  Published: July 3, 2009 10:19 AM

• Tom Henderson

  SweetLiberty makes a valid observation. Sadly, it appears the Libertarian Party image is seen not in the promotion of free markets, but rather embracing anarchy. The illusion and fantasy that free markets can exist without protection from fraud and plunder is just as much an illusion as the socialists' fantasy that government can solve all economic and social problems.

  One of the major obstacles I have in promoting free markets is to dispel the myths that Republicans are free market advocates, and that free markets and anarchy are equivilent. Libertarians promoting anarchy only adds to this obstacle.

  Just as too much government eventually leads to the destruction of property rights, so, too, does anarchy lead to the destruction of property rights. It makes no difference if a government claims ownership of your property, or as in the case of Somalia, which has no laws, gangs claim owership of your property. Are the results not the same?

  When I asked the question "What is the function of government in a free society", one comment was "There is none. You can't have a free society where people are constrained by government."

  Like Tucker's article, this author misses the point. The function of government in a free society is to protect individuals from fraud and plunder. The protection of the individual and his/her constrains plunder, not liberty. There is a difference.

  There is no utopia, whether it be the illusion that government can provide a perfect society, or that no government can produce a perfect society. This is part of the essence of Bastiat's "The Law". Only when the pain of plunder is more dangerous than the pain of labor, will plunder be stopped. Batiat points out the proper use of law in a free society. To protect those who labor from those who plunder.

  Tucker's article, along with the anarchist view distracts from those of us who believe in free markets. Like SweetLiberty, I wish there were a separtation of free markets concepts from anarchists' views.

  SweetLiberty
  Articles and opinions like Mr. Tucker’s are the reason why Libertarians are considered to be on the “lunatic fringe”. Thank goodness many on this blog realize the need to punish fraud and I can only hope those are the voices that prevail if the libertarian movement is to have any chance of growing in the future. Otherwise, we will always be hailed as a group of crazy Anarchists who believe in an anything goes mentality. Political organizations are often defined by their most extreme members. The public needs to see a clear distinction between limited government Libertarians and no-holds barred Anarchists. I make the assertion that Austrian Economics per Rothbard, Hayek, Mises, et al, is based on LIMITED government interference, and therefore further assert that Mr. Tucker’s article belongs on a different blog which advocates NO government interference.

  Published: July 3, 2009 10:59 AM

• robert in dc

  Great article,

  So many miss your point.Everybody is parroting media "outrage".

  Madoff sold to poeple who were greedy and wanted more. To be conned you have to want to be conned. As for the alleged libertarians posting here--how about "caveat emptor"?

  If Madoff goes to jail for selling securities--risky investments, that had no real value to multimillionaires--the mega rich were his "victims" Then by the same logic the realestate agents and brokers an lenders who have Joe Sixpak in a mortgage of 300k for a house worth no 60k should all go to Jail? Well?

  No need for non-violent prisoners to go to jail. I am also dperessed by the tendency of many posters to want to humilate and degrade people--talk about monstrous creatures of the state.....Yeesh.,

  No hope--even in libertarian websites....

  Published: July 3, 2009 11:01 AM

• Alexander S. Peak

  Mr. Tucker writes, "I, for one, would like to read that book."

  Viva la bibliophilia! :)

  Published: July 3, 2009 12:28 PM

• Paul Aubert

  Jeffrey,

  Awesome. I could not agree more. As Nielsio said above, "Amen!"

  Published: July 3, 2009 12:33 PM

• MHnTX

  Tom Henderon writes: “The answer to why Madoff should be sent to prison can best be found in the writings of Bastiat's "The Law", where he states: When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labor. It is evident, then, that the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work. All the measures of the law should protect property and punish plunder."

  The function of a civil government is creating laws that protect the rights of all individuals and the punishment of those breaking these laws should always strive to fit the crime committed. However, this does not automatically equate to a prison cell -- at the taxpayer’s expense -- as seems to be the easy answer to almost everything these days.

  As a non-violent offender, there are many forms of punishment that could have been imposed on Madoff that would have been just as harsh, would have served the same purpose, and would have cost the taxpayer’s far less. The courts have the power to strip him of any wealth, impose travel limits, wage limits, and even technology and career access limits if they so chose, and throwing him in a prison cell is simply another wasted resource by an already bloated, lethargic and bureaucratic federal legal system.

  Madoff is a marked man and a washed up pauper and if left semi-free under severe restrictions would have trouble convincing an 8 yo to invest their lemonade stand profits with him. Leaving him semi-free to mop floors or flip burgers and perhaps even a life sentence to part time forced servitude to the community would have been far more appropriate punishment IMO.

  Sticking him in a prison cell is simply government’s politically expedient way of pacifying the lynch mob mentality of the masses and has nothing to do with sane justice. And when and if the masses ever catch up with the real frauds in government running the same scheme -- on a much vaster scale -- then one might almost hope that they receive the same exact lack of due consideration and thought that they themselves are showing.
  

  Published: July 3, 2009 12:55 PM

• DixieFlatline

  Tom,

  Tucker's article, along with the anarchist view distracts from those of us who believe in free markets. Like SweetLiberty, I wish there were a separtation of free markets concepts from anarchists' views.

  Why would there be a separation? Anarchists are for free markets. In fact, moreso than minarchists who believe that some monopoly power, and some aggression is necessary to maintain order which are clearly not free market stances on law or justice.

  Minarchism is the compromise of liberty. As a libertarian or classic liberal, it is also rationally incoherent.

  Published: July 3, 2009 2:57 PM

• trembo slice

  Tucker, too bad nobody would recognize Madoff. he could easily enjoy life in a small town - just being free. he committed fraud - he deserves to go to jail.

  although, i agree if he wrote a book on the failures of government regulation it would be quite interesting - in an effort to clear his name.

  Published: July 3, 2009 3:03 PM

• Kick-A-Crook

  Tom Henderson,

  The problem is that the law, in orde to protect those who labors, needs to plunder those who labor in order to fund the cost of the said "protection".

  And the laborers cannot refuse this forced protection service and cannot chose to protect themselves.

  In this sense, the law is really nothing more than a protection racket.

  As a libertarian, I think that those who labor are best fit to protect themselves against plunder.

  We don't need the law to protect, we only need the law to get out of the way and stop punishing those who protect themselves.

  Right now, if you resist paying your taxes, you will go to federal jail or be shot dead.

  Right now, if you resist armed robbery using any weapon, especially a firearm, you are subjected to murder prosecution by the law.

  The law is a protection racket and a monopoly of force and therefore it cannot tolerate competition. The law claims the sole legitimacy of "protection" and the law will assault those who decide to protect themselves.

  Individual laborers with guns can easily protect themselves against plunderers, even if the plunderers are armed, they cannot face an entire armed population ready to defend themselves against plunder.

  What prevents laborers to defend themselves against plunder is the law which punishes self-defense in so many ways.

  We are brainwashed into thinking the only way to protect ourselves is through dialing 911.

  Yet there isn't enough police force to protect anyone and the police is not mandated to provide security. The police exist to protect the politicians not the people.

  And if there were enough police officers to protect the laborers, then this would be very scary because then nothing could protect the laborers from the police.

  No, right now, the law protects the plunderers from the laborers by outlawing armed self-defense.

  What the law must do is to stop protecting the plunderers and let them know that laborers have full self-defense rights. This should scare the hell out of the plunderers into making them laborers.

  Published: July 3, 2009 3:22 PM

• Mr Fnortner

  Judge Roy Bean may have been the one to say, "We don’t hang horse thieves for stealing horses. We hang horse thieves so others won’t steal horses."

  Justice, in this case prison, must be coldly meted out so that the next likely Ponzi scheme artist will see his fate, not as financial ruin and time off for suffering, but as a lifetime in a jail cell married to a guy named Walt. This is not vengeance, nor some sort of signal; neither is it rehabilitation. It it pragmatism, pure and simple. Mrs. M, by the way, who probably will die within a year on just $2.5 million, should just slink away and be "regular folks." Who couldn't live on $2.5 million, for chrisake?

  Published: July 3, 2009 5:22 PM

• maru

  Mr. Tucker's "irony", if any, seems awkward enough. Regrettably, I, too, see his article as clearly non-Austrian. His claim to free Bernie looks disproportionate within the Austrian system of views, especially so when put into the actual state of affairs. Besides, you cannot draw a dividing line between fraud and (physical) violence as strong as he does. Or does the simple old truth, that lies and fraud lead to theft to robbery to murder, not hold any more in modern times?

  Published: July 3, 2009 7:51 PM

• Gil

  What Tom Hender2on wrote x 2! X)

  Kick-A-Crook - puhhhh-leassssse! You might as well be arguing about a serial killer complaining "it's not fair, I know others have killed more so why should I go to jail?" Madoff committed the crime so he does the crime. He shouldn't be as thick-as-two-bricks to do what he did so he knew what he was doing was a crime so he can't complain when he got caught. C'mon.

  Published: July 3, 2009 10:05 PM

• Jim Fedako

  I keep wondering if retribution would have been better served had Madoff been sentenced to 500 years. Or a million years. Or a trillion.

  As far as his sentence being a deterrent: Does anyone believe that Madoff did not know he would end up in prison once exposed?

  I have no sympathy for the man. None whatsoever. However, the Austrian issue here is property. Madoff defrauded folks -- those folks are currently out of luck. Instead of having him repay whatever amount he is able to repay -- including the use of forced labor if necessary, Madoff is sentenced to a tax-funded prison that is supported by ... get this ... theft. Hmmm.

  So where is the justice here?

  Published: July 3, 2009 11:17 PM

• Gil

  It could be argued the victim would have to pay for the criminal's punishment in Libertopia anyway, J. Fedako.

  Published: July 4, 2009 1:14 AM

• Mark D Hughes

  I must say Jeff, you do know how to hit a nerve.

  It is terribly unfortunate that so many of your readers have so terribly missed your point.

  I agree with your analysis completely. And, contrary to some of these shrill posts I don't interpret you to have any sympathy for Madoff whatsoever. Nor do I.

  Indeed, as far as jail as a form of retribution or deterrent goes... 5 years or 150 years who gives a crap.

  My point (and I think Jeff's) is simple: what possible good does jail do? Not one of Madoff's victims is helped. In fact, as tax payers, salt is mixed into their wounds. Now, they must help keep this criminal in free board and room for the rest of his life.

  A much better solution for Madoff (and other non-violent criminals) is to force them to live a life of servitude... as if they were under house arrest (electronic ankle bracelets, etc). In Madoff's case in a very modest one bedroom apartment, from which he would have to work (writing a book, teaching, stock analysis, investment counseling, etc) under close scrutiny by way of audits and reviews. Any income he generates would first have to pay for his upkeep (including audits and reviews) and the rest would goes to help compensate his most deserving victims. The courts would have to decide who. (indeed, some of his so-called victims--most of the big European investors-- knew full well that Madoff was "up-to-something" but were enjoying the miraculous returns too much to care).

  In fact, someone like Madoff would be highly sought after as a public speaker and could generate substantial revenue from that alone. And, many, many wall street firms would pay dearly to tap into Madoff's knowledge base.

  This would be a win all around. Better for Madoff and better for "society."

  Why, you ask, would Madoff agree to work as a kind of slave? Well, consider the alternative. Life in prison or death by mob.

  As far as "society" not being ready for this "anarchist" solution... Not so. Already so called "black hat" computer hackers out on parole are earning nice livings working for, of all organizations, government and private security outfits. The only difference is that they get to keep all the money they make. Madoff would be a great asset to any stock market's fraud investigation section.

  Mark Hughes

  Published: July 4, 2009 1:15 AM

• Jim Fedako

  Gil,

  Do you mean "would, under certain conditions, pay" instead of "would have to pay?" (my emphasis)

  Published: July 4, 2009 10:35 AM

• MHnTX

  It has always puzzled me how anyone dealing with reality can espouse Anarchy in any form. As a person who is opposed to collectivist ideology I still find it incomprehensible that anyone would think men rational enough angels capable of living in the real world without some form of enforceable rule of law contract.

  In a world full of productive and peaceful John Galt’s government – or very little -- would be necessary but to try and translate that vision practically into a world full of irrational barbarians would be suicide. Without reasonable rule of law, enforced thru the threat of lose of liberties by those who violate the natural individual rights of others, the civilized world would simply fall apart. How this does not make sense to anyone is a mystery to me.

  Ivory tower dreaming about what could be is great fun at times but to actually advocate for an impossible political system – in today’s terms -- seems no more rational than what many of the collectivist intellectuals have done.

  George Bush was a supposed friend to freedom and capitalism and yet his ideological faults led him to harm it more than help it, and in that sense, I feel the Anarchist wing of the libertarian movement does the same exact thing.

  Perhaps Mises.org should at least set up an Ivory Tower Fantasy section so that, at the very least, new people coming to the site won’t mistake us all as advocates of the impossible in the real world.

  Published: July 4, 2009 12:52 PM

• michael

  A word needs to be said about deterrence.

  When it comes to ignorant, impulsive and desperate crimes (the crimes of most ordinary inmates) deterrence famously does not work. As this class of people tends to have little control over their lives and actions to begin with, anything you can do to or with them is after the fact.

  But when it comes to financial fraudsters, these are people very much in charge of their activities. We sentence Bernie Madoff to deter the flood that would come after him, were he not severely punished.

  Once the floodgates had opened we'd never be able to trust anyone again. It would be open season on investors.. and no one would be able to arm himself against the ever more sophisticated scams targeted toward the careful and the methodical. Our financial markets would cease to function.

  Published: July 4, 2009 1:46 PM

• Walt D.

  michael said
  
  "A word needs to be said about deterrence."
  
  The key thing about deterrence is the certainty of punishment and not the severity.
  
  In England during Dickensian times, minor crimes were punished by the death penalty. They would hang people for pick-pocketing. To deter people, there were public hangings outside Newgate Prison. Large crowds used to gather. Thieves would take advantage of the hustle and bustle of the large crowds to pick peoples pockets!
  
  It was the fact that Madoff new that the SEC would do nothing that encouraged him to keep the scam going.

  Published: July 4, 2009 6:02 PM

• Gil

  Nope, J. Fedako, 'have to pay', unless they think it isn't worth it. As I wrote near the top - in Libertopia, a victim's insurance payments are going to up after they make claim or, if they don't have insurance companies and victims have to do a DIY form of retribution then they still have to take time out from their regular lives to do that too.

  Published: July 4, 2009 9:01 PM

• ethan

  Walt D.
  I love this anicdote about the pickpockets in Dickensian England. Do you have a reference?

  Published: July 4, 2009 9:33 PM

• Jim Fedako

  Gil,

  "As I wrote near the top - in Libertopia, a victim's insurance payments are going to up after they make claim"(my emphasis)

  Interesting proposition. Now prove it.

  Published: July 4, 2009 9:58 PM

• Gil

  Gee, what happens to those who prang their car and claim insurance?

  Published: July 4, 2009 11:45 PM

• Jim Fedako

  That's not a proof of your proposition.

  In that vein, I'll make a counter claim: I got a new roof due to storm damage and my rates remained the same at renewal.

  Instead of anecdotes, how about some proof.

  Published: July 5, 2009 7:57 AM

• Gil

  But if people are paying the same rate afterwards then other people are 'chipping in' to help cover the costs of crime.

  Published: July 5, 2009 9:54 AM

• Uri DeYoung

  There is no way that Madoff can pay restitution to his victims -- even if he were indentured for the rest of his life to a legitimate investment firm and 90% of the revenue that he earned went to repay his victims (the remaining 10% going to the firm for their trouble).

  There's nothing left to do with him. Off with his head!
  

  Published: July 6, 2009 5:41 AM

• Steff

  Why don't people get locked up for the biggest Ponzi scheme of all: fractional reserve banking?

  Published: July 6, 2009 7:00 AM

• ganpalou

  I was hoping for some creative or sarcastic comments in reading Tucker's article. Instead, I got a review of the early 1960's pap (before the "revolution" sold out for 50 cents-a-hit Osley Orange). The comments suggest we have forgotten, as a culture, that we have already gone down this road.
  I am concerned that the people who "get it" seem to be uptight about the role of government in general, and prisons in particular. I think we place government on too high a pedestal. The primary goal of government is to survive. To survive, a government must have a predictable flow of taxes. The people must engage in producing valued commodities and services in order to be taxable; we can't just make garbage and pollution. To produce valued services and commodities, the people need to be healthy and prosperous; therefore, protecting health and prosperity is a necessary burden to government. Further, government must set rules which encourage productive activity, and must limit its interference and plunder of the people. It seems to me that this is the core of the Mises teachings, and is the source of my anxieties over the actions of my government.
  As a people, we wish to constrain government to activities which enable it to survive. We wish to be healthy and prosperous. It is within these constraints that we devise the justice and prison systems. We make it difficult and expensive to deal with those who interfere with our health and prosperity, and who also interfere with the predictable flow of taxes.
  Of course Bernie should go to prison. He interfered with prosperity and the flow of taxes. And there are plenty others. Paulson and Bernanke do come to mind, but they are reacting to the banking and brokerage execs who wont do business with each other without a bribe, as they know their peers are crooks. If you feel avenged, or blood lust, or have dreams of humiliating others, that is your personal issue. Bernie going to prison is just business.
  As for the horrors of prison, I have not yet excluded Federal prison from "retirement plan 'F", if all else fails. Lompoc would be my choice. It is near Santa Barbara Ca., so the weather is nice, and a "good inmate" can get day-passes on weekends to go downtown or to the beach.

  Published: July 6, 2009 7:57 AM

• EnEm

  So suckers like Tucker are still around. He appears to be in a class by himself. I say we do as he says and release Madoff from prison and then send him after Tucker!

  Published: July 6, 2009 2:31 PM

• Franklin

  "I was hoping for some creative or sarcastic comments in reading Tucker's article," says ganpalo.
  "Instead [it was] 1960's pap before the 'revolution' sold out..."
  Ha! I think you provided the much-needed satire yourself. Very nicely said.
  "Retirement Plan 'F'" indeed.
  : )
  

  Published: July 6, 2009 6:46 PM

• Michael

  I agree, public embarrassment is the worst to the psyche of anybody. For instance public speaking is tough for MOST people from the fear of public embarrassment.
  One point to make is about the 150 years sentencing. He questions why such a high sentence, probably because the mass population cares about their money more.
  Great comparison to social security than next big recession of the United States.

  Published: July 7, 2009 4:01 PM

• BT

  To all crazies posting here:

  You miss several points:

  1) The punishment is to act as a deterrent to future would-be con artists.

  2) Madoff can still write his book while in prison. Then, any money made off his sold copies can go to repay his victims.

  3) Madoff would never be able to repay his "debts" thus jail time is appropriate.

  4) Madoff could never generate enough revenue over his remaining useful life to pay back 50 billion dollars!! The 50 billion would have to be profit! This would require something on the order of 500 billion to 1 trillion in revenue!!!

  5) Even if he could generate that kind of revenue, what would keep him from taking people for another ride in his new revenue-generating pursuit? NOTHING!!!

  6) If left to individuals instead of the state, I assure you Madoff would already be dead!! Which is worse to libertarian crazies? Death or imprisonment?

  7) Many of you crazies make some good and correct points; however, most of your posts eventually slip off into Utopialand and lose touch with reality, common sense, and a reasonable, logical argument!

  You crazy libertarians are so funny....none of you seem to be living what you preach!! If you like lawlessness, move to the continent of Africa!!! I assure you, you will find plenty of it there. Until then, shut up, quit smoking crack, and get out and find employment!!! Your arguments are so poorly contrived that a third grader has better ideas!! I think most of you posting here are lazy, elitist intellectuals (or losers)....translation - college students.

  Published: July 20, 2009 4:09 PM

• BT

  Hey Moron Mark Hughes:

  Question: Who do you think is going to pay for the audits and the security for Madoff? The taxpayer, the corporation that hires him? Give me a break, no one would hire him; it would cost the company too much lost revenue from the negative publicity!!!

  I am going to resort to an ad hominem attack (oops): YOU ARE A FREAKIN' IDIOT!!! I hope you (and others like you) remember your rants when your number comes up. In fact, how about I get a hacker buddy of mine to steal your identity? It would give you a chance to put your belief into practice!!!

  Published: July 20, 2009 4:18 PM

• Jim Fedako

  Gil,

  That's the essence of insurance.

  Published: July 21, 2009 9:54 PM

• Jim Fedako

  To clarify, the essence of insurance is shared risk. So payments do not rise bases on a singular event.

  Published: July 22, 2009 9:39 PM