Cecil Bohanon and John Horowitz: Solving social problems requires trade-offs

  • Comments
  • Print
Listen to this story

Subscriber Benefit

As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
This audio file is brought to you by
0:00
0:00
Loading audio file, please wait.
  • 0.25
  • 0.50
  • 0.75
  • 1.00
  • 1.25
  • 1.50
  • 1.75
  • 2.00

Economists are fond of saying there are no solutions to social problems, only trade-offs. Often, these trade-offs cannot be known precisely in advance and are inherently tragic.

Since March 2022, the government of El Salvador has incarcerated 68,000 citizens, or over 1% of the nation’s population. The news images show rows of young men sitting on hard floors, lined up like sardines, heads down and shaved, hands cuffed behind their backs, wearing only gym trunks. The human rights group Cristosal reports that the “practice of torture and cruel, inhuman and degrading treatment (is) widely inflicted on thousands of detainees under the regimen.”

Even the El Salvadoran government reports that over 130 detainees have died in jail since the mass arrests began. Nevertheless, over 90% of the El Salvadoran public approves of the government led by Nayib Bukele, who calls himself the “world’s coolest dictator.” What gives?

The background to the story is that, for decades, the ordinary people of El Salvador have been terrorized by members of rival gangs. The MS-13, 18th Street and other gangs have ruled and ruthlessly extorted from almost everyone in the country. The gangs forced small businesses and ordinary citizens to pay tribute or suffer violent consequences.

Unlike drug cartels that make their profits from sales outside their home country, the El Salvadoran gangs thrived by shaking down their fellow citizens. A 2016 study commissioned by the country’s central bank estimated that the economic cost was more than $4 billion a year, or roughly 16% of gross domestic product. And violence was endemic. The homicide rate in El Salvador peaked in 2015 at 106 per 100,000. In comparison, the U.S. homicide rate, considered high by international standards, stood at 7.8 per 100,000 in 2021.

However, since the mass arrests, “the gangs (have) largely disappeared,” as have the extortions and violence. El Salvador’s homicide rate fell 92%, to 7.8 per 100,000, in 2022. Commerce has revived; new businesses are opening. Pizza delivery has resumed in the cities.

Could the government have reduced gang violence to the same extent while better protecting civil liberties? Or would protecting civil liberties during the crackdown lead to continued or even increasing gang violence? We don’t know and won’t judge.

The El Salvadoran people seem to believe this tragic trade-off—giving up civil liberties, at least for the short term, to live safely—was worth it. We hope they can have both in the long run.•

__________

Bohanon and Horowitz are professors of economics at Ball State University. Send comments to ibjedit@ibj.com.

Please enable JavaScript to view this content.

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our comment policy that will govern how comments are moderated.

Get the best of Indiana business news. ONLY $1/week Subscribe Now

Get the best of Indiana business news. ONLY $1/week Subscribe Now

Get the best of Indiana business news. ONLY $1/week Subscribe Now

Get the best of Indiana business news. ONLY $1/week Subscribe Now

Get the best of Indiana business news.

Limited-time introductory offer for new subscribers

ONLY $1/week

Cancel anytime

Subscribe Now

Already a paid subscriber? Log In

Get the best of Indiana business news.

Limited-time introductory offer for new subscribers

ONLY $1/week

Cancel anytime

Subscribe Now

Already a paid subscriber? Log In

Get the best of Indiana business news.

Limited-time introductory offer for new subscribers

ONLY $1/week

Cancel anytime

Subscribe Now

Already a paid subscriber? Log In

Get the best of Indiana business news.

Limited-time introductory offer for new subscribers

ONLY $1/week

Cancel anytime

Subscribe Now

Already a paid subscriber? Log In