Having hundred or thousands of uniformed men (mostly men), ready to stamp out crime or unruly behavior, makes it easy not to know or remember that this is a relatively recent thing. London, under minister Robert Peele, invented the first professional metropolitan police force in the 1820s. These men became known as “Bobbies,” a reference to the first name of their creator. New York City followed suit in the 1840s and 1850s, but not without debate. Badged, uniformed men walking among the citizens were seen as a thread to its status as a citizen’s republic, and at least once the police force was created and then disbanded. During one incarnation the men wore only badges, not uniform. Read more in Chapter 15, Police and Prisons, in my book The Surprising Design of Market Economies.
Before that time, cities generally had only night watchmen, who might occasionally stroll but often just stood in one place and shouted out the hour. Having a permanent, quasi military force on the lookout for wrong doers was a big step, and one with a dark side. Civil unrest and public protests became much more difficult with an ever present police force, as New Yorkers learned during labor demonstrations in the 1870s, and more recently during the Republican National Convention here under Mayor Bloomberg.
Could you have a contemporary market economy without police protection? Maybe, but it would be much more difficult.
That we generally take for granted police protection leads me to discuss Adolph Wagner was wrong in what has come to be known as Wagner’s law. Wagner said that at societies get richer, they tend to spend for more public services for themselves. This leaves out that the relationship also works the other way around. Societies spend more on public services, which makes it possible for them to grow richer. Public investments in schooling, public water and sewer and a police force make possible a more complex economy. New York City found this out in 1841, when its first public water system opened up. A city where you have little risk of dying of cholera is a much better place to do business. You can read more about Wagner’s Law and why it’s mistaken in my book, just out in paperback, The Surprising Design of Market Economies.