"A clever teacher would figure out a way for students to police each other. I've seen it work to great effect. No one grades harder than a peer."

I could not agree with you more. This assignment, in which students get to teach "emerging technologies" to each other, and grade each other, is the highlight of my class. The whole point that I wanted to make with this post is that cheating is something that needs to be structurally avoided, not something to be detected and penalized.

Btw, touché on the libertarian point.