Nixon dropped gold standard in 1971 and state power started expanding like crazy with printed money. Incarceration rate is just one of the effects of growing violent power.
1. State promised to provide gold in exchange for U.S. dollars before November 1971.
2. After November 1971 it basically defaulted on that promise. But due to different factors (including military domination in many countries) people overseas kept trading in dollars, so dollar did not collapse.
3. When money is created it gets in someone's hands who now have some purchasing power they didn't have before (I'm not debating if it's "good" or "bad", it's just the fact).
4. Mainly, money is created via bonds issued by the government. So it's mainly government who get new purchasing power (the whole point of those bonds is to make some cash for government spending).
5. Government is different from any corporation in a sense that it has monopoly on violence. Only government agencies can put people in jail, use guns on massive scale at home and in the world. Again, I'm not saying if it's evil or "good for society", it's just the way it is.
6. Extra purchasing power for government means more economic power to do things that only government can do. E.g. pay policemen to chase drug dealers, computer hackers, bitcoin traders etc.
7. No wonder that incarceration rate grows.
Where am I wrong?
Also, do you agree that no matter how evil your government is, without money (taxes and/or inflation) their evilness does not mean anything - they won't be able to execute on it.
Therefore, monetary policy accelerates whatever your government is up to. If it already had a lot of military power, expect that to grow with cheap money being added.
* The civil rights movement.
* Concentrated federal power since the first signing of the constutition to protect rich property interests (as the selfish goal, the other one was to be strong enough to resist European insurrection).
* Culture of fear, and a distrust of the "different".
* A corrections system that isn't correctional, but retributional.
So here are some reasons imprisonment rates are lower in other western nations:
* Monocultures and single race societies (for the most part) mean more cultural congruency and less conflict. Hemp was outlawed because of Mexicians, and Crack was outlawed because of Blacks, and it let them throw vast swathes of them in jail.
* The Finnish / Sweedish / etc corrections systems are correctional and rehabilitate inmates. US inmates get raped and get more access to drugs behind bars than outside them. They get into the prison culture and cycle.
* More foreign corrections systems do not engage with for profit private prisons that make money by having higher incarceration rates.
* Most foreign nations don't have a war on drugs (which is caused by the cultural animosity towards the "different").
* Other nations don't have as much blind nationalistic pride as many Americans do. I'm American - I constantly question and doubt my government. But many people in this country don't, especially those who were around to "win" the cold war.
You can extend that same moral sensibility to many other areas of public policy and perhaps it will have some impact on crime and incarceration rates. Blaming it on economics or racial homogeneity is a huge copout. It is foremost a moral decision.
Always following the money is good advice, and we're both doing that. I'm just doing a little more Occam's razor.
1. Force people to give up 40-50% of their income (directly and indirectly via sales taxes, import/export regulations, licensing, patents etc).
2. Give that money to some other people to do stuff that you want to do.
Other developed countries don't have the kind of crime rates the US does/did, so they don't put as many people in prison.
No doubt government spending is higher for the reasons you state, but if we had the crime rate of Sweden we'd find something else to spend it on. Most prisoners are incarcerated by state or local governments, anyway, which do not get to print their own money.
Also, how many laws there are for victimless crimes? That only increases tension between armed police and other folks? How many restrictions are put in economy that keeps poor people poor and desperate?
Most US kids have been educated in government schools before, during, and after the crime wave of the 60s-early 90s.
What restrictions keep people poor and desperate? Name a specific one, if one exists.
Where you are also wrong: it is also not true that this purchasing power is created "by creating money". That's an all too common fallacy from Economics 101. Sure, you have more money; but wages and prices increase too, so in the medium term, and disregarding major crises such as hyperinflation, et c., it all balances out. It's a common argument from proponents of the gold standard, and it's also false.
Where you are wrong again: most governments of the developed world also have many, many things in which to spend money constructively. Social Security. Education. If the public budget being spent on Wars on Whatever is an specific issue of the US, not of countries that abandoned the gold standard, then it's safe to say it has nothing to do with the gold standard.
Before you ask: most governments haven't had an explosion of the state budget; they've mostly spent that money in a responsible fashion. The current crisis is mostly because of private debt, not public debt (except in Greece), mainly in the housing industry.