Mr. Crosby shares with John his opinion that dictatorships are good things.
So you don't get the wrong idea, John tells the reader that Crosby "wasn't a terrible person [or] a fool." He just "confront[s] the world with a certain barn-yard clownishness" (43.1) and believes that many of the people on Earth were put there to build him some bicycles.
Crosby asks John if he knows how they deal with crime in San Lorenzo. John says he doesn't, and you know what that means. Time for an explanation!
San Lorenzo has a thing called the hook, which is like a hook. But for people. Any and all crimes are punished by hook. It's that simple.
Crosby doesn't think it's good, but he doesn't think it's bad either. He does off-handedly wonder what such a punishment would do to clear up juvenile delinquency.
Hazel mentions they saw something similar to the hook at the waxworks museum in London. It was next to an exhibit of a wax man being roasted alive on an iron chair.
The man in the iron chair turned out to be innocent.