If so, is it fair to say that crime does indeed pay? I would even ask, is there a certain balance of crime that is required to maintain a healthy economy?
Yes and no. The steps that would be required to eradicate crime from society would harm the economy.
If we all, without coercion, decided to become more law abiding, I don’t think it would hurt the economy. It would take time for the economy to adjust to the new situation, but that’s a temporary blip, not a permanent problem.
Well you can consider that the criminals are typically the have-nots whereas the victims are the haves. Then we can assume that the haves will replace the stolen property (good for the economy) [either out of pocket or insurance] and the have-nots will either keep the property (no loss or gain since they typically couldn’t afford it to begin with) and or resell it (maybe for drugs, again good for the economy since the drug sellers buy cool toys).
I say, unless we consider prosecution expenses, that it’s a push towards ‘good for the economy’. Kinda like a war is supposedly good for the economy.
I would argue that some sectors of the economy, such as prostitution and the illegal drug trade, are refuges for those who can’t find decent jobs because employers now insist on good credit records and strong employment histories for full time hires. If they didn’t have these options, many people might be starving or engaging in more serious crimes, i.e., wholesale theft, kidnapping, etc., to get money.
If there was less crime, there would be less fear. If there was less fear, the masses would be more difficult to manipulate. So from a control standpoint, crime is an important leveraging tool.
The folly of this line of argument is shown by the Parable of the Broken Window (from Adam Smith? Maybe Al Capone, I confuse those two.)
A boy breaks a baker’s window. His father takes him to the shop to apologize for the damage he has caused. As he is about to be punished, the glazer comes in to fix the window. He explains the money the baker must pay him will go to feed his family, the grocer says the money the glazer pays him will go toward a nicer store. So on and so on. At last the mayor of the town give the boy a medal for helping the city’s economy.
The truth? Had the window not been broken the baker would have found better uses for the money. Repairing the window only returns the situation to normal, it drains money out of improvements.
Agree with Paul.
Another side to it. Countless people have become immobilized as a result of trauma reactions to crime. A friend’s girlfriend was brutally raped years ago. She had been running a small business. She was out for over a year. I have a friend now who’s a 9/11 casualty. Out of the economy for 5+ years.
Crime sucks.
What about criminal enterprises that supply prohibited good/services? like “THE GODFATHER” …Don Corleone acknowledges his business …" we supply these things, that most people regard as a harmless vice", but draws the line at peddling narcotics. There is a huge market for sexual activity…the Mafia supplies prostitutes, pays the taxes (protection money), and keeps the trade going (by running whorehouses). In this regard, it is like any service business. It just doesn’t get counted in GNP. Or :“after hours” nightclubs: these are businesse which operate without official licenses-they provide services to those who are willing to pay for them.
With no crime comes a smaller need for law enforcement, incarceration, law enforcement bureaucracy, security guards, security systems, etc. etc.
An overnight removal of all crime would end up with a lot of people losing their jobs. Closing of prisons, reduction or elimination of police forces, etc.
That’s not a good assumption. The poor make up a disproportionally large number of crime victims.
Been reading The Stainless Steel Rat, have we?
By head count? Maybe. Maybe not.
By economic impact? I’d say overwhelmingly crime by rich people moves more money around – look at Enron, for example. Hewlett Packard’s recent spying on its own board to manipulate (they would have said, “preserve”) stock prices, which the (pro-business Bush-appointed) DOJ called wire fraud. Jack Abramoff.
I’d think that certainly by dollars and political influence…and much less certainly, but still possibly, by head count, the “haves” dominate crime and its economic impact.
Sailboat
I was assuming theft, mostly. I wouldn’t think a poor person who is the victim of theft would have insurance or have the means to replace whatever was stolen.
Therefore, theft from a well to do person probably does benefit the economy somewhat. It puts money (goods) into the hands of the thief and the victim usually ends up replacing the items. Or uses the insurance money for some manner of personal gain.
Perhaps, but they would then be free to pursue other avenues for improving society.
Broken Window fallacy again. The insurance company pays the victim from the premiums it collects from its policy holders. If there was less crime, they would be able to make the same profits by charging less, allowing the policy holders to spread their money elsewhere. Of course, if there was no crime at all, no one would buy a policy against theft, but then they may spend the cash instead on, for example, a more comprehensive fire policy.
Or booze and porn.
Just trying to keep it realistic.
The arrival of the automobile did away with tens of thousands of jobs in the US. Those people went on to do things that better benefited themselves and so society too.
Anything that distracts people from being productive and doing and making things that people actually want is detrimental to the economy. The cops and military and even the anti-virus companies should be off doing something else that’s not just preventing destruction.
Crime is pretty much an economic negative in every individual case - and it certainly is so overall.
There’s a lot of bad assumptions here. First off, Robin Hood is dead and nobody’s filled the vacancy. Most crimes are have-not’s stealing from other have-not’s. If you deal in monetary terms, the biggest crimes are have’s stealing from other have’s. And in a few cases, you got some have’s stealing from a bunch of have-not’s. I can’t quote a statistic but from my understanding of crime, in most crimes the money is going from the poorer person to the richer one - hardly a situation that causes equalization.
The second bad assumption is that this equalization would benefit society even if it occurred. How does the economy benefit if a criminal steals a car from somebody? The owner is out the cost of a car and the criminal gained that car, but the overall economy is the same - nothing was created by the exchange. In fact, the economy diminished as the value of the car was greatly lowered by the fact that it now has no legal title. The criminal will not be able to sell it at anywhere near the same value the real owner would have. Most criminal transactions are the same - nothing is added to the economy, items are just moved around and usually lose value.
The third bad assumption is that the cost of crime prevention is not a factor in the equation. The money that people pay for insurance is partly caused by crime. So is the money people pay for security systems or personal defense. So is the money paid to the police and court system and prisons. If crime didn’t exist, this money could have been spend on things which would have added value like schools and new businesses and investments.
Is crime good for the economy? Well, look at the life of a hypothetical woman in South Dallas, a fairly high crime district. Call her Gabriella Sanchez. She’s a single mom with 2 little kids and she works at a low paying clerical job across town.
Crime is so bad in her neighborhood that supermarkets won’t open there. So, she has to buy her groceries at a small minimart where the prices are much higher. Hence, she pays much more for her food than comfortable middle-class Astorian does.
Crime is so bad in her area that banks closed down all their local branches. She has to go to a check cashing store on payday, one that keeps a sizable chunk of her money. Thus she keeps a smaller percentage of her earnings than middle-class Astorian does.
Crime is so bad that, if Gabriella wanted to go out at night to work on her GED or take a computer class at the community college, she’d run a real risk of being robbed or raped at the bus stop.
Get the idea? Poverty may cause crime, but in this case, crime is helping to keep Gabriella (and a lot of people just like her) in poverty!