June 18, 2024 

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ACTIVIST POLICY: Government policies that involve explicit actions designed to achieve specific goals. A common type of activist policy is that designed to stabilize business cycles, reduce unemployment, and lower inflation, through government spending and taxes (fiscal policy) or the money supply (monetary policy). Activist policies are also term discretionary policies because they involve discretionary decisions by government. A contrast to activist policy is automatic stabilizers that help stabilize business cycles without explicit government actions.

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Stealing A Few Moments For CRIME

Like most consumers, workers, and taxpayers, I engage in market exchanges for a lot of stuff -- food, labor, shelter, entertainment, confectionery products. But as I wandered through the peaceful community of Shady Valley, U. S. of A., I entered a "market" that I would have rather avoided. That's right, as the title indicates, I exchange some crime. I was mugged -- relieved of several valuable possessions -- right in front of the Shady Valley police station. I did the selling and my mugger did the "buying." While my part in the exchange was involuntary, the mugger's part was quite voluntary. In fact, the perpetrator of this crime acted much like any consumer headed to Natural Ned's Nursery and Garden Center in search of a creeping juniper. Let's see why?

Buying a Little Crime

To beautify the landscape surrounding your abode, you might consider purchasing a nice, decorative bit of shrubbery. Without getting too deeply into the neuro pathways of you brain, let's consider this decision.

On the one hand, you think about the beautification factor -- how much nicer your landscape will appear once you've planted and nourished your creeping juniper. You'll enjoy the beauty. Your neighbors will enjoy the beauty. Family and friends will enjoy the beauty. Even unknown passerbys will get a glint of beauty when passing by. And let's not forget the few extra bucks you're likely to get if and when you choose to sell your more beautified abode.

On the other hand, your pride, joy, and monetary remuneration must be compared to the price of the creeping juniper. Is a $16.95 price tag worth the myriad of benefits to be had from this perennial plant? That's the question any prospective creeping juniper planter must answer.

Weighing the cost on one hand with the benefits on the other is pretty darn fundamental to economics, the economy, market exchanges, our good old scarcity problem, and well, when you get right down to it, life itself.

Crime is no different. The deed is done if the deed doer thinks that the benefit exceeds the cost. While we will focus our attention on the premeditated stuff (robbery, extortion, blackmail, illegal drug sales, gambling, prostitution, and similar nefarious exploits), I'm not sure we need to exclude "abnormal" or emotionally driven acts (kleptomania, sexual perversions, or one enraged spouse murdering another). Even in a fit a rage, the rager likely thinks that the benefit exceeds the cost.

Adding the Pluses and the Minuses

Let's ponder the benefit and cost of crime.

  • Benefit. The benefit is the easy part. For such acts as robbery you get possession of valuable stuff that can be used or sold for cold hard cash. The benefit of other crimes, especially those like gambling, prostitution, and drugs that have legal counterparts, should also be pretty obvious. "Buyers" (criminal-types) expect some sort of satisfaction from the associated good or service.

  • Cost. Unlike more traditional stuff traded through legal markets, the cost of crime is a little more involved. Of course for many crimes you have a significant use of scarce resource. After all, a bank doesn't rob itself, now does it? Given that crimes are illegal, there's also the potential punishment cost. A year spent in jail, means a year that a criminal must forego the benefits from perpetrating other crimes -- a clear example of opportunity cost if there ever was one. Of course, for some potential criminals, the opportunity cost is the more mundane loss of wages or income.

The cost side is particularly tricky because of our law enforcement and judicial systems. If you're a criminal you don't really need to consider the full opportunity cost of being locked up, because you might not be apprehended and, if apprehended, you might not be convicted. A thoughtful criminal is likely to adjust the opportunity cost of jail time by the chance of being caught and convicted. A five percent chance of serving ten years in jail is about the same as a fifty percent chance of serving one year in jail.

The bottom line for criminals is that crime is profitable. If crime wasn't profitable then it would cease to exist.

The Business of Crime

Anything that's profitable will attract highly organized businesses. Crime is no different. It's not the exclusive domain of your run-of-the-mill mugger who's looking for a few extra bucks. Just like proprietorships exist along side the likes of Mega-Mart Discount Warehouse Super Center and Omni Conglomerate, Inc. much of the crime we see today is perpetrated by highly-structured, wide-ranging "business" organizations. A great deal of the illegal drug sales, prostitution, gambling, car thefts, and home burglaries are perpetrated by businesses that would list "crime" as their primary product on income tax returns -- if they actually filed income tax returns.

What About Morality?

This somewhat antiseptic view of crime, with a bunch of crooks sitting around their calculators and personal computers (all of which are stolen) crunching the numbers on the cost and benefit of their crimes, might be troublesome to some. You're concerned about morals, aren't you? How can we put crime into a cost-benefit computation, when the real problem is our decadent society and lack of moral values? If only we would teach our kids the difference between right and wrong, then we wouldn't have any crime, right? Not necessarily.

Morality is a part of our calculation of the cost-benefit, but only part. Morals affect what we can call the psychic benefit of doing the "right" thing and the psychic cost of doing the "wrong" thing. Morality, religious upbringing, the difference between right and wrong, can enter into a prospective criminal's benefit-cost consideration. For example, a prospective car thief might compare the value of a stolen car against a ten percent chance of spending ten years in jail and the possibility of spending eternity in hell.

To some potential crooks the cost of eternal damnation is too much to overcome. For others, it's not. But for all, it's only part of the equation. While a strong dose of morality might reduce crime, there will always be profit in criminal pursuit.

Second the cost side of crime:

  • Better enforcement. More police, more stringent judges, and more prisons will increase the probability of a crook being caught, convicted, and sent to jail. Unfortunately, the vast majority of crimes (probably around 95 percent) go unpunished. It's not clear how many more resources we would need before we get a significant increase in the probability of a crook being punished. The specter of an extremely, big-brother-type, authoritarian society lurks large on the horizon before crime is reduced.

  • Higher incomes. There is, however, another possibility. A big part of the cost is what convicted criminals give up while in prison. This cost is directly related to income, wealth, and standing in society. A bunch of crimes are perpetrator by poor people because they have very little to lose if caught and convicted. For many, prison life actually gives them a higher standard of living. Reducing poverty and increasing the income of potential criminals, will go a long way to prevent crimes. Why steal a television, when you already have two?
Cleaning Up This Crime Infested Town

While stringent morals, knuckle-cracking nuns, intensive religious training might reduce some crime, are there other options? Once more, let's consider the benefit and cost of crime.

First the benefit side:

  • Less valuable crime. A number of programs that seek to reduce the value of stolen property have been tried with some success. For example, many stores have dye packets attached to clothing that do nothing more than stain the garments if not removed with special equipment. The logic is that no one will steal a shirt that's going to end up with a big stain. Other crimes, such as drug sales, could also reduced through the benefit side. Ironically, drugs are valuable largely because they're illegal. Making them legal would lower their prices and decrease drug dealer profits. Dealers would then redirect resources to something that's more profitable -- maybe even legitimate production.

While the whole criminal arena is in the hands of the government, there are a few things that you can consider as a consumer:

Tips for the Crime-Avoiding Consumer

  • You should do your best to screw up crooks' cost-benefit calculations. Make it harder for them to steal your stuff, and do what you can to make the stolen stuff less valuable. Most communities have crime prevention programs that are worth a look.

  • From a public policy perspective, you should consider the alternatives that can reduce crime. Of course, there is your standard law and order) more police, stricter judges) option. But you should also consider some non-traditional avenues that educate, train, employ, or otherwise increase the incomes of potential criminals. Even such things legalizing illegal drugs might do the trick.

Charging Up Your CREDIT CARDS (aka Plastic Money)xxx The Depths Of DEPRESSION


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Today, you are likely to spend a great deal of time searching the newspaper want ads seeking to buy either a pair of leather sandals that won't cause blisters or clothing for your kitty cats. Be on the lookout for letters from the Internal Revenue Service.
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