Choices not economics cause of criminality

By DAVID MOON, Moon Capital Management, LLC
August 18, 2013

In the United States, poor people are more likely to commit crime.

This is a fact according to the FBI and Ohio State University researchers. It is reasonably indisputable. What is disputable, however, is the question of cause and effect. Chicken and egg.

Logic tells us that being either poor or a criminal does not cause one to become a racial minority. Common sense tells us that being a member of a minority group is not the cause of poverty or criminality.

In 1968, economist Gary Becker posited an economic theory of crime. Since then, many sociologists and economists have argued that people resort to crime only if the costs of committing the crime are lower than the benefits gained.

That logic only makes sense if the person contemplating the crime has access to all relevant information and is both intellectually and emotionally capable of doing a cost benefit analysis.

That is a big “if.”

According to the FBI, when the US entered the recession of 2007 and 2008, the property crime rate actually declined. The rate has continued to fall since then, much as it has almost constantly since at least 1992.

In a two-decade period in which a greater percentage of our country’s wealth has been concentrated in a smaller percentage of its population, almost every category of US crime has decreased.

The US murder rate has fallen by almost 50 percent. Rapes have declined 38 percent. Robberies are down 48 percent.

The USDA tells us that the number of Americans receiving food stamps increased 83 percent in those same 20 years, about the same increase as in our prison population.

University of Chicago professor Jens Ludwig argues that poverty leads to stress, which inspires people to come take our stuff.

For a guy whose first address was “6 Paradise Trailer Court” and attended dumpy rural schools, that’s hard for me to accept.

My high school classmate, Brian Richardson, was convicted of killing his cellmate while serving a 65-year sentence for armed robbery. His death-penalty trial was the most expensive ever in Georgia.

Brian’s house was nicer than mine as a kid. But even in high school I would have voted Brian “most likely to kill his cell mate with a fire extinguisher pin.”

My opinion has changed over the years. Fifteen years ago, I wrote in this column that current racial divisiveness would never be solved in the presence of economic divisiveness.

Over the past 20 years I’ve observed that changes in a person’s financial situation – either a massive increase or decrease – merely reveal a person’s character, not change it.

Crime is, in almost every way, an irrational act. Bernie Madoff, the head of a drug ring and a petty thief all share either a lack of conscience or an inability to think logically. None act in their overall self-interest.

Every property crime requires opportunity, motive, choice and action. Plenty of people share motives with thieves, yet choose not to steal.

The only difference? Choice.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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