Probably few, if any, people go through their entire lives without violating some law,
but while many crimes may be committed by people in a moment of passion or a moment
when temptations overcome both morality and logic, the person whose whole livelihood
depends on the continuing commission of crimes is a very different phenomenon. Various studies
over the years have shown that a very small percentage of the population commits a very
large percentage of all crimes. Moreover, this has been true in country after country,
as noted by one of the leading scholars on crime, James Q. Wilson: In studies both here and abroad
it has been established that about 6 percent of the boys of a given age will commit half or more
of all the serious crime produced by all boys of that age. Allowing for measurement errors,
it is remarkable how consistent this formula is—6 percent causes 50 percent. It is roughly
true in places as different as Philadelphia; London; Racine; and Orange County, California.
Very similar patterns have been found for adult criminals. Another pattern that is international
is that of a concentration of violent crimes among young males. Although the absolute murder rate is
far higher in Chicago than in England and Wales, the age-pattern is virtually identical. That is,
the murder rate peaks in all three places in young males in their early twenties and then begins a
sharp decline that continues over the rest of their lives. Criminals are not a random sample
of the population at large. They are typically younger on average than the general population,
disproportionately male and, at least among those caught and convicted, have lower than average IQs.
Nor can we assume that criminals as a whole have much higher IQs than those who are caught, since
most of the serious crime committed is accounted for by those who pass through the criminal justice
system, and there is not enough additional serious crime unaccounted for to indicate a large number
of additional criminals. However, the career criminal cannot simply be dismissed as irrational,
because there is too much evidence from too many countries that he is indeed quite rational.
It is easy enough to say that “crime does not pay,” but the real question is:
Does not pay whom—and compared to what? It is doubtful whether Bill Gates could have done
nearly as well financially as he has by becoming a burglar or even a hit man for organized crime,
but those who do pursue these criminal occupations are unlikely to have had the same alternatives
available that Bill Gates had because of his particular talents and circumstances.
Given the low educational and IQ levels of many who become career criminals,
crime may well be their best-paying option. Given the short time horizons of many of those who make
crime their occupation—especially young people and people from lower social classes—such things as
selling illegal drugs may seem lucrative in stage one, whether or not it leads to prison in stage
two or perhaps never living to see stage two. Crime is one of those occupations, like sports
and entertainment, in which a relatively few at the top achieve very high incomes, while most of
those who enter the occupation receive very low incomes. For example, many ordinary young sellers
of drugs on the street live at home with their mothers, often in public housing projects—clearly
not an indication of affluence—while the lavish lifestyles of drug kingpins attract many young
people into this occupation, in hopes of rising to that level. Again, the rationality of the
choices being made depends on the alternatives available. Someone with a bad record in school,
and perhaps an arrest record, is likely to have very limited options in the legitimate job market.
Even someone with a clean record may be prevented from earning some much-needed money by child labor
laws or by minimum wage laws that set a pay scale higher than an inexperienced teenager
would be worth. But crime is an occupation that is always open to everyone. The rationality of
the career criminal is demonstrated in many ways, including variations in the amount and kinds of
crime committed as the costs of committing those particular crimes vary. These costs include not
only the legal penalties but also the dangers faced by criminals from their potential victims.
For example, burglary rates tend to be affected by the proportion of homeowners who have guns in
their homes. The rate of burglary is not only much higher in Britain than in the United States—nearly
twice as high—British burglars are far less likely than American burglars to
“case” the premises before entering, in order to make sure that no one is home.
Even if someone is at home in Britain, there is far less danger that the person at home will
have a firearm, given the far more strict British gun control laws. Moreover, people convicted of
burglary are treated more leniently in Britain, seldom going to jail. British and American
burglars are both behaving rationally, given the respective circumstances in which they operate
and consequently the different dangers which they face. While only 13 percent of burglaries in the
United States occur while the home is occupied, more than 40 percent of the burglaries in Britain,
the Netherlands, and Canada occur while the home is occupied. These latter three countries have
much lower incidences of gun ownership than the United States, due to more severe gun
control laws. After the Atlanta suburb of Kennesaw passed an ordinance requiring heads of households
to keep a firearm in their homes, residential burglaries there dropped by 89 percent. Another
major cost to a criminal career is the danger of incurring legal penalties, usually imprisonment.
Here criminal activity in general has tended to vary over time inversely with the risk of
imprisonment—which includes the risk of detection, conviction, and sentencing. In the United States,
various legal reforms of the 1960s had the net effect of reducing the likelihood that anyone
committing a given crime would actually spend time behind bars as a result. Crime rates skyrocketed.
The murder rate, for example, was twice as high in 1974 as in 1961, and between 1960 and 1976 an
average citizen’s chance of becoming a victim of some major violent crime tripled. Data from other
countries show similar trends. On a graph showing the rate of crime in Australia from 1964 to 1999
and the rate of imprisonment per 1,000 crimes committed over that same span,
the two lines are virtually mirror-images of one another, with the rate of crime going up when the
rate of imprisonment went down, and vice versa. The graphs for England and Wales, New Zealand, and
the United States are very similar. In the United States, the crime rate peaked in the 1980s and
began falling as the rate of incarceration rose. In England and Wales, the rate of imprisonment hit
bottom in the early 1990s—which is when the crime rate peaked, and then began a substantial decline
as the rate of imprisonment rose. In New Zealand, the high point in crime was reached in the early
1990s while the low point in incarceration was reached about 1985 and then began to rise again,
with the crime rate falling with a lag of a few years. Another example of the rationality
of criminals is their response to the unusual American institution of the private bail bondsman,
a system used by only one other country, the Philippines, which was once an American colony.
In the United States, indicted criminals can pay a bail bondsman to post a bond in their behalf
to guarantee their appearance in court on their trial date, so that they can stay out of jail
pending trial. Typically, the charge is about ten percent of the total bail posted, all of which
is returned to the bail bondsman when the client shows up for trial as scheduled. When the client
fails to show up, however, the bail bondsman forfeits the bail unless he can find the client
and turn him over to the court within a short specified time. The bail bondsmen—sometimes called
“bounty hunters”—are authorized to go capture those who do not show up in court. The rationality
of the criminal is shown by the fact that the rate of court appearances is higher when a bail
bondsman is used than when criminal defendants are released pending trial in other ways.
Because a bail bondsman has a vested interest in a particular individual, he is more likely than the
police are to focus on capturing that particular individual, and is less likely to be inhibited in
his methods of doing so. Criminals, being aware of this, are quite rational to show up for trial.
The same rationality among criminals is shown in other ways and in other countries. In
pre-World War II Britain, for example, when both criminals and the police rarely carried firearms,
even an accomplice to a firearms murder was subject to hanging.
Therefore criminals planning a robbery together would frisk one another,
to make sure no one was carrying a gun that could get all the others hanged if there was a killing
and they were caught. That was a very rational thing to do under the circumstances. While the
amount and nature of crimes have varied with the likelihood of punishment,
this is not to say that crime rates are unaffected by cultural or other differences among countries.
There are serious cultural differences which are no doubt reflected in the absolute levels of
crime among countries, though the similarity in trends already noted is very striking.
As one example of substantial differences between countries in the absolute levels of crime,
despite similarities in trends, in the nineteenth century guns were freely available in both London
and New York City, and yet the murder rate in New York was several times what it was in London.
Early in the twentieth century, severe gun control laws were passed in New York State,
years before such laws were imposed in England—and yet New York City continued to have several times
as high a murder rate as London, as it has for two centuries. Clearly it was not such laws,
or the absence of such laws, which made the difference. Eventually,
Britain’s gun control laws were tightened far more than those in the United States,
especially after the Second World War. However, because New York’s murder rate continued to be far
higher than that in London, and that in the United States far higher than that in Britain,
this differential was often attributed to differences in gun control laws, even
though large differences in murder rates existed long before either country had gun control laws,
and persisted even when the United States had gun control laws before Britain did.
While there are undoubtedly many complex factors behind the absolute crime rates in any country,
the trends strongly suggest that changes in crime rates reflect rational reactions
to changes by criminals in the costs they pay, both in punishment inflicted by the
law enforcement system and the risks of being harmed by their intended victims.
The asymmetrical effects of gun control laws on criminals and law-abiding citizens have
been reflected in the fact that, as gun-control laws tightened in late twentieth century Britain,
rates of murder and armed robbery increased, which is consistent with the fact that such criminal
activities became safer when there was more assurance that potential victims were unarmed.
With criminal economic activities, as with legal economic activities, behavior differs when there
is free competition in a given field as compared to monopolistic control of that field. With both
legal and illegal activities, there tends to be more production with competition than with
monopoly. That is, the incentives and constraints tend to lead to more crime being committed
when the criminals are individual independent operators than when they are part of an organized
crime syndicate. For example, a small-time criminal may find it expedient to kill some
local store owner for the small amount of money in the store’s cash register, if only to keep the
store owner from identifying him, even though this might make no sense to organized crime.
Public outrage at such a murder could result in more law enforcement activity in the area,
reducing the profitability of the crime syndicate’s business in illegal drugs,
prostitution, and other activities by making local customers more hesitant to engage in
such activities when there was an unusually large police presence in their neighborhoods. This could
easily cost the crime syndicate far more money than there was in the store owner’s cash register.
Such repercussions can be largely ignored by individual criminals operating independently,
since the killer of the store owner may lose little from the increased law enforcement,
compared to what criminals as a whole are losing in that area.
However, when the criminals in a given area are more likely to belong to a crime syndicate,
their activities are restrained by organized crime leaders who have to take wider repercussions into
account. In other words, the monopolistic firm has incentives to produce less than competitive firms
would have produced in the same industry, just as with legal economic activity. In this case,
that means producing less crime. When there is strong organized crime control
of a given neighborhood, even independent criminals operating in that neighborhood
have to take into account whether some of the things that they would do otherwise
might displease organized crime leaders and bring retribution.c In some cases, independent
criminals may have to split their earnings with the syndicate for permission to operate, thereby
reducing the rewards of crime and the incentives for being an independent career criminal.
One of the more dramatic examples of the restraining effects of a crime syndicate
occurred in New York City in the 1930s, when crusading federal prosecutor Thomas E. Dewey
was cracking down dramatically on organized crime, costing the crime syndicates considerable money
and sending many of their members to prison. Crime boss Dutch Schultz thought that Dewey
should be killed but other crime syndicate leaders decided that this would provoke too
much public outrage—and consequently increased law enforcement activity that would discourage patrons
of their prostitution, gambling, and other illegal activities, further reducing incomes from these
enterprises. When Dutch Schultz announced that he was going to kill Dewey anyway, the syndicate had
Schultz assassinated instead. They were well aware that the killing of a mobster would provoke far
less public reaction than the assassination of a popular law enforcement official.
Decades later, there was a report of a desire of some crime leaders to assassinate Rudolph
Giuliani when he was a federal prosecutor who sent many mobsters to prison in the 1980s.
But, if so, no one repeated the mistake of Dutch Schultz.
As the New York Times reported: For one thing, assassinating a prosecutor would go against
decades of tradition. American Mafia leaders have generally treated their organizations as
businesses primarily concerned with making money. Killing law enforcement officials,
in this view, would only draw unwanted scrutiny. The same reasoning that would lead us to prefer
competitive producers, when what is being produced is what people want, would lead us
to prefer monopolistic producers—organized crime—when what is being produced is an
activity that most people do not want. Ideally, we would prefer that no crime at all be produced
but, since the ideal is seldom realized, a more realistic goal is the optimum quantity of crime.
Both law enforcement and organized crime tend to reduce the total amount of crime.
Even if it were possible to reduce all crime to zero by providing vastly more resources
to law enforcement agencies, that would not necessarily be economically optimal.
While most citizens would probably welcome more government expenditures on crime control
if that in fact reduced felonies, no one would be likely to be willing to spend half the country’s
income—that is, reduce the standard of living in half—to prevent occasional shoplifting.