Behavioral economics can help in the fight against crime - Obserwator Finansowy
by Sebastian Stodolak, on May 12, 2020 11:31:06 AM
This article has been transferred from its original source and translated from Polish. To read the original article in full, please click here.
Gary Shiffman: It's a simplification. Let's look at criminals as business leaders. The economic perspective allows us to better understand the phenomenon of crime. Why does violence appear here and not there? Why are we recording today, for example, an increase in the number of crimes committed at home and less burglaries? Well, human behavior is largely predictable. Criminals simply adapt to the conditions.
Are criminals predictable?
Of course, they make decisions based on the calculation of the potential profit from the activity, the potential cost of being caught, and a comparison with a possible alternative. It is easy to predict that the scope of alternative activities for criminals as a result of a pandemic and lockdown will decrease. We don't rob a bank, for example, because the banks are closed, and we have to sit at home, because there are a lot of police and army patrols on the streets. On the other hand, there is more space to take criminal actions online. People have switched massively to online shopping, and criminals have nothing better to do than sit at the computer.
Will there be more scams on credit card numbers?
Possible, but not only. Criminals are eager to deal with safer activities. For example, pushing people with different magical drugs to protect them against coronavirus, or simply trading "left-handed vitamin C". The sale of such products is often legal, and some ways of advertising them are only illegal. In criminal calculations, this means a low risk of getting caught. Criminals are businessmen, the mafia is simply a company. If it is able to adapt to the new conditions, it will be doing well. If not, he will go bankrupt.
Mafia is a general term. Kt hat are its industries, "will manage" a best?
Those that usually derive revenues from the sale and distribution of illegal goods on the market. Let's say some organization sells heroin in normal times. Today it can be more difficult. Such an organization can relatively quickly switch to trade in drugs that help in the fight against COVID-19, strengthening immunity.
So the crisis we are experiencing can make the Mafia take care of not only legal but also socially beneficial activities?
Yes, it is possible, although of course it may well deal in the trade of deceptive medicines. It all depends on what will be more profitable. Criminals are criminals not because they want to be angry but because they want to make money. A retired American drug police agent mentions that when interrogating one of Pablo Escobar's deputies, he heard from him: "If Americans began buying bulk dog droppings, I'd leave cocaine and start building dog farms." Criminals do not look for forbidden things to choose the most morally repulsive one. They are looking for a niche market. So if, for example, they could today smuggle masks and respirators with a higher return on drugs, they would probably do so. Of course, this does not mean that they will produce them. They will probably steal them. You can also imagine that if the vaccine for COVID-19 appeared today, but it would only be widely distributed within a year, the mafia would accelerate this path for those willing to pay for it. In other words, the mafia will complement the market deficiencies produced by the coronavirus.
"Criminals do not look for forbidden things to choose the most morally repulsive one. They are looking for a niche market."
However, a large part of mafia organizations do not deal with particularly logistically advanced operations on a daily basis, they do not have such a large business capacity to jump between one industry and another.
It depends. Let's take the owner of an illegal brothel. Certainly it loses revenue because customers stop appearing due to lockdown. He can either close his business or start supplying some other desired product. Managing a brothel, he probably has contacts in the police, in offices, among politicians, and may, for example, get access to some medical goods that he will then trade with. I have recently researched human trafficking, still driven partly by the "demand" of brothels, and they confirm that this industry is still cross-border, international, and very well organized. It can be assumed that it will be flexible during a pandemic.
If the economy makes us look at crime as an economic activity, then does it answer why, despite all, the vast majority of entrepreneurs take legal action?
Because most of them have the opportunity to profitably operate in a legitimate economy, and they consider the risk of getting caught and spending several years in prison as too high. In short, you don't commit crimes because you don't want to risk the life you have and your bright future as a journalist.
And not because first of all I consider crime a moral evil?
It also has some meaning.
Yes. It's just part of the calculation. Committing a moral offense is seen as a cost. The cost of criminal activity does not have to be exclusively financial, it does not have to be solely related to the potential prison sentence, and may also include the inability to look oneself in the mirror without remorse: "I am not what I wanted to be." The moral side of given activities can also be included in economic considerations. People differ in the degree to which they are attached to moral values, they differ in conscience, they differ in the very set of values in which they believe.
A Muslim will calculate differently than a Christian.
Probably so. However, even within one religious group, people understand ethics in different ways. Therefore, one cannot generalize and say, for example, that Christians will commit these crimes more often, and Muslims those more.
You say that people are predictable.
To a certain degree.
I just watched the series "Khilafat" which tackled the topic of terrorism. We have portrayed intelligent and stupid terrorists, believers and cynical, rich and poor. Is this an adequate picture of this group of people?
So can economic models predict which individuals are, for example, more susceptible to religious indoctrination, who are willing to engage in terrorist activities, etc., since we are dealing with such a heterogeneous group of people?
The models do not allow to predict the behavior of a given group member only because of the general characteristics of this group. Unfortunately, security services around the world still have a poor understanding of this. We assume, for example, that all members of the Islamic State believe in X, Y and do A, B and C. This is a mistake. These are only generalizations and our assumptions, very often completely inconsistent with the reality of specific cases. Economics applied to crime teaches us that any meta-narrative leads to misdiagnosis. It is better to want to know who the leader is, what their motivations and goals are, in order to get to know a given criminal group. For example, you can have a terrorist group whose motto is religious purity, but the real purpose of its leader is power or money. Ideology then simply becomes a tool to the end.
"The models do not allow to predict the behavior of a given group member only because of the general characteristics of this group. Unfortunately, security services around the world still have a poor understanding of this."
Can we economically determine who is right in the dispute over the fundamental cause of terrorism? In the US, after the attacks of September 11, 2001, two theories apply. First, that terrorism comes from hatred of freedom. The second is that the US is involved in things. Your words show that none of them can describe terrorism as a phenomenon in its entirety ...
Origin of terrorism? It's one of the biggest mysteries of our time, and you want me to answer it in 30 seconds (laughs). I don't know where terrorism comes from, but I know that by saying that it comes from someone's hatred for our freedom, we say that every terrorist hates us for this very reason. This approach does not make sense, it is empirically false as a general judgment. Leaders of various parties want to sell us such a narrative as corporate marketing of their organizations. The United States, for example, once agreed with Arab countries quite well, e.g. with Iran's esteem before the revolution there. New revolutionary leaders adopted anti-American rhetoric as a kind of marketing of their power. When we say that people from a given country, religion or culture always feel and behave in the same way, we are simply saying untruth.
OK, let's forget about terrorism, let's get back to the members of "ordinary" mafia groups. Often, excuses are sought, indicating, for example, difficult childhood, poverty, etc., and then says: let's get rid of these roots of crime and get rid of crime. Is this the right thing to do?
No. If it were a full and accurate explanation, we would have far more criminals in the world. How many people of those who are born in poor families do not become criminals? The vast majority. Yes, life circumstances have an impact on the life choices we have. Poverty, childhood trauma, drug addiction are just one of many factors shaping our choices, not determinants of crime. An economic view of crime makes us look at everyone very individually. Aggregates as in macroeconomics are of limited use here. Hence, for example, police attempts to target the population in terms of skin color, because statistically we think that people with color X commit crimes more often than with color Y are simply ineffective. Sure,
In the US there is probably a big problem with this.
Yes, if you look at data on incarnations in the US, Latin American or African American land disproportionately more often than whites behind bars. This is the basis for the conclusion that there is something wrong with the law enforcement system. However, this should not lead us to the conclusion, for example, that policemen are racists, because we would make the exact same mistake: we would assign a general narrative to all members of this group.
I wonder how you look at the war on drugs. Most economists find it pointless because it cannot be won. Do you agree with that?
Yes. First of all, the very wording "war on drugs" is simply stupid. Just as stupid as the "war on terror." The use of this wording has a political purpose: to gather public resources to spend them in ways that the leader considers appropriate.
Wait a minute. If you were hired to decide on a drug policy, would you recommend stopping any action?
No, that's not what I want to say. I believe that the fight against such crime makes sense, but it should be pursued on a different basis. Instead of declaring war to drug traffickers, the costs of running their business should be raised so high that they decide on their own to do something else, maybe even legal.
Is this not simply a matter of introducing higher penalties for drug trafficking?
Not necessarily. Market costs are relative in nature. The attractiveness of drug trafficking may drop if we lower the access threshold to ordinary businesses. If the criminal sees that selling pizza is becoming easier and more profitable than selling heroin, he will switch to it. As for raising the amount of penalties, this is not the most effective method. The purpose of law enforcement is deterrence. Better execution is better deterrence. If the risk of getting caught increases, the motivation to unsubscribe from the mafia increases. How high the sentences are is a secondary matter.
"The purpose of law enforcement is deterrence. Better execution is better deterrence. If the risk of getting caught increases, the motivation to unsubscribe from the mafia increases."
Not all criminals, however, care about the risk of being caught. Some do not have financial motivation. They do evil for other reasons - such as rapists.
Yes I agree. Treating all criminals as a homogeneous group is a mistake. A truly scientific approach in this regard is to understand that each of them is a person who has their own individual motivations. As a theoretician of modeling human behavior, I consider this as a foundation.
You worked as the Chief of Staff of the US Customs and Border Protection Office. Does economics suggest how to manage immigration so as not to suppress it and at the same time reduce its negative effects, such as the influx of criminals ?
There is nothing wrong with immigration alone. Evil and violence come from our reaction to it.
You don't say that the ISIS terrorist who slipped across the border to Europe committed an act of terror through the fault of Europeans?
No, of course not. Imagine a world of purely national states, without ethnic minorities. A world in which such countries are separated by a high wall. Economics tells us that it would be a very poor world. The second extreme is the total freedom of capital, people and work. People travel wherever they want, for free and instantly on the magic carpets. And in this version of the world there is nothing that would necessarily be a source of violence, and it would be much richer. There is no reason to consider immigration a threat. The source of violence is somewhere else: in perceiving the world as a struggle for limited resources, where you have to choose sides, divide the world into "us" and them. And in this context, let's think about a terrorist. Why does he see the world in this way? Why does he choose the path of violence? What does he want to achieve?
But how does this relate to immigration security?
Yes, this approach is necessary if we want to combat terrorism as a phenomenon without killing the hen, or immigration. It's a matter of strategy and identification of the real problem. Of course, there is tactics. And she makes you look suspiciously at someone who committed a crime yesterday. We assume that there is a chance that he will make them tomorrow and we will not let him into the country. However, these are ad hoc measures. By focusing on reducing immigration, we do not eliminate the cause of the problem.
Let's go back to the mafia and pandemic for a while. What will happen next? Since now some crimes simply cannot be committed, will we witness a wave of crime after the pandemic?
I don't think that this would happen. However, it can be assumed that, like other industries, the mafia industry will also undergo profound structural changes.