Crime has a complex economy. It can be examined at the micro level in terms of why people commit crimes and what they get out of it, and also in its various effects on the well-being of victims and perpetrators. Then you can go to the macro level of how much society is willing to impose itself to control crime and how that money is spent.
This second is a huge problem locally at the moment. Minneapolis is one of the cities where “defund the police” began, following the murder of George Floyd, and its city council voted for it in general, primarily by putting the question on the ballot that voters are now considering. If it is adopted, then it must tackle the details.
In St. Paul, policing spending versus other measures that can reduce crime is a still controversial issue in Mayor Melvin Carter’s budgets. Ramsey County Sheriff Bob Fletcher has been battling with county commissioners over his budget since December.
All this falls under “public finances”. But these specific local problems serve to illustrate general economic principles that appear everywhere sooner or later.
People don’t want to be victims of crime. People don’t like paying taxes. The trade-offs between these contradictory desires are at the heart of the problem of public finances. In a democracy, no one runs for office on a “crime is good!” Platform. “Few say” I’m going to raise taxes! ” Both are political suicides. Yet crime continues and taxes eventually rise.
Instead, we hear the Conservatives claim to be “tough on crime” while the Liberals may prefer “tough on crime, tough on the causes of crime”. Some progressives may even argue that the police are part of the problem, as they did in Minneapolis.
“Severe on crime” can mean the level of the police or the judicial system responsible for charging, judging and carrying out sentences. All of this affects crime rates to some extent. They all take taxpayers’ money.
The police work in at least two ways.
First, the very presence of police, cops, patrol cars or, increasingly, electronic surveillance, is an immediate barrier to criminal acts just as fences prevent toddlers from entering swimming pools. .
Second, beyond this immediate presence, policing deters some people from a potential crime. If you know that there is a high probability of being finally arrested, no matter what cops are on the street at the time, rational people are less likely to commit criminal acts.
The full effect of this depends, however, on the likelihood of a sanction after arrest. It’s like the old military problem of “what’s the probability of this weapon hitting a tank?” “, Followed by the conditional:” if hit, what is the probability that the tank will be destroyed “.
Intensive policing is ineffective if it is not followed by an effective trial and conviction. Yet spending a lot of money on prosecutors, courts and prisons is inefficient if the chance of getting caught in the first place is low. This is why tax fraud now amounts to hundreds of billions a year.
And it all depends on the assumption, like that of Chicago Nobel laureate Gary Becker, that crime results from rational decision-making. Some do, including a lot of tax evasion. But many more are irrational “crimes of passion,” including murder and assault. Many financial crimes such as embezzlement arise from drug addiction or gambling, which can delay judgment.
Yes, the prospect of severe punishment can sometimes turn some heads off. But the deterrent effect of capital punishment, for example, is overestimated by the public. Minnesota has not executed anyone in over a century, yet our murder rate is less than a quarter of that of many death penalty states. Incarceration rates have increased dramatically in some states, like California, but changes in their crime rates generally follow national or state trends that haven’t become more punitive. So many voters are rightly skeptical of slogans.
“Tough against the causes of crime” may sound, but these are fuzzy and diffuse. There is the classic public finance problem of the lack of “match” between the area that pays the taxes – the low-crime neighborhoods of the middle or upper classes, and the areas that see the effects of spending – the poorest neighborhoods in the city. high crime. Yes, Minneapolis could choose to tax more than St. Paul and put more police on the streets and beef up prosecutors. This has immediate barrier and deterrent effects. Voters there this fall could also choose to eliminate the city’s charter requirement to fund cops, which could lead to lower taxes – and then what?
But if a city or county spends a lot more on poverty reduction, drug treatment, improved education, helping struggling families, etc., the overall results can be very interesting. But any specific reduction in crime rates will have a big impact on jurisdictions that do not choose to spend tax dollars in this way.
There are also “collective action” issues. People who have been assaulted or robbed are angry and may be willing to pay higher taxes. Those who are not affected can tsk-tsk on crime issues but lack equal motivation. The great mass of those who are lukewarm on the issue outweigh the smaller number who are outraged when the votes are counted.
Physical isolation and ethnic or racial differences compound this effect. Many people in a physical white, highly educated enclave like my hometown of St. Anthony Park certainly have moral and religious feelings about the shootings and murders in Frogtown or North Phalen, but there is no the same level of visceral indignation as when such crimes occur a block from our homes. Is it cynical for well-off progressives to tell residents of crime-ridden neighborhoods what level of policing should be right for them?
Another effect is that when a collective decision not to raise taxes results in ineffective public security, total private spending increases. The United States is a high crime country compared to most countries in Europe or Australia and New Zealand with similar income levels and lifestyles to ours. And we’re spending a lot more on private business security companies, home and car alarm systems, and now catalytic converter shields, than they do in these countries. Ditto for millions of people spending $ 1,000 on an AR-15 clone or Glock, just to have it at home, mainly because everyone seems to be buying one and they don’t want to be overwhelmed or be the only unarmed household.
So we spend in one way or another without thinking too much collectively about the most efficient and fair way of spending for our society as a whole. Unfortunately, with growing political divisions and growing calls for division, both on social media and within politics, we are headed in the wrong direction.
St. Paul’s economist and writer Edward Lotterman can be contacted at [email protected]