Gary Becker on Crime

One of the giant minds of economics, Gary Becker, passed away on Saturday. Among other things, he and Kevin Murphy were pioneers in the idea of rational addiction, which I wrote about last year. That was just one example of his approach to applying the tools of economic thinking to a wide variety of other fields such as discrimination, family life, politics, and crime.

It’s the last field which attracts the attention of Kent Scheidegger at Crime and Consequences, who quotes from Becker’s biographical sketch at the Library of Economics and Liberty:

Not even crime escaped Becker’s keen analytical mind. In the late 1960s he wrote a trail-blazing article whose working assumption is that the decision to commit crime is a function of the costs and benefits of crime. From this assumption he concluded that the way to reduce crime is to raise the probability of punishment or to make the punishment more severe. His insights into crime, like his insights on discrimination and human capital, helped spawn a new branch of economics.

This meets with Scheidegger’s approval, and he goes on to comment,

The latter point seems so obvious now, yet the people running around proclaiming themselves “smart on crime” today apparently don’t get it.  The genuinely smart people do.

I’m not sure what Scheidegger means by “smart on crime,” but I have no doubt that Becker said something like that, and I’m pretty sure I agree with him. One of the basic rules of economic thinking is to assume that people respond to incentives. That seems like an obvious thing to say, but economists treat it almost as an axiom of human behavior. They assume that people will respond to incentives at all times, in all places, under any circumstances. Always.

This is obviously something of an oversimplification, of course, but in decades of testing the theory that people respond to incentives against observations of the real world, economists have rarely had cause to regret the assumption. So of course economists like Becker believe that punishing people for committing crimes will encourage them to commit fewer crimes. Anything else would violate one of the most important rules economists have about human nature.

It’s too bad, though, that the folks at Crime & Consequences (especially Bill Otis) don’t take to heart some of Gary Becker’s other writing. For example, economists generally assume that when you make a decision about how to live your life, you will do so with the intent of improving the quality of your life. And since you have to live with the results of your decision, you have more of an incentive to make the right decision than anyone else.

Further, unless you have some sort of mental incapacity (due to age or infirmity, say) you also have more information than anyone else about exactly what will make you happy. It therefore follows that, assuming the goal of public policy is to maximize our combined quality of life, the best approach is to allow each person to make as many decisions about their own life as possible, with the important limitation that they must also allow everyone else to do the same.

Basically, the more people are free to choose, the more they will choose to make the world better. And rather a lot of economists see no reason not to extend this reasoning to include illegal drugs: If you choose to consume them, it must be because you believe they will improve the quality of your life, and nobody has more information or a better incentive to make that consumption choice than you.

Although not the most radical of anti-prohibition economists, Gary Becker had this to say:

The 40 year-old American “war on drugs” has been a colossal failure. No progress in dealing with drugs can be expected until that basic truth is recognized. Every conceivable approach has been tried to help the war succeed, such as long prison terms for persons convicted of selling or using drugs, trying to prevent drugs from entering the US from Mexico and other countries, and confiscating huge quantities of drugs (remember The French Connection?). At some point all wars that fail are terminated, and alternative approaches explored.

The evidence from Portugal, a country that decriminalized all drug use in 2001, offers some support for the claim that decriminalization of drug use will reduce addiction to drugs. A 2010 study in the British Journal of Criminology concluded that decriminalization in Portugal reduced imprisonment on drug-related charges, only slightly increased, if at all, drug experimentation among young persons, increased visits to clinics that help end drug addictions, and reduced deaths from drug overdoses.

The retreat from the war on drugs has already begun. The question is whether it will be a sensible retreat with systematic changes in the law toward decriminalization and legalization of drugs, or a disorganized retreat that leaves users and sellers of drugs with unclear legal status.

Becker and other economists have been saying stuff like that for a long time. It seems inconsistent to believe that people will change their behavior as a rational response to punishment in order to improve the quality of their lives, and yet to assume that observed behavior such as drug consumption is not also a rational response that improves the quality of their lives.

3 Responses to Gary Becker on Crime

  1. I would think the failure of the war on drugs is the evidence AGAINST Becker’s idea that increased punishment reduces crime.

    Of course, maybe the problem is that only those with a vested interest in prosecution consider the drug trade a crime. After all, non-fraudulent transaction between willing buyers and willing sellers are not really crimes.

    The death penalty was supposed to deter crime but there is no evidence that it has. Perhaps Becker’s theory that crime is subject to a cost-benefit analysis only applies to theft/fraud crimes.

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