Crime and Punishment: An Economic Approach
In 1968, Gary Becker published the journal article ‘Crime and Punishment: An Economic
Approach’ which attempts to reconsider criminality as a rational economic decision rather
than a moral and societal failing. The most significant question Becker poses in this article is,
‘How can society allocate its resources to optimally minimise the incentives to commit crime
given the cost and benefits to all involved?’ The model Becker employs asserts that potential
criminals will weigh the expected benefit of committing a crime (such as monetary benefits)
against the expected costs of their action (such as the probability of being caught and severity
of punishment) to determine whether it is worthwhile committing the crime. It is in this
relationship between risk and reward that our society faces trade-offs. Increasing the spending
on law enforcement and invoking worse punishment can reduce crime, however, at the
expense of higher costs in both the public and private sectors. Developing this relationship
further, Becker concludes that the most optimal law enforcement level and harshness of
punishment is not necessarily zero crime or maximum harshness, but instead the point at
which the marginal cost of increasing law enforcement further is equal to the marginal benefit
society receives from a reduction in crime. In the simplest terms, Becker has concluded that
people only commit crimes when they are deemed ‘worth the risk’, in response a society will
make crime less attractive by introducing harsher penalties and policing. However, both
crime and policing are expensive for society, in both explicit and implicit terms, therefore the
best outcome weighs these costs together to find the point that minimizes overall harm to
society, monetary and otherwise.
This paper was quite intriguing to me in how it applies economic modelling and logic to what
I would’ve previously considered a non-economic area. Becker’s approach to understanding
in economic terms why crime occurs gave me a new lens to look through regarding the idea
of crime. It detaches itself from morality and stigma, instead opting to take a purely economic
analysis that materializes in the understanding that crime and preventing crime are simply
about incentives and resource allocation. Prior to reading this paper, I would’ve considered
crime and punishment a significantly different field to economics, however, I have learnt that
economic ideas are applicable in just about any scenario involving humans.
However, despite the strengths of this paper, there are a few key assumptions made that are
critical to the success of the models presented. The largest assumption is that all individuals
will act rationally and have access to perfect information about the risks and rewards of
committing a crime. In reality, there will be many situations where a person may commit a
crime without perfect information or rationality, whether that is because it is an impulsive
crime or more simply the criminal has misjudged these factors.
The only suggestion I could make to improve the scope of this paper is that the models must
consider the fact that not everyone can act rationally. To involve the variables of
impulse/imperfect information would drastically improve the level to which this relationship
can be explored.