A Market Approach To Crime

By Kelly McCutchen


Eight out of 10 Americans are likely to be victims of violent crime at least once in their lives, according to the Bureau of Justice Statistics. Politicians and the media have finally begun to react to this increasing problem, but they are relying on slogans rather than common sense for their solutions. The best approach to crime is to realign the incentives and disincentives to criminal behavior.

First, ensuring that criminals are swiftly caught, convicted and serve the majority of their sentence is the best disincentive to criminal behavior. Second, those who are at the highest risk of committing crimes should be encouraged to improve their situation without resorting to criminal means.

Keep Violent Criminals Off the Streets
Criminals know the odds are with them. According to Morgan Reynolds of the National Center for Policy Analysis, “Today, for a burglary, the chance of arrest is 7 percent. If you are unlucky enough to be one of the 7 percent arrested, relax; only 87 percent of arrestees are prosecuted. Of those, only 79 percent are convicted. Then only 25 percent of those convicted actually go to prison. Multiplying out all these probabilities gives your would-be burglar a 1.2 percent chance of going to jail.”

Violent criminals in Georgia currently serve only 53 percent of their sentence. After they are released, the Georgia Department of Corrections estimates that 37 percent of the prisoners return to prison within three years. Based on these facts, one simple way to dramatically reduce Georgia’s crime rate would be to mandate that all violent offenders serve at least 85 percent of their sentence before they can be eligible for parole.

Many people argue that keeping violent offenders locked up for long periods of time is too expensive for the State. In reality, it is too expensive for us not to keep violent offenders behind bars.

For example, a 1982 Rand Corporation study found that the average robber commits between 41 and 61 robberies a year. In a 1988 study, Mark Cohen, a researcher at the U.S. Sentencing Commission, calculated the cost to society of each robbery to be $12,594. Based on this figure, the cost of returning a robber to the streets is over $500,000 per year. Compare this with the current cost of $16,425 necessary to house a criminal in a Georgia prison for a year.

Why Aren’t We All Criminals?
It’s not difficult to identify common characteristics of criminals. A 1992 profile of Georgia inmates revealed: 55 percent grew up in a household without both parents present; 35 percent had a less than a 5th grade reading level; only 14 percent were married; only 17 percent were employed full time; 50 percent had at least one prior incarceration and 75 percent had a substance abuse problem.

Why do law-abiding members of a community resist the temptation to commit crime while others do not? Non-criminals have a sense of right and wrong, most likely brought about by a strong family upbringing. More importantly, however, non-criminals also have too much at stake to risk a life of crime. They have a job, personal possessions and their good reputation. Conversely, criminals have little to lose. To truly be effective against crime, we must give our disenfranchised citizens something to lose. We must give them the opportunity to help themselves. Simply, we must give them hope.

Eliminate Taxes: A good start would be to end the taxation of income earned by minors. This would encourage youth to take on part-time jobs by increasing take-home pay. A job will keep kids off the streets and give them skills they can use later in life. In addition, their co-workers may become the role models that so many of these young people growing up today lack.

Education: Many low-income children fail to learn because they are trapped in mediocre, violence-ridden schools, and their parents cannot afford to move to a better district. Without a solid education, these children are doomed to suffer the same limited job opportunities of their parents. Each student has different needs. Private, public and parochial schools across Georgia already specialize in meeting these needs. Since Georgia’s HOPE scholarships and the Tuition Equalization Program allow Georgians to attend the college of their choice, why can’t we help them attend the elementary school of their choice?

Mobility: Why do we trap low-income Georgians in public housing projects that are often rife with violence and decay? We should halt all new construction of public housing and allow low-income families to locate where they wish. This could easily be done by diverting construction funds into a housing voucher program, where low-income citizens can shop around for a place that fits their needs.

Jobs and Training: We should provide incentives to private businesses and charities to train and aid low-income individuals in their job search. A state grant to these organizations for each individual placed in a permanent job would encourage community cooperation and provide better training and placement than similar government training programs.

Welfare Reform: We must end the perverse welfare rules that serve as disincentives to work and marriage. Like everyone else, welfare recipients will respond to incentives. Should we be surprised at the dramatic increases in illegitimacy and single parents? We have been rewarding this behavior for years. It is time to reward work, marriage and individual responsibility.

Public policies that encourage marriage, education and jobs will save many of our citizens from a life of crime. By allowing our at-risk citizens to become a stakeholder in their own lives, and by increasing the penalties for convicted criminals, we can create a society where crime doesn’t pay, but being a productive citizen does.


Kelly McCutchen is Executive Director of the Georgia Public Policy Foundation, a nonpartisan, member-supported research and education organization based in Atlanta, Georgia. The Foundation promotes free enterprise, limited government and individual responsibility.

Nothing written here is to be construed as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature. © Georgia Public Policy Foundation (February, 1994) Permission is hereby given to reprint this article, with appropriate credit given.

By Kelly McCutchen

Eight out of 10 Americans are likely to be victims of violent crime at least once in their lives, according to the Bureau of Justice Statistics. Politicians and the media have finally begun to react to this increasing problem, but they are relying on slogans rather than common sense for their solutions. The best approach to crime is to realign the incentives and disincentives to criminal behavior.

First, ensuring that criminals are swiftly caught, convicted and serve the majority of their sentence is the best disincentive to criminal behavior. Second, those who are at the highest risk of committing crimes should be encouraged to improve their situation without resorting to criminal means.

Keep Violent Criminals Off the Streets
Criminals know the odds are with them. According to Morgan Reynolds of the National Center for Policy Analysis, “Today, for a burglary, the chance of arrest is 7 percent. If you are unlucky enough to be one of the 7 percent arrested, relax; only 87 percent of arrestees are prosecuted. Of those, only 79 percent are convicted. Then only 25 percent of those convicted actually go to prison. Multiplying out all these probabilities gives your would-be burglar a 1.2 percent chance of going to jail.”

Violent criminals in Georgia currently serve only 53 percent of their sentence. After they are released, the Georgia Department of Corrections estimates that 37 percent of the prisoners return to prison within three years. Based on these facts, one simple way to dramatically reduce Georgia’s crime rate would be to mandate that all violent offenders serve at least 85 percent of their sentence before they can be eligible for parole.

Many people argue that keeping violent offenders locked up for long periods of time is too expensive for the State. In reality, it is too expensive for us not to keep violent offenders behind bars.

For example, a 1982 Rand Corporation study found that the average robber commits between 41 and 61 robberies a year. In a 1988 study, Mark Cohen, a researcher at the U.S. Sentencing Commission, calculated the cost to society of each robbery to be $12,594. Based on this figure, the cost of returning a robber to the streets is over $500,000 per year. Compare this with the current cost of $16,425 necessary to house a criminal in a Georgia prison for a year.

Why Aren’t We All Criminals?
It’s not difficult to identify common characteristics of criminals. A 1992 profile of Georgia inmates revealed: 55 percent grew up in a household without both parents present; 35 percent had a less than a 5th grade reading level; only 14 percent were married; only 17 percent were employed full time; 50 percent had at least one prior incarceration and 75 percent had a substance abuse problem.

Why do law-abiding members of a community resist the temptation to commit crime while others do not? Non-criminals have a sense of right and wrong, most likely brought about by a strong family upbringing. More importantly, however, non-criminals also have too much at stake to risk a life of crime. They have a job, personal possessions and their good reputation. Conversely, criminals have little to lose. To truly be effective against crime, we must give our disenfranchised citizens something to lose. We must give them the opportunity to help themselves. Simply, we must give them hope.

Eliminate Taxes: A good start would be to end the taxation of income earned by minors. This would encourage youth to take on part-time jobs by increasing take-home pay. A job will keep kids off the streets and give them skills they can use later in life. In addition, their co-workers may become the role models that so many of these young people growing up today lack.

Education: Many low-income children fail to learn because they are trapped in mediocre, violence-ridden schools, and their parents cannot afford to move to a better district. Without a solid education, these children are doomed to suffer the same limited job opportunities of their parents. Each student has different needs. Private, public and parochial schools across Georgia already specialize in meeting these needs. Since Georgia’s HOPE scholarships and the Tuition Equalization Program allow Georgians to attend the college of their choice, why can’t we help them attend the elementary school of their choice?

Mobility: Why do we trap low-income Georgians in public housing projects that are often rife with violence and decay? We should halt all new construction of public housing and allow low-income families to locate where they wish. This could easily be done by diverting construction funds into a housing voucher program, where low-income citizens can shop around for a place that fits their needs.

Jobs and Training: We should provide incentives to private businesses and charities to train and aid low-income individuals in their job search. A state grant to these organizations for each individual placed in a permanent job would encourage community cooperation and provide better training and placement than similar government training programs.

Welfare Reform: We must end the perverse welfare rules that serve as disincentives to work and marriage. Like everyone else, welfare recipients will respond to incentives. Should we be surprised at the dramatic increases in illegitimacy and single parents? We have been rewarding this behavior for years. It is time to reward work, marriage and individual responsibility.

Public policies that encourage marriage, education and jobs will save many of our citizens from a life of crime. By allowing our at-risk citizens to become a stakeholder in their own lives, and by increasing the penalties for convicted criminals, we can create a society where crime doesn’t pay, but being a productive citizen does.


Kelly McCutchen is Executive Director of the Georgia Public Policy Foundation, a nonpartisan, member-supported research and education organization based in Atlanta, Georgia. The Foundation promotes free enterprise, limited government and individual responsibility.

Nothing written here is to be construed as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature. © Georgia Public Policy Foundation (February, 1994) Permission is hereby given to reprint this article, with appropriate credit given.

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