Comments on Crime and Poverty

It's important to note the incentives supplied by an impoverished environment are greatly different from those that exist in stable societies and classes of people. For low-income earners, the benefits of saving and using money frugally are less because a quite significant of savings would be required simply to improve an individual's livelihood marginally. In the same way, the poorest in society, due to their economic situations, are typically most liable to risk themselves gravely (crime included) to try to promote their quality of life.

This said, in a notable article in the Journal of Political Economy far back in 1948, the economists Leonard Savage and Milton Friedman proposed for this same reason, the curvature of one's utility function changes bases on one's level of income. This is to say that those with lower incomes are often risk-seeking because risk does indeed provide at least a chance at improving one's standard of living, whilst its punishments and downsides do not damage their already difficult to bear lives (said other-ways, their opportunity costs would be much lower in this case). As a consequence, these people with considerable frequency assume higher risks as playing the lottery or committing crime itself. The opposite would be true for those with higher incomes; these people would more likely exhibit a risk-aversion that obliges them to purchase insurance and other security services.

Thus it should be clearer that the principle reason for the ubiquity of crime in poor communities is not necessarily due to moral deficiency or lack of education. And, although social strife may encourage crime, people who commit serious crimes simply (and perhaps rationally) evaluate that acts of higher risk are worth the pain for those who lack access to other means of enriching themselves and for those who do not have much to lose.

Still modern, developed society can give its inhabitants access to an unprecedented stability: a situation so regulated that any antisocial desires of an individual be retained by Hobbes' "Leviathan" so to speak. Although liberalization has been a decisive factor in economic development en all parts of the world, perhaps even more important are the legal limitations which society imposes over popular conduct to disable said antisocial risks (from crime of various levels to myopic economic exchange) on the part of those most disposed to put themselves at risk.

Needless to say, such a Leviathan does not come free and ofttimes significant amounts of public resources are required to maintain public order. Thus given that these resources require a hefty social surplus, one must wonder, "which came first? Social order or economic development?" This serves as one of the most pertinent questions in development economics, but without generalization, we could only say that there need be concordant reductions in crime and poverty to accomplish a developed and safe society, for these factors interact complimentarially

As well, although a powerful state can indeed impede the chaos caused by high-risk behavior, this does not necessarily transfer directly into the economic enrichment of the people. The stability engendered by a lack of crime does not directly produce economic possibilities; although it can enable them. So strangely enough, there can exists governments with policies which are totally propitious for development even if such development still fails to occur.

Yet the principal pattern which can be seen world-round is that there is a strong correlation between penury and crime. Surely many take for granted the inclination of rich and developed nations to stability and growth, still in the majority of the world instability and poverty are the natural laws of the land. But at least, the general connection between the two is quite obvious, even though the precise causality is difficult to isolate.

Perhaps most important is the fact that policies which can be followed to reduce one of these grievances often have "spill-over" effects upon the other. Quite often, initiatives promulgated to stabilize communities in criminological terms enable incentives to save and to invest in human capital. On the other side, programs with goals of societal development can result in a fall in crime indices.

At the last, criminality and poverty share the same situations, while (hopefully at least) they may share the same solutions. For the governments of developing countries, the most unfortunate thing is the fact that at times, development and the pacification process cannot be seen immediately as caused by the policies that facilitate them. In many cases, a strong market and cultural values are needed which encourage the processes that contribute to the enrichment of the people, but because of this, initiatives of the state which theoretically would reduce criminality cannot be adequately appreciated for the disturbing lack of immediate and obvious improvement.