Thursday, August 11, 2011

Economics of Rioting

In the past few days, Amazon.co.uk have reported a 5,256% rise in demand for baseball bats, and I don't think this is due to a sudden surge of popularity for the American sport. Whatever happens, there is always someone who seems to manage to benefit....

When young people engage in random acts of violence, you inevitably seek to find causes and explanations. You get torn between the arguments of economic and social depravation and the other more obvious issues of individual moral and ethical failure.

The Scarman report after Brixton riots of 1981, did put much of the blame on high unemployment and economic deprivation. - The economy of 1981 was a period of exceptionally high unemployment, especially amongst some ethnic minority groups in London (In Brixton black youth unemployment was estimated at 55%). Comparatively in 2011, unemployment is lower.. Also, the first pictures of convicted rioters in court suggested there was a cross range of participants from school assistants to shop workers and bored teenagers. - Hardly evidence this was a riot by people desperate to get enough money to feed themselves.

What is the economists' response to rioting?

Whether there is rioting or not, an economist is concerned with the idea of creating full employment (or at least should be). But, there is a limitation, even the best policies to create full employment and economic stability cannot alone change people's behaviour.

As an economist a deeply ingrained principle is the idea that 'the polluter pays'. In other words the governments responsibility is to make people may the full social costs of their action. If you pollute the local rivers you have to pay for it. If you smash up windows and take part in looting, you should have to pay the full financial cost - repay shop-owners, cost of policing, cost of local magistrate courts.

If prison isn't a deterrent, impose fines which fit the cost, and if necessary take away there assets.

I looked into this in much more detail here Cost of Crime in UK
Basically, there are many crimes, where the criminals don't pay for the financial cost of their actions. If they did pay the financial cost, it would be one of the best deterrents, and what better form of justice but to make the cuplrits pay for the full cost of the damage?

1 comment:

Anonymous said...

do you think the bankers should also pay for the problems they have caused?