2011 January 09 Sunday
Cashless Economy To Cut Crime?

Is the move toward a cashless economy decreasing crime by reducing the amount of cash people use?

Most violent crime is the result of one person trying to take another person's cash, whether it's an addict robbing a convenience store or one dealer robbing another, says Wright. If cash isn't available to steal, the opportunities to commit crimes dwindle. At the same time, the drug trade, which relies on cash at the ground level and drives a large portion of violent crime, withers. Sure, drug dealers can still transfer funds electronically, but only at high levels. Street dealers are unlikely to use credit card swipe machines anytime soon.

Debit cards are much harder to use because you need to know the PIN. Criminals have been known to force someone to go to an ATM with their card and withdraw money. But then the criminals have basically ratched up their crime to include kidnapping. Plus, the ATM has a camera that might catch the criminals standing near the kidnapped debit card holder.

Another technological change cutting crime: cell phones. People can call the police to summons help as soon as they see a crime being committed. So criminals are more likely to still be at a crime scene when police arrive. Also, a rising number of cell phones have cameras built in. So victims and witnesses to crimes are more likely to snap pictures of the criminals in action.

In the longer run it will become possible to wear a camera that transmits images of nearby people to a server that will do facial recognition and will be able to report when a criminal is anywhere near you. Criminal movements will be tracked in this manner. Also, more buildings and cars will have cameras on them to provide records of crimes.

Share |      By Randall Parker at 2011 January 09 11:05 PM  Economics Crime


Comments
Anonymous Coward said at January 10, 2011 3:09 AM:

From the "what they're thinking" dept.:

Most violent crime is the result of one person trying to take another person's property, whether it's an addict robbing a convenience store or one crafstman bartering with another, says Wright. If property isn't available to steal, the opportunities to commit crimes dwindle. At the same time, free trade, which relies on property at the ground level and drives a large portion of violent crime, withers. Sure, goods dealers can still transfer funds electronically, but only at high levels. Street dealers are unlikely to use credit card swipe machines anytime soon.
kurt9 said at January 10, 2011 8:56 AM:

Criminals have been known to force someone to go to an ATM with their card and withdraw money.

This is called express kidnapping in Mexico and Latin American countries. You are correct that this is not common in the U.S. because the cameras and competent (non corrupt) law enforcement make it easy to catch the perps.

CCW said at January 10, 2011 5:52 PM:

"Cashless Economy To Cut Crime?"

If only. We've got blacks and hispanics around. They commit crimes because that's the kind of animals they are.

AMac said at January 12, 2011 10:02 AM:

I recall reading (but haven't checked) that carjackings rose in the U.S. in parallel with the spreading use of car ignition systems that make hot-wiring much harder. E.g. keys with RFID tags, whose absence causes the car's computer to disable it.

The response of some street criminals was thus to move from car theft to carjacking.

Of course, I may be reciting an urban legend. However, a broader point is probably true -- while (1) making it harder to commit crimes lowers criminal behavior, at the same time (2) criminals adapt, both individually and on a systems basis.

I find it particularly unlikely that declining use of cash will lead to changes in illegal drug use in the U.S. There is a giant demand for all the common substances, addictive and not. And a willingness to pay large sums for them. And a gray-market/black-market/organized-crime system to receive payments and transfer them to middlemen and producers. I would expect waves of innovative new behaviors to accompany the declining use of cash, to accommodate the market's demand.

Mike said at January 12, 2011 5:20 PM:

Crime in the West basically peaked in the early 90s after increasing for about 25 years. The main reasons for the peak appear to be increased spending on policing, declining birth rates (most crime is committed by young males) and technological changes.

The reduced use of cash has probably helped, as have computer databases for criminal data. Burgarlies have also tended to go down because of the increasing cheapness of electronics, mountain bikes etc. The main things burglars target these days are expensive flat screen tvs, expensive racing bikes and apple laptops.

However, non of this is likely to deter junkees as their desperate need to get funds will override their concern with getting caught. Similarly, there is no evidence that supply of, or demand for illegal drugs is declining.

Randall Parker said at January 12, 2011 7:54 PM:

AMac,

Yes, it is also my understanding that better car security systems lead to carjacking. That leads to remote deactivation technology and GPS for tracking a stolen car.

I've read claims that cell phones decrease crime by reducing the time until a crime gets reported. The perps are less likely to get away before the police arrive and more likely to have pictures taken of them.

Mike,

Yes, criminals are harder pressed to find things worth stealing. I suspect a larger fraction of all wealth gets put into bigger houses and other unstealable stuff.

I'm wondering where this leads. Smarter criminals are doing crime online with stolen identities. But is the total value of stolen stuff going up or down as compared to the size of the economy?

Brent Lane said at January 14, 2011 7:29 AM:

Of course one must always consider the unintended consequences. Just as cash becoming less common leads to an increase in kidnapping, the increased ease of identifying criminals with technology will likely lead to criminals taking the added precaution of eliminating potential witnesses, i.e. more murders.

While the decrease in overall birth rates may have helped decrease the number of prospective violent young male criminals, it doesn't help that the greatest decrease in birth rates is amongst the demographics least likely to commit violent crimes.

Mike Kenny said at January 15, 2011 8:37 PM:

Similarly, panhandlers:

http://michaelkenny.blogspot.com/2009/12/debit-cards-kill-panhandlers.html


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