The costs of crime

Crime, of course, hurts the society, as the existence of crime increases individual risk and could potentially destroy the capitals that can create values for our society. In macroeconomics, there is a belief that stealing and robbery do not create negative impacts on the entire economy as long as the expenditure does not change in its whole. This is because the entire economy does not lose any capital from stealing and robbery and the money would merely be transferred from one person to another and then spent into the economy again. However, such belief ignores the side effect of stealing and robbery. The existence of stealing and robbery could change people's consumption attitudes, and the individual expenditures are different between when there is stealing and robbery and when there is no stealing or robbery. This is because of the first cost of crime I mentioned in the beginning. When there is stealing and robbery, individuals face the risk of losing incomes due to stealing and robbery. When individuals face greater risk or uncertainties, they tend to lower their expenditures on consumption; therefore, when there is stealing and robbery, the expenditures on consumption will be lower. It means when there is a high level of crime, the consumption level in the economy would be low. In addition, crimes would destroy the capitals that can create values for our society. Individuals could be potentially hurt by crimes when individuals suffer physical damage, their productivities would be affected as well as the values they create for the society would also be affected.

To conclude, crime does not only affect individuals but also affect the entire economy and the entire society as well.