Wednesday, August 18, 2010

Crime and Insurrection: Local Economics, part 1

Credit: AP, via UK's Independent
When I read law enforcement blogs, I frequently come across writers who are convinced that civil conflict has started or is on its way. They don't mean a bad Friday night, either. They frequently see the destruction of civil society as a permanent or lasting problem, close to or past the tipping point to insurrection.

This is hard for many of us to reconcile in other neighborhoods. And as a nation, we don't seem to be at that point. Look at Iraq: just yesterday, a suicide bomber blew himself up along with 61 Army recruits. Perhaps we could look at Hemet, California, or Chicago, Illinois, and see equally deadly, unpredictable, and fatal or potentially-fatal results for law enforcement. Places where terrorist attempts or local violence has escalated to mean that local authority has no sway.

Customary Expectations
Nevertheless, even in Hemet and Chicago, most people have an expectation that they will be able to buy groceries from their desired list instead of whatever's available. They expect to be able to drive there without too much chaos, complain about gas prices but still be able to obtain some from a safe device, complete their shopping, and go back home without incident. Odds are highly favorable that this set of actions will occur as predicted. This is not the case in Baghdad. Baghdad has civil conflict. They have war.

The United States is not at war with itself. But something is up, and it is a crisis for us as a society. It's past time to examine what these law enforcement professionals are telling us. It's important to relate their real-life, anecdotal, experiential accounts to a discipline and study instead of a platform or set of platitudes such as "tough on crime" or even "soft on crime".

This post compares the economic predispositions toward civil war, as studied by international political economy, applied to our own international, local, political economy. (Footnotes below).

Paul Collier  on Economic Drivers of Civil Conflict
Earlier I posted twice on Paul Collier's work. He asserts that civil conflict has consistent economic features. Here are the high points:

A. Economists view civil conflict as crime, since it
1. is against the law and
2. causes the destruction or seizure of capital assets (reorganizing ownership).

For those of you who aren't used to this way of looking at it: when an army invades: they take your factory or trample your crops. They loot your house, eat or waste your food, kill your sons and carry off your daughters. These are property crimes and crimes against persons.

When your car stereo is stolen, and somebody fences it, it changes something for you--but not on the same Scale. Likewise, if your son is murdered for his watch or your daughter brutalized, these are horrible, life-changing tragedies. But they are still not war, because in general they are Exceptions to the local Majority experience. There is still someplace to go (the police, a minister, a counselor) in your milieu. It is still, terrible as it is, on a lesser scale.

 Yet if you take these crimes against property and even persons as an economic event, you will see that they have reorganized ownership. They took a watch, a car stereo, a life that did not belong to them. They disposed of it as they saw fit. Add all these up in aggregate--a car stereo, a watch, lost human capital--lost wages as well as a lost life. Pretty soon you're talking about a lot of reorganized wealth.

And when that reorganization and violence become Customary, or the Majority experience under local conditions, with little or no recourse, it begins to approach the conditions of War.

B. Three economic features drive civil conflict. They are:
1. Nation trades in one (or few) commodities, and does not produce what it needs to live. It must trade for those goods. Or put it another way: the economy is unvaried. It has one main industry, and everything else supports it. consider a mining town, for instance, with a few stores that all live on mine owner purchases and mine worker wages.

2.Low national income.

3. The "revolutionaries" have the means to fund revolt, (through appropriation/theft of national commodity, remittances or donations from elsewhere, and / or illegal activities such as piracy, kidnapping, or extortion.

C. The economic causes of civil war will be cloaked in public relations, the language of grievance and protest.
--I won't get to this one today.

Macro versus Micro
In aggregate, this country is huge, with plenty of resources. On the local level, in many inner cities or poverty enclaves (condition # 2), these conditions do apply. These are what police bloggers are informally calling "war zones." There is little industry: chain restaurants, a few drug stores, some bottle-and-sandwich outlets. If you need to buy a shower curtain or a decent frying pan, you must go elsewhere. Same with services: no dry cleaner, few auto repair shops, pawn shops that lock down like jails and maybe a hardware store. Joblessness is high--if you count legitimate jobs especially.

Illegitimate jobs
There are two kinds of illegitimate jobs. One is to do honest work (car repair, house-cleaning, house-painting, plumbing, whiskey distillation, clothing import/export by the suitcase-load, etc etc) without benefit of a license or payment into the government's tax regime (of which licenses and permits are a part). The other is to engage in illegitimate work that is in itself a crime (selling drugs, pimping, kidnapping for ransom, and so forth).

The former is a drag on the tax system--just ask Former Soviet states, where a good part of the challenge of building the economy is to get it on an official standing. But again, this is a matter of scale. We forget that most business in the U.S. grew under a lack of licensing and permitting by the state. Just as an example, stagecoach stations had horses, carriages, guns, food and sometimes beds--but also no standards for animal care, stagecoach repair, marksmanship, sanitary food or sheets on the beds. Conditions were frequently appalling. Yet they were integral to continental transit. They hired people. Poverty does not grow into a middle class unless some barriers to entry are low.

In the unofficial economy, many services are bartered or run on a goodwill system--untaxable already. And it's not optimal, according to our contemporary standards. A renegade auto mechanic is not disposing of oil properly (I'm betting). He's not paying taxes or attending classes that certify his understanding of computer chips in cars. A woman who sells home cooking without a food license has not taken food handler classes (these cost $500 to $1000 per person, are only offered occasionally, and do not automatically net you the license, which is another fee).  On the other hand, the mechanic and the cook are not unemployed. They are entrepreneurs, building a local economy that inner cities would otherwise not have. Their industry is also very precarious.

Illegal Markets
For the United States, the real challenge is the second category of illegal work. In a way, the unofficial-legal economy is part of the good in a poor neighborhood. They make up a sector of productive economy. They keep normal life running in a location with few official goods and services.

In contrast to the unofficial-illegal economy, the criminal market is running on one class of industry--that in illegal drugs. Other sorts of crime are lucrative, but the various drug markets constitute the overwhelming percentage of dollars earned and numbers employed. The other crimes have become externalities to drug markets, or a source of capital for entering the drug market in a bigger way.

The world market for illegal drugs is hard to get a dollar feel for, because it is unofficial. But figures from the United Nations Office of Drugs and Crime estimated USD 110 billion yearly ten years ago. When I checked the Worldometer at the time of this writing, the total they estimate so far this year world-wide is 251 billion and counting. This is, for a poor neighborhood, the only rapid-growth industry. It dominates economic activity and  ensures that Collier's condition # 1 is met in full--a one-note, unvarying economy. Because it leads to other crime, it creates barriers to entry for other, more varied industry, goods, and services. It also looks like the only real-money profession around.

The third condition of civil conflict is that there is money to spend on it--that there is funding. The funding in the "unofficial war zones" that law enforcement continually faces comes from a variety of sources. There is, when you add it all up, plenty of money to be found.

1. Illegal drug sales.
2. Prostitution
3. Property crimes
4. Extortion from other criminals, such as the "street tax" collected by the Mexican Mafia.
5. Public assistance
6. Wages diverted from other wage-earners (e.g., "borrowing" from someone who has a job).

I have more to say on this issue, and to drag other economic findings in. The point I would like to leave with today is that civil conflict does appear to be a huge problem in the United States in growing areas. We are not at war with ourselves in the grand picture. Yet in almost every city we have microclimates that contain the economic elements required for violent civil conflict on a large scale. And because of the money involved, these microcosms are connecting to each other. They are growing in area. At what point could this growth in area, population, and local risk constitute a threat to national integrity?

I am not advocating that everyone buy a bunker and a machine gun. It would be better if we looked at these conditions and made some assessments. Then we can lower the risk of civil conflict and re-introduce conditions conducive to law and order.

I'm going to gather some supporting posts from police officers who blog and collect them here.

I will talk about drug markets more fully, using Levitt and Ventakesh, a few others. This set of thoughts will grow and be extend my Crime, Economics, and Cities series. Also, I want to spend some time on the language of grievance, on the organization/coalitions necessary for civil conflict to organize.

Just food for thought.

Second City Cop for Chicago's out-of-control crime. A recent post.
Hemet California PD's troubles at Ann T. Hathaway
Click on the Worldometer to see the estimated total U.S. Dollars spent on illegal drugs worldwide this year. When I checked, it was $251 billion.
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Bob G. said...

I'll be honest with you (like I always am)...
I DO see this coming, and I hope to God I'm WRONG.

While I wouldn't define this as an insurrection (per se), I WOULD call it a definite form of anarchy.

I would concure that the crimes perpetrated against either property OR person in OUR cities is not "war", but it very much seems like some sort of "insurgency" by rival factions, or urban cadres.

In other words...CRIME PAYS...and pretty damn well (these days).

I love the way you tie these crimes into the economic impact within a city (reorganized ownership...brilliant).

This is never as evident as the fact that in the WORST quadrant (for crime) of MY city -our quadrant-, we have the SECOND HIGHEST amount of BUYING POWER aka "disposable income".

Not bad for so many people on welfare...or using criminal activities to "pad their bankroll", as it were.
And yet the houses look like crap, the lawns unkept, and social breakdowns that portray much of the populace as nothing short of wild animals.

What I notice, is that there is a profound misplacement of normal societal PRIORITIES.
Got that big screen TV..or those fancy RIMS, but the kids are on a FREE-LUNCH program...

As to America's productivity...that's hard to call.
We used to be SO damned industrialized, but went to an "information-gathering" society as far back as the 1970s.
Then we seem to have gotten out of that.
What we do now (as a nation)...I have NO real idea.
ANd neither does our government, it appears.

We used to call problem areas THE BADLANDS...same as a war zone, but less formal in nomenclature.
Had more of a "wild west" aspect.

One huge part of ANY form of civil conflict in urban areas is the various forms of INTMIDATION that are the first signs that things are going "south".
It's only exacerbated when little get done by the local government as far as intervention.
Having a lack of community involvment (church, civic, etc) speeds this process up in NO small way.

I'd get me that bunker AND machine gun, but I need TWO things first:
1) A city variance for my property
2) A class III license to own a full-auto weapon.

Either way, I'm barking up the wrong tree.
The city won't even let me dig my damn MOAT...LOL!

Excellent post...

Extremely well thought out AND presented.


(can't wait for the next installment)

Ann T. said...

Dear Bob,
I keep reading about the wildings and shootings in Chicago with more and more horror. There the conditions of anarchy are taking on new strength because the police departments are so under strength. According to some reports, the midnight shift is One Man in One Car in a precinct.

And I am sure this happens elsewhere.

I am glad you enjoyed the post! As for your moat--I still want you to have it!

I have a ton of things to talk about and look up. That's why it's going to be a series! An I'm looking forward to getting your feedback!


BobKat said...

Ann T...

Very Welcome Post! One I can sink my cannabinoid teeth into... although you may cringe at the thought!

It will take me several readings to understand fully your deeper meaning here... you are deep.

RE: Civil War... the war you speak of may or may not happen, but if it does it won't be because of "drugs"... that war has been going on already for several decades with millions of victims. In addition, law enforcement is expected to spend precious time and money on that war... when they could be protecting citizens and solving real crimes like missing/endangered persons, child abuse, domestic violence - much of which involves alcohol.

"Drugs" are a mainstay of the media... the many thousands dead due to drug violence in Mexico is front-page material. On my blog I have posted references to present the simple fact, law enforcement depends upon "drug interdiction money"... the depend on the drug war.

Problem is... "the war on drugs" is a war based on anecdotal reason and law... and attempts by US citizens to promote sane laws are either laughed at by govt, or ignored. Another problem is, despite the victims who use legal drugs like alcohol and tobacco, the latter backed by rock-solid evidence, the drugs considered illegal are all mixed together, as if they were one drug. The consequence is that "safe herbal drugs" such as cannabis are equal to heroin addiction. In doing so cannabis which is far safer than alcohol, tobacco, or heroin, is demonized.

Users are targeted in our society, and all efforts to modernize our understanding of cannabis are ignored. The thousands of deaths in mexico are naturally blamed on the US lust for drugs... but the truth is... people aren't stupid, and the people want what's safe(r)...

The First Amendment to the Bill of Rights and the US Constitution is in part:
"Congress shall make no law... to (prohibit the people's right to) petition the Government for a redress of grievances."

We have tried, and last response from the Obama Administration was to chuckle at cannabis rights advocates to legalize a safe, natural plant.

This will not cause a civil war however. What might, is Wall street gets richer after screwing the American public, and Main and 2nd street getting shafted; oil companies with little oversight and a disaster that will haunt us for several generations; continued civil rights violations and discrimination that is in a gray area of enforcement; and politics that is not representative of the people.

Yes, there is a general belief that that civil war is near, a collapse of our nation; but drugs really is an issue that government chooses not to address, and the real reason civil war is an issue in the populace is more related to a failure of government to address the real issues that threaten our country.

All great civilizations fail at some point... mostly due to inflation... the inability to provide. With all the money we spend on drug interdiction, if most of it was used to promote our environment, solve criminal cases of victims, and promote rational policy, I think we would be okay for another thousand years. But the fact is, everyone knows, or should know, ours may be a freer country than many, but we're not really free. And that's the fodder for anarchists... exploit what Americans feel threatened by, and that is getting screwed by big business, government policies that make no sense, and trampling on our freedom and infringement on personal rights...

the "drug problem" is huge, but it's, in my opinion, a RED HERRING.

BobKat said...

I tried leaving a comment... I appears it was too large... but we'll see... in the past it posts despite the error... I only spent the last hour writing it, so "no great loss, lol".

Good topic Ann T. One I can sink my "cannabinoid teeth" into... and I will.

Of course I didn't do a print-screen!

My point was, "drugs" won't be the catalyst for a civil war... that's a red herring. We have much more critical issues that pot culture, which makes up the majority of disgruntled Americans, as far as they are dumped in the illicit drug issue and shouldn't be when considering the harmful legal alternatives.

No, any civil war, if it happens will be a result of other less "important" issues, like the Gulf oil spill, political corruption, human rights abuse, civil rights abuse, etc...

Thanks... for a tantalizing topic!!!

BobKat said...

I was right, my comment that generated an error was posted.

One clarification... in the longer of my coments, I wrote:

Yes, there is a general belief that that civil war is near, a collapse of our nation; but drugs really is an issue that government chooses not to address, and the real reason civil war is an issue in the populace is more related to a failure of government to address the real issues that threaten our country.

The government chooses to not address it by continued lack of science, psychology, and obvious evidence that when you make "a War on Something"... define your enemy.

In America.... I'd guess 3/4 of our society has used cannabis at least once. Compare that to the number of persons that go over the speed limit on our roads with 2 ton + motor vehicles, or those that talk on cell-phones while filling their gas tanks at the gas station... I might just as well smoke a cigarette...

Fact is... as long as you act responsibly... smoke a joint at home, it should be legal. Talk on a cell pumping gas - a felony! Same as driving impaired.

Need to get real with laws and personal rights.

Off my soap-box...

Thanks agin Ann T.

Christopher said...

You ask, "At what point could this growth in area, population, and local risk constitute a threat to national integrity?"

I believe we have exceeded that point, especially if the definition of national integrity is broadened to include the negative impact on our educational system, health care system, law enforcement agencies, and social welfare systems.


That said, I spent the day in the Chicago Loop and Navy Pier today. While as an off-duty officer I was armed, there was really no need. The Gold Coast is as safe a place as downtown Ann Arbor, Michigan on a Sunday night. As long as the civil unrest is kept to poor black and Hispanic neighborhoods, the social cost and affect on our national integrity will be ignored by the rest of the population at large. Until, of course, it becomes so large it bleeds over into our lives, and which point it will be both monumentaly important, and too late, all at the same time.

Ann T. said...

Dear BobKat,
I fear we are never going to totally agree on the subject of legalized drugs.

The drug market is usually divided by the UN into four categories: cannabis, opium/heroin, cocaine, and methamphetamines/other chemically-produced. And I think it may be more accurate sometimes to divide them up. Many times their source nations are different, their chemicals are different.

In aggregate though, these use the same distribution/financing systems world-wide for all of them. Maybe not in the local neighborhood, but in general.

The size of the illegal market is predicated upon demand. The demand is huge-the will of the people, perhaps. It is also compromising the governments of the supplier and transit countries. These include Pakistan, Afghanistan, Tajikistan, Kyrgyzstan, Mexico, Colombia, and parts of Russia such as Dagestan, and on and on.

The drug market is only one of those with which states must contend. As long as markets are bigger than governments, governments will have a hard time. You mention oil--that's a market that has seriously impacted the governments of Azerbaijan, (for the better) and Nigeria (for the worse), and on and on.

Anyway, I think the size of the market here has led to seriously wrong externalities. My goal is not so much to talk about the products of that market but about how cities and their populations are going to handle these frightening externalities.

Thanks for writing in,
Ann T.

Ann T. said...

Dear Christopher,
I am really happy to get a local report on Chicago. Reading SSC is good, but it aggregates a lot of experiences--and lately has been scaring the hell; out of me!

I am also happy to get an assessment on national security. This is also what I believe--the schools, the medical, public assistance and law enforcement are all under siege, undermanned, with a never-ending list of things to do.

The state's purpose is to displace anarchy to the border--and hopefully not too much of it there! Then internally, create opportunities for wealth creation in an orderly fashion. I do think that means schools, and some social net in re illness, wellness, and a safety net for certain misfortunes.

Right now the state isn't able to do all of these. It is hurting us no end. And particularly teachers, E.R./medic staff, and of course Law Enforcement.

Thanks for sharing my concern and giving your take. I do appreciate you writing in! You are one of my barometers!

Ann T.

Christopher said...

SCC is a great source of information, and he paints an accurate picture of Chicago, but as I alluded to, it's confined to Englewood and like neighborhoods... where poverty is norm and crime is king. Tourists could visit Chicago and never know that just a few blocks over anarchy is in place and their odds would be just as good in Baghdad. What scares me is the general populations' apathy to what is taking place a few blocks over. It may as well be taking place in Baghdad, for as much concern is shown.

So come visit Chi-town anytime. We'll walk Navy Pier and pay exhorbinant prices for a hot dog and diet pepsi and then burn off the calories by taking a stroll down the Mag Mile in perfect safety. Maybe whip out the American Express in the Macy's everyone still calls Marshall Fields.

We'll have a great time. But it'll still be a broken city seething just beyond the regentrification, kind of symbolic of what's happening on a national level.

BobKat said...

Dear Ann T.

I have no expectation that we ever agree... just that we are open-minded on the subject.

You commented, and I didn't know this:

"The drug market is usually divided by the UN into four categories: cannabis, opium/heroin, cocaine, and methamphetamines/other chemically-produced."

That is most interesting.

My point, is look at what it cost this country to attempt to prohibit alcohol, now consider the profits and benefit of those sales and taxes to our economy. Given your UN division, it further compels me to ask, what is the cost to this country in prohibiting cannabis, in making it out to be as dangerous, if not more so, but our current drug policies?

The benefit of legalizing cannabis, in addition to the current legalization of alcohol and tobacco, given the boost in the economy, and tax revenue, we could accomplish far more in providing public safety, and by most studies, if people chose to switch from tobacco and alcohol (the latter for those who abuse it), we would, in my opinion be a healthier nation.

Many may not realize that alcohol did not end because the government found it was safe, or the violence too great, but rather, it was legalized literally because the government was broke, and needed the taxes.

With numerous studies indicating cannabis is safer than alcohol, it is a win-win to legalize it and revitalize our country... which is in serious need of new jobs, taxes, money.

As for those other categories of drugs, I see no benefit, nor support legalization, but I do think we need to reconsider whether the current policy is working to reduce harm to individuals and our society.

I really hope I'm not offending you with my opinions and my truth... I only wish to communicate and share my insight, knowledge, and experience.

My goal is for a healthy society!

The Observer said...

Ann T:
I read all the comments, and of course, your post.

I think if there is unrest, it will start in those isolated enclaves of poverty of education, legitimate economic opportunity, and grievances against perceived injustice by the larger culture. Then it will spread.

That will be ugly.

These are the same areas where violent crime occurs now, and is unappreciated and or minimized by the larger community. There are sometimes racial overtones to this, as when commenters to blogs write things like, "N____ killing n_____; no big deal." (Not a direct quote, but I've seen similar.)

I think it is time to work on this murder rate and appreciate this mayhem for what it is--a warning shot.

Great post! The Observer

Ann T. said...

Dear Christopher,
I would LOVE to come to Chicago and see all those things! I would also like to see Englewood . . .

Once I took a trip to Pratt Institute in NY and ended up in a dangerous neighborhood--I was looking around and said, "This looks like Bed-Stuy, kind of like the Spike Lee movies". A very bling man who had been eying me like a fish informed me that it WAS Bed-Stuy.

I said thank you very much.

Ann T.

Ann T. said...

Dear The Observer,
You anticipated my next post. I think these enclaves will indeed or are already in a state of anarchy. It doesn't require the entire population of those enclaves to be anarchic, only that they carry the day.

Then they spread, and more people live under anarchic conditions.

I had a taste of it, in Rivertown, at night you could not be safe. You were a prisoner in your home. Yet I was not near drug central. Just the fringe.

Thanks for reading so carefully! What a wonderful compliment.

Ann T.