Continuing from our earlier blog article, Economic Theory and Illegal Immigration, it is again noted that according to many renown economists, is the notion that they believe in studying individual behavior to assess and draw conclusions for a group of people to be most effective in reducing crime.
Again most economic theory begins with the assumption that the best model of how the world works rests on the idea of [important] of a rational, self-interested individual who act with purpose to achieve the highest level of satisfaction possible knowing that they will be confronted with certain circumstances.
In most disciplines and/or professions define rationality as consistent thinking. However economists take a small but different approach. Economists define rationality as “choosing the option that one believes will increase his satisfaction the most when presented with a constrained choice.”
When one looks at the variance of definitions there is not that much whatsoever. In fact the only inferences that I am able to draw is that economists use “choice” whilst others use “certain circumstances.” Either way we have a definition of rationality from both stating it is consistent thinking. We do not have any difficulty with either’s definition.
What do these theories mean about self-interest? One thing that hit me straight up was in the notion that self-interest does not mean or even remotely equate to selfishness. In fact let all of us remember that the decision involves choice, rational thinking, and purpose to achieve gaining the greater satisfaction or improvement of life. It is important to note that this decision can come from buying a new shirt or by giving away the shirt off one’s back. Again it should be noted that in a market economy people act to improve their well-being, not necessarily their wealth or number of possessions.
If we assume that individuals are rational and self-interested, then we can think of a simple rule that will lead us to maximize our satisfaction/improvement given any option. That rule is to compare the added benefit from an action to what the added costs will be. If the added benefits exceed the added costs, then most often people will undertake the action.
Now back to the example of criminal activity. According to the economist’s, they would look at a criminal and say that if she commits a crime it is because she has made a rational choice. Essentially therefore, the person weighed the benefits from the crime against the added costs and determined that the added benefits of the crime outweighed the added costs and therefore, with purpose committed the crime. The practical implication of this concerning public policy is that if one wanted to reduce criminal activity, then one must reduce the benefits of committing the crime and one must increase the costs.
Now that is about as basic as it comes. It is just like saying if there is enough demand for something then people will just about find the costs. How anything as simple as this basic assumption could somehow go wrong is I believe something only humans are able to engineer.
Back to the criminal data assessment. We have mentioned that given the age characteristics as well as educational level, family status as children and adults, race, and of course psychological profiles all are characteristics of humankind; regardless, of having anything to do with crime. But if only for the moment I would like to introduce the rationale of why people do the things they do – or better still is as to what limits will people go to make themselves satisfied with their dispositions?
We can all agree that educational level can assist when time to look for a new position, right. So let us assume our newly paroled lady did not get the opportunity to finish high school. Ut oh! She is there filling out applications when to sudden the question comes up – have you ever been arrested, or convicted of a crime? Now there is an altogether set of circumstances. Most people might allude to the notion of “okay let’s see, we have a high school dropout that has done a short stint in the big house, what gives with that…”
Who stated anything about criminal activity being a rational choice? Tomorrow we will begin to look at policies, and what should we do with somewhere between 14 to 30 million illegal immigrants who were given choices and for some reason applied some economics theories without or even with rational thought.