Business Columns & Blogs

You know about some costs of crime. Worry about the bigger, hidden ones

Among the many unhappy repercussions of Tuesday’s attack on cyclists and pedestrians in New York are the hidden costs of crimes like it.
Among the many unhappy repercussions of Tuesday’s attack on cyclists and pedestrians in New York are the hidden costs of crimes like it. AP

Boeing makes commercial passenger jets to take us on trips for business, vacation or family matters. Home Depot rents trucks to customers to make it easier to move big, heavy items. Fertilizer companies make chemicals to aid production of the food we eat.

Those products and services were never intended to be used as weapons.

But that’s what happened in Oklahoma City in 1995, on 9/11 in 2001 and last week in New York — and could well happen again.

Among the many unhappy repercussions of the attack on cyclists and pedestrians in Manhattan is this: Businesses will have one more layer of liability to worry about, consumers and customers will have one more threat to consider and more hassles and inconvenience, even if nothing happens, and the economy will have the increased drag of non-productive costs to carry.

The cost of crime is a huge but under-appreciated economic burden. Crime might create business opportunities for some — the makers and sellers of security systems and products, for example — but the money individuals and businesses spend to deter theft could have been spent on product development, or more efficient machinery, or an expanded building.

The billions to be spent on cybersecurity is necessary and will provide jobs and terrific economic opportunity for some, but they do not create wealth or build a better life; they merely hope to preserve what we’ve got and prevent life from becoming worse.

About the best economic tradeoff buyers of security products and services can hope for is that losses to crime would have exceeded the cost of such preventative measures had they not been used.

This isn’t new for business, or the economy, of course. The problem of the cost of crime has been around as long as there’s been something someone else wanted to steal.

Nor is the issue of liability for use of their products and services an unfamiliar topic for business owners and operators. They’ve long had to be concerned about the consequences of poorly designed or made products that fail, or the harm caused by someone who is improperly using the product, however unintentionally.

Even the intentional misuse of a product, service or technology in the pursuit of theft isn’t exactly a recent development.

In the week this column was written, the columnist’s phone has been ringing regularly with calls from “computer security centers” offering to “fix” problems. The email spam filter fills daily with an Augean stables’ worth of scams and phishing expeditions. The telephone, the computer, even the internet are not new.

But the use of a company’s product or service to wreak not property crime but physical harm adds an entirely new dimension to the problem.

“As an airplane designer, in my wildest dreams I never thought that a commercial airplane would be used as a weapon,” former Boeing and Ford executive Alan Mulally once told an interviewer. But that is the reality we live in, and business owners and operators need to be aware of it.

Want to develop a new product? Now you’ve got to worry not only about those who don’t read the manual or don’t have the skills to use it safely, you’ve also got to consider what sort of mayhem might be created by the deliberate weaponization of it.

That’s just the start of it. The New York attack of last week, as bad as it was, could have been far worse had the perpetrator targeted a large concentration of people — such as a Halloween parade scheduled later the same day.

Community organizations and businesses regularly stage events that draw lots of people. Security has long been an agenda item on the planning list for those events. For many, it moves to the top.

That will carry effects and consequences for everyone. There will be more paperwork. There will be more inconveniences, as anyone standing in a line to get into a concert, a sporting event or to an airport gate can attest.

There will be decisions made to forego or withdraw some products, services and events as not worth the risk. There might even be a law or regulation or two, although the likelihood of an individual intent on committing a malevolent act being deterred by that is negligible.

And there will be more cost. You’ll never get an itemized bill for it. You might not even notice it, since it’s broken up in minuscule bites of every financial transaction you partake of.

But you’re paying it, and so is your economy — and the bill is getting bigger.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

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