Business Columns & Blogs

Virgin: Crime takes major toll on economy

The intangible costs of last Sunday’s murder of four Lakewood police officers amount to a huge but incalculable bill that family, friends, colleagues and the community will pay for years to come.

But there is also a very real, tangible economic cost to what happened Sunday, and not just in the money spent in the investigation of the crimes and the search for the killer.

In its own way that bill is just as immense and, although it involves actual dollars rather than emotional toll, just as difficult to tally.

One of the least understood facets of the American economy is the drag put upon it by spending to prevent, or deal with the effects of, crime.

Consider the billions spent in direct costs of government, at the local, regional, state and federal levels, for police officers, courts, jails and prisons, and other offices dealing with crime.

Consider the billions spent in the private sector for security measures and monitoring systems to prevent loss – and the billions spent to repair or replace what was lost to crime.

The bill just keeps going up. For every new communications technology there’s a criminal enterprise – or thousands – associated with it, and more costs and inconvenience stemming from the efforts to thwart it. You want a computer network that allows you near-instantaneous worldwide access to commerce? Great! Now society’s vermin have a near-instantaneous, worldwide means of cleaning out your account and ruining your credit without going to the bother of holding up a bank branch.

At first glance it might appear that crime prevention is a jobs generator. It takes a lot of people to staff police departments, courts and prison systems. The money spent on crime prevention generates jobs for those who, for example, make, install and monitor alarm systems.

But that is unproductive spending, whether you’re talking about the individual business owner who attaches special tags to merchandise to thwart shoplifting or you’re looking at the macroeconomic system where we tally up all the expenditures associated with crime.

Does an alarm system really improve the quality of your life or make you wealthier? No. It may provide a tiny sense of psychological security by allowing you to protect what you’ve already got, but that’s trying to prevent your existence from becoming more miserable, not actually making it more pleasant.

Does spending on law enforcement, criminal justice and private-sector security measures add to the nation’s economic wealth or productivity? Not really. That’s money we could be spending on things that do improve our individual lives or the nation’s economy. It’s also money that we could be spending on those things we enjoy doing (does anyone get enjoyment out of paying the bill for an alarm system?). It’s money that we could choose not to spend at all and just pocket for later.

So why do we spend what we do to ward off crime? Because we have the sense – as personal history as well as news accounts remind us – that if we didn’t spend what we do, the resulting bill for crime’s effects would be much worse than it already is.

Are we spending too much on crime? Maybe we’re not spending enough. That will be an issue for debate in the coming months as cities, counties and state government, including here in Washington, figure out how to plug the budgetary holes through which oceans of red ink are pouring (after the events of the past week, you won’t find a lot of advocates for reducing spending by reducing the prison population).

We may have numbed ourselves to the accumulated cost of the thousands of small outrages that occur every day, many of which are shrugged off with a resigned attitude of “it happens.” The attack last Sunday on four police officers directly involved in trying to see that crime big and small doesn’t just “happen” is a jolting reminder of just how much poorer, literally and figuratively, crime is making us.

Bill Virgin’s column on business and economics appears Sundays in The News Tribune. He is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at