Academic

Curry & Mongrain on Gangs

By Lawrence Solum

Philip A. Curry and Steeve Mongrain (Simon Fraser University) have posted What is a Gang and Why Does the Law Care? on SSRN.  Here is the abstract:

The economic theory of optimal punishments states that the expected penalty for a crime ought to be equal (or at least proportional) to the social harm caused by the act. The Criminal Codes in both Canada and the United States allow for criminals to be penalized to a greater degree if they are a member of a gang. According to the economic theory, this would be optimal if either: 1) the social harm from a criminal act is greater for a gang member than for an independent criminal, or 2) the probability of conviction is lower for a gang member. We examine the extent to which both of these possibilities are true and use the findings to develop a (perhaps improved) definition of a gang.

And from the paper:

Of course, involvement in the drug and sex trades are not the only crimes that gangs commit. Monopoly power in these markets is often enforced through violence (usually against members of other gangs, although innocent bystanders may also be victims), and gangs may also engage in extortion, human trafficking, and other crimes against the population. Note that if gangs are subjected to higher penalties because they cause greater social harm, it must be on a per act basis, not because they engage in these activities to a greater degree.14 Why should there be greater social harm if a gang commits extortion as compared to the same crime committed by an individual? The answer may actually be that there is more harm per act because gangs are better organized in their attempts to commit crimes.

The key to this insight lies in a proper definition of the harm caused by a criminal act. Note that the social harm must be greater than the loss to the victim. If it were equal, then the theft of money would have benefits to the criminal equal to the harm to the victim (assuming risk neutrality), and there would be no reason to punish the act. The reason that the social harm is greater than the loss itself is because the threat of crime causes individuals to take precautions to avoid being victims. Such precautions could involve monetary expenditures, such as the purchase of alarm system, or they could involve changes to one?s lifestyle, such as avoiding certain parts of town.

I thought this paper was quite interesting & recommend it.  But I cannot help noting the radical implausibility of the assertions in the underlined passage--which might (if repeated in another context) be criticized as an unfair charactature of the economic analysis of crime.  But the main topic of the paper--the legal definition of gang--leads the authors to the main point of the article:

[W]e propose that the definition of a gang be linked to the presence of monopoly power.

Of course, this begs the question of how to demonstrate the existence of monopoly power. In the case of a market for an illegal good, such as drugs, a crude measure would be price. However, since price actually seems to be fixed while quality varies, quality (or a price to quality ratio) would then be the measure.

In a more metaphorical market for crime, where the gang is exercising monopoly power over the commission of breaking and entering, for example, such measures would not be feasible. However, as mentioned above, a key component to enforcing monopoly power is violence. If testimonials of violence disproportionate to the stakes can be found (such as killing or seriously injuring another dealer who happened to be in the same area), then this would be an indication of the exertion of monopoly power. In the cases of Clarence Heatley and the Hells Angels described above, examples of intimidation were not hard to produce.

Full post as published by Legal Theory Blog on October 23, 2008 (boomark / email).