If we've learned anything from the mortgage lending debacle over the past five years it's that white collar crime pays off huge! Thanks to technology, however, low-skill crime is paying off worse than ever. McArdle wonders what would-be criminals will do when there isn't much profitable crime available, and I think I have the answer: live off the social welfare system.
The teenagers who used to boost cars, however, won't simply segue into new forms of crime. Hacking a credit card network is a different skillset from hot-wiring a car; the person who does one can't necessarily transition easily to the other. The low-skilled young men who choose crime as an alternative to low-wage work may simply find themselves with fewer viable ways to make money through criminal activity. So what happens to them?
No, I am not about to argue that we need some sort of social program for poor displaced criminals who are no longer able to practice their beautiful ancient craft. I'll be very happy if a lot of major forms of crime are thwarted. Yet I'm also interested in the empirical effects that this will have.
One of the primary reasons that the welfare system is expanding (including all sorts of programs that aren't typically included in "welfare", such as Social Security disability and unemployment insurance) is that many workers, not just criminals, are being displaced by technology. There appears to be an emerging class of people who are permanently displaced by technology and cannot contribute any economic value, and society will inevitably morph to care for them. The question is what the care will look like, especially as the productive proportion of the population shrinks.