Matthew Yglesias has this excerpt from an actual scholarly book on dropping crime rates:
When committing crime, the agent’s efforts are subject to diminishing returns, which arise because moral hazard prevents criminals from reaping the benefits of specialization and division of labor that are available to other sectors of the economy. This is essentially a problem of poorly defined property rights. In an environment that lacks legal recourse for disputes, criminals face limits on how much hired help they can profitably employ. The possibility of employee theft, the costliness of extralegal means of preventing it, and the possibility that an employee might provide incriminating evidence to authorities, all limit the size of criminal “firms” and with it criminals’ ability to achieve the scale economies available to legal enterprise.
With all those obstacles, it’s a wonder that drug kingpins can afford a decent car, let alone any bling bling.
