Economics of crime

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As a young police officer, I would often wonder as to why dacoits committed dacoities. The activity was fraught with danger, including that of death in a police encounter. The life that they led was far from cozy. What struck me most was the fact that the victims lost in lakhs, but the dacoits gained only in thousands. The obvious question was, “Where did the balance go? Who are the beneficiaries of the major part of the loot?”

When I looked around, I discovered that a large number of white-collared gentries in the district town as well some respectable in the villages, had property and lifestyle that couldn’t match their ostensible source of income. My sources told me that these are the people who carry away the balance I was in search of.

This was my first encounter with the fact that assets could be produced without producing goods and services. These people couldn’t be prosecuted under the laws of our land.

Such was the illegally gotten wealth accumulated by the white-collared criminals against whom we found it difficult to gather evidence. We, as policemen, were tasked to protect these properties against predators. We were not supposed to question how the property gets access into the big palatial houses in cities and towns but had to protect the same illegally gotten wealth stored in these houses. Apparently the police had to work as a “valve”.

As I started climbing up the ladder, I was faced with white collared crimes of many hues, most importantly corruption. This society is littered with “smart and corrupt” people who make money on the sly. They do not contribute to the wealth-creating activity permitted by economics, namely goods and services, yet produce wealth.

One can imagine this as a leak in the channels of revenue collection on one end and a similar leak in development expenditure due to rampant merciless corruption. Both these leaks create a huge torrent of “black money”, which can be seen as a parallel state that gets created at the cost of the legal constitutional state.

To top it all, I would regret my role as a police officer who has been assigned the job of protecting the same illegally gotten wealth, which was some time ago a subject of another crime. I, as a policeman, never bothered to check this, saying it’s a white collared crime; some other agency will look after it. Such an argument is essentially a fake excuse for inaction.

We are a country with a peculiar social trait rarely found anywhere else. Those who are “educated”, do not do any work with their own limbs apart from maybe feeding themselves. Those who do physical work are not called “educated”.

In a sense, these two groups are mutually exclusive. The educated group essentially behaves as clerks. Bereft of all contact with reality, they just write erudite essays in files and on note sheets, the majority of which is a cut and paste. There is nothing original about those so-called “ideas”.

This class is the most highly paid. Review the definition of GDP and you will be convinced that the output of this highest-paid class, contributes the least to GDP of the nation. Even when it comes to the purchase of retail items from the market as a contribution to the GDP, this highly paid class has almost everything paid for either legally or otherwise. The complementary class who is uneducated and does the physical work produces goods and services, thereby contributing to GDP.

Over and above all this lies the burden of corrupt practices. The end result is the creation of wealth without going through the mandatory dynamics of goods and services.Hail the poor economics of this country!

* The writer is former Bihar Director General of Police

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