Economics on Trial OCTOBER 1999

Chicago Gun Show
by Mark Skousen

"According to the economic approach, criminals, like everyone else, respond to incentives." -GARY BECKER(1)

The Chicago boys are at it again. This time the economists at the University of Chicago are making headlines in today's hotly disputed debate about gun control. Milton Friedman set the general standard a generation ago by insisting on rigorous empirical work to support sound (though often unpopular) theory and policy. More recently, Gary Becker extended Chicago-style economic analysis into contemporary social problems such as education, marriage, discrimination, professional sports, and crime.

Now John R. Lott, Jr., until recently the John M. Olin Law and Economics Fellow at Chicago, is making the case that a well-armed citizenry discourages violent crime. Lott analyzed the FBI's massive yearly crime statistics for all 3,054 U.S. counties over 18 years, the largest national surveys on gun ownership, and state police documents on illegal gun use. His surprising conclusions, published in his recent book, More Guns, Less Crime:

• States now experiencing the largest drop in crime are also the ones with the fastest-growing rates of gun ownership.
• The Brady five-day waiting period, gun buy-back programs, and background checks have little or no impact on crime reduction.
• States that have recently allowed concealed weapon permits have witnessed signif- icant reductions in violent crime.
• Guns are used on average five times more frequently in self-defense than in committing a crime.(2)

According to Lott, recent legislative efforts to restrict gun ownership may actually keep many law-abiding citizens from protecting themselves from attack. (There's that Law of Unintended Consequences again.)

The Incentive Principle Underlining

Lott's findings is a basic eco- nomic concept, the law of demand: If the price of a commodity goes up, people use less of it. In the case of criminal activity, if the cost and risk of committing a crime rises, less crime will be committed. This is often referred to as the market's incentive principle.

Gary Becker has showed that increasing the cost of crime through stiffer jail sentences, quicker trials, and higher conviction rates effectively reduces the number of criminals who rob, steal, or rape.(3)

Similarly, Lott argues that state laws permitting concealed handguns deter crime. "When guns are concealed, criminals are unable to tell whether the victim is armed before striking, which raises the risk to criminals." (4) He produces a variety of statistics and graphs to support his case. For example, the following graph compares the average number of violent crimes in states before and after the adoption of a concealed-handgun law.

Lott's crime figures also remind me of Frederic Bastiat's brilliant essay "What Is Seen and What Is Not Seen." In 1850, this great French journalist wrote, "In the economic sphere,. . . a law produces not only one effect, but a series of effects. Of these effects, the first . . . is seen. The other effects emerge only subsequently; they are not seen."(5)

According to Lott, Bastiat's principle applies in crime statistics. "Many defensive uses [of guns] are never reported to the police."(6) Lott gives two reasons. First, in many cases of self-defense, a handgun is simply brandished, the assailant backs off, and no one is harmed. Second, in states that have stringent gun laws, cit- izens who use a gun for protection fail to report the incident for fear of being arrested by the police for illegal use of a weapon. Thus, Lott confirms (through extensive surveys) the initial work of Gary Kleck, professor of criminal justice at Florida State University, that guns are used far more frequently in self-defense than in committing crimes. Kleck, by the way, used to have a strong anti-gun bias until he uncovered this revealing statistic.

All this confirms a long-standing constitutional principle: People have the right to own a gun for self-protection.

1. Gary S. Becker and Guity Nashat Becker, The Economics of Life (New York: McGraw-Hill, 1997), p. 143.
2. John R. Lott, Jr., More Guns, Less Crime (University of Chica- go Press, 1998).
3. Becker and Becker, p. 137.
4. Lott, p. 5.
5. Frederic Bastiat, "What Is Seen and What Is Not Seen," Selected Essays on Political Economy (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1995 [1850]), p. 1.
6. Lott, p. 5.