Why are rates of violence and theft dropping in the recession?

In December 2008, just a few months after the U.S. financial system imploded, New York City was hit by a flurry of bank robberies. On the Monday before New Year’s, four banks were attacked in an hour-and-a-half; one daytime raid took place just steps from the Lincoln Center in downtown Manhattan . The week before, San Diego had seen four bank holdups in a single day. Criminologists wondered if the holiday spree was the first sign of a looming crime wave in recession-battered America . Take an uptick in poverty and economic misery, toss in budget cuts to police departments across the country, and that should be a blueprint for chaos—right?

Except, as it turns out, the exact opposite occurred. According to FBI statistics, crime rates went down across the board in 2009. Way down. Murder, rape, robbery, assault, auto theft—plummeted, one and all. Then, this week, the FBI released preliminary data for the first six months of 2010, and again the same pattern emerged. Violent crimes and property crimes alike have been falling in every region of the country. What gives? Have experts just completely misunderstood what causes people to commit crimes?

There's certainly no shortage of theories for why crime rates have gone down over the past two years. The simplest is that crime just isn’t closely related to economic conditions. Consider, after all, the two big crime epidemics in the twentieth century—the first took root in the late 1960s, during a period of healthy growth; the other came during the economic doldrums of the late ‘80s and early ‘90s. The only constant here, it seems, is that both outbreaks were fueled by a major expansion of drug markets: heroin in the 1970s, crack in the 1990s. (The current recession has seen a surge in demand for prescription drugs like Oxycontin or Xanax, but, for a variety of reasons, those illicit markets aren’t associated with the same levels of violence.)

Many conservatives like this storyline. Writing in the Wall Street Journal earlier this year, Heather MacDonald noted that the recession “has undercut one of the most destructive social theories that came out of the 1960s: the idea that the root cause of crime lies in income inequality and social injustice.” What this recession proves, MacDonald argued, is that we needn’t worry about alleviating poverty to fight crime. As long as cities continue practicing savvy policing (such as deploying foot patrols to high-crime areas, a technique pioneered by William Bratton in New York in the 1990s) and locking people up for long periods of time, crime will keep dropping. Conservatives, you see, were right all along.

But not everyone’s quite ready to sever the link between economic conditions and crime. Richard Rosenfeld is a sociologist at the University of Missouri-St. Louis and was one of those experts predicting a recession-driven crime tsunami. He notes that the past two years have come as a total surprise, but wonders if there might be a more subtle explanation at play. Many of the earlier crime-ridden recessions, he points out, have been accompanied by healthy bouts of inflation. When prices are rising fast, the demand for black-market goods goes up, which increases the incentive to steal stuff that you can resell to underground street markets. So it might well be inflation that causes crime. These past two years, by contrast, we’ve been in a near-deflationary period. (It’s worth noting that the Great Depression—another deflationary period—saw crime go way down, as well.)