The security and prosperity paradox, shoplifting edition

A while ago we flagged what we felt was an exceptionally thought-provoking political-economy paper by Dal Bó, Mazzuca and Hernándezto. It talked of a prosperity-security paradox, noting specifically that (our emphasis):

Without a substantial surplus, it was not possible to fund the tangible components of civilizations. However, surplus production was only a necessary condition for civilization, not a sufficient one. In fact, prosperity could be self-defeating. Primitive food producers were surrounded by nomadic tribes for whom agricultural surpluses were a most tempting target for looting. The resulting clash is a primordial conflict shaping the civilizational process. According to McNeill (1979, p. 71), “Soon after cities first arose ... the relatively enormous wealth that resulted from [their economic activity] made such cities worthwhile objects of attack by armed outsiders.” For anthropologists, intergroup violence had been prevalent since before civilization (Keeley 1996), but the emergence of large surpluses intensified the potential for conflict. According to Michael Mann, “the greater the surplus generated, the more desirable it was to preying outsiders”

Since civilization entailed the joint achievement of prosperity and security, its emergence is a fundamental paradox. Primitive societies that held production close to subsistence levels could hope to mitigate predation, but stagnation would foreclose the civilization process. To reach civilization, primitive societies with the capacity for surplus production had to overcome the dangers of self-defeating prosperity without relying on the relative safety of stagnation. A proper balance was needed between surplus production and surplus protection.

Civilisations, in that context, only arise and survive when a balance can be reached between the amount of capital that needs to spent on defence and the amount needed to keep production flowing and growing.

As the authors also note:

If sufficient defence can be financed, the challenger can be deterred. If attacks cannot be deterred, the rate of return to economic investment may not be high enough to justify surplus production. Moreover, productive investment, a precondition for systematic surplus production and the construction of the durable structures associated with civilization, may intensify predatory challenges by raising income. The result is a trade-off between investment-led growth and security.

Keep that in mind when assessing the following news from the Federation of Small Businesses (FSB) out last Friday (our emphasis):

Small businesses are incurring mammoth costs of almost £17 billion every year due to criminal activity, according to new research from FSB. Reacting to these startling statistics, Federation of Small Businesses (FSB) National Chairman Mike Cherry, said:

“What these latest figures show is the immense pressure that all small firms are facing on a daily basis.

At a time of huge uncertainty and increasing costs, business crime is a serious issue that is devastating firms up and down the country.

These figures come before other indirect costs such as store closures and staff absences are even taken into account, meaning that the £17 billion figure is estimated to be far higher. Traditional crime, including robbery, fraud and criminal damage, affects around 900,000 small businesses each year and we must tackle this issue before it gets even worse.

“It’s vital that the Government, especially the incoming new administration, help plug the multibillion pound black hole that is sapping income from small firms and deal with business crime which is serious but often overlooked.

“A major step the Government needs to make is to bring police numbers in England and Wales closer to the European average of more than 300 officers per 100,000 people. At the moment, there are only 212 per 100,000.

“The availability of more police officers and resources is a critical step in ensuring that crimes are both prevented and subsequently investigated. The Home Office must link funding to the proper resourcing of business crime. This sort of action will not only benefit small businesses but the wider economy and the country as a whole.”

It does make us wonder what the point is of all the tech monitoring and surveillance (and with it the soundness of the cost-saving panopticon theory itself) if none of it is dissuading shoplifting, robbery and other value-plundering related crime.

It also reminds us of the time we sat next to the head of shrinkage and security of a major UK supermarket at a function, and began a conversation about the actual value-add of self-checkout systems. The feedback was that the savings amassed from firing checkout staff were largely entirely offset by the costs of shoplifting and associated security staff.

In other words TEEIFF.

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