Past UK welfare cuts and austerity led to rising crime. Will we count the same costs this time?

Cross-posted at the LSE Politics & Policy Blog

The Thatcher governments are widely accepted to have influenced many areas of modern life in Britain. Stephen Farrall and Will Jennings explore the link between Thatcherite macroeconomic policies and crime, arguing that if the ever-growing evidence base of the economy-crime link is true, political decisions about austerity cannot be separated from their consequences in the domain of law and order.

Was one of the unanticipated side-effects of social and economic changes associated with the adoption of neoliberal and monetarist economics during the 1970s/1980s rising crime rates?

In a recent study, we explored the relationship between the economy and property crime in England and Wales, focusing on those aspects of macroeconomics and the distribution of wealth which were associated with adoption of neoliberal and monetarist policies first under the Callaghan government, as a condition of the IMF loan, and prominently under the Thatcher governments. Our findings suggest that changes in the unemployment rate are an important factor in explaining change in property crime rates. They also demonstrate that the link between the economy and crime changed in the period from the 1960s to the mid-2000s, with the effect of the unemployment rate on crime becoming stronger over time.

Using time series analysis we develop a model of the effect of changes in socio-economic variables (unemployment, inequality, welfare spending and incarceration) on the national rate of property crime. We find that while increases in unemployment led to increases in the property crime rate (dampened by effects of welfare spending and incarceration), there is no evidence that rising income inequality was linked to the rising crime rate.

The radical agendas of the Thatcher governments between 1979 and 1990 are widely accepted to have had a great influence on many areas of modern life in Britain – both at the time and in the period since Thatcher left office. Such influence has been identified in housing, education policies, social security and, of course, the economy. In particular, macroeconomic policies were associated – at least in the short-term – with rising unemployment and economic inequalities.

Studies of the economy-crime link suggest higher rates of offending are associated with higher levels of unemployment and economic inequality. Both these conditions are consistent with the broad trends observed in Britain during the 1970s and 1980s, leading us to explore whether one of the unanticipated side-effects of neoliberal and monetarist economics during the period was growth in crime. Our study is based on time series analysis of the per capita rate of recorded property crime in England and Wales and the effects of changes in unemployment, income inequality and the rate of incarceration. (For further technical details of the data and modelling, see the paper here).

As has been observed in studies conducted in other countries, we find a significant relationship between the national rate of unemployment and official recorded crime; a one-point increase in the rate of unemployment is associated with an increase of two crimes per thousand head of population (for a population of around 50 million people this would constitute an increase of around 100,000 property crimes). More interestingly, we discover that this effect has strengthened over time – indicating there has been a hardening of the economic underpinnings of offending. Whether or not this trend will be sustained or reversed in the future remains to be seen .The unavoidable conclusion, then, is that the growing effect of unemployment during the 1970s and 1980s coincided with the monetarist revolution and sharp increases in the unemployment rate in Britain (as well as in other countries such as the US). While monetarist policies succeeded in bringing inflation under control, subsequent upturns in unemployment were associated with rising crime and a strengthening link between economic conditions and offending. Meanwhile, the rising level of crime gave rise to rightward shifts in criminal and policing policies.

The steady growth of crime throughout the 1980s reached alarming rates between 1991 and 1995, forcing the Conservative governments of the time to address the issue of crime ‘head-on’ during the early-1990s. In light of this, we argue the criminal justice policies of the Major and Blair governments were a lagged response to rising crime, and the economic policies that had underpinned this trend (in particular, the political view of unemployment as an acceptable price for getting inflation under control). During this later period, the Labour opposition provided little resistance to the punitive criminal justice policies under Major’s Conservative government, narrowing the range of policies that were ‘imaginable’ for all political parties.

As a consequence, the unanticipated legacies of the social and economic policies of Thatcherism might be seen as:

  1. The foregrounding of crime as a political issue.
  2. The creation of a series of social and economic circumstances (in particular mass unemployment, the geographical concentration of the socially and economically disadvantaged through implementation of housing policies and growth of inequalities coupled with real term reductions in social benefits) which were conducive to the production of crime at the aggregate level.
  3. The strengthening of the effect of unemployment on the national rate of property crime.
  4. Widespread dominance of an issue definition of the problem of crime which flowed from the new social and economic circumstances. This emphasised punitive policies and social control in place of the social welfare model adopted by successive governments since 1945.

In this sense, the outcomes of macroeconomic policies can spill-over into seemingly unrelated domains, such as crime. Political choices of targets for economic growth, public spending and inflation as well as decisions about the tolerable (or politically “acceptable”) level of unemployment and income inequality contribute to patterns of offending, and subsequent calls for crack downs. If the ever-growing evidence base of the economy-crime link is true (and holds amidst the social and economic distress of the post-crisis era), political decisions about austerity cannot be separated from their behaviour consequences in the domain of law and order.

Stephen Farrall, Will Jennings, Colin Hay, and Emily Gray are currently working on an ESRC-funded project on ‘Long-term Trajectories of Crime in the UK’. 

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