The richer we are, the less crime there is

People have an unusual nostalgy for old times. "Things were simpler." "there was less crime," "people lived lives in tune with nature." But this idealization ignore that people were living short lives, their living environment was filthy, they enjoyed none of the amenities that we currently enjoy, lives were tough and stressful, and crime was much higher. While the latter holds true through time along the development process into modern economies, it holds also across space, where poor countries have considerable higher crime rates than rich ones (one notable exception for violent crime may be the United States).

Carlos Bethencourt and Fernando Perera-Tallo try to rationalize this correlation with a growth model where people choose how much time to devote to production or predation. The more time is dedicated to predation, the higher is the share of output diverted to them, and the lower is total output, as predators can be considered as idle resources for national accounting purposes. An important aspect of the model is the interaction between predation time and capital accumulation. Suppose the elasticity of substitution between labor and capital is lower than one. The labor income share then increases as the economy grows. This decreases the incentive to predate, and more time is devoted to production and capital is accumulated faster, increasing the growth rate further. One can then imagine a rapid drop in predation, and possibly an explanation for the role of "institutions" in the growth process. All that remains is to convince us that the assumed elasticity is indeed below one.