What and why does crime pay? It seems like a simple question but it’s trickier than it seems. Criminals, after all, aren’t exactly very honest and open about their dealings.
Given the mystique around crime, it’s tempting to see crime as some sort of psychosis (although, in some cases of course, it is). But, actually, most forms of crime is very rational.
At a panel discussion during the Festival of Economics last year, the Australian academic Mirko Draca argued that economic incentives can frequently explain why people embark on criminal careers. He noted that criminals usually act very rationally, responding to the prices of goods and managing risks.
Draca’s colleague Nadia Campaniello also explained that the choice to embark on a criminal career is often guided by standard incentives like potential earnings; earnings that are high enough to mitigate the negatives of the criminal life.
If you come out of the prison and you want to go straight, you’re aware there’s always a question mark over you.
The question, then, isn’t ‘why crime pays?’ but what is the alternative to a life of crime for these rational, productive individuals?
In an interview with The Guardian, the Italian investigative author Roberto Saviano made the point that most criminals are business people. Not in the traditional sense, of course, but they frequently exhibit extremely entrepreneurial traits.
The issue is that there aren’t always opportunities to use these traits in a legal way.
“The thing that struck me in prison was that there some incredibly entrepreneurial individuals,” says Paul Buck, founder of EPIC Risk Management, a business he started in prison. “My experience was that there were lads in there who if they applied even a fraction of their entrepreneurial skills to a legitimate business or a career, they’d be an amazing asset.”
EPIC is a risk management consultancy that educates individuals and organisations on gambling addiction. The company now employs 14 people. The idea ties in with the addiction that almost destroyed Buck’s life. “The aim of EPIC is to stop people from even reaching the edge of the cliff before they fall off.”
In particular, it’s incredibly tough to gain funding once out of prison, according to Buck.
Buck’s point on entrepreneurial criminals is echoed by Duane Jackson, founder of the software company Kashflow and ex-convict. “Especially individuals that were involved in drug offences,” he told BusinessZone. “They’re buying a product in bulk at one price and selling it in smaller quantities at a markup. That’s business, it just happens that their products are illegal.”
The parallels between the black and normal market are stronger than it seems, according to Jackson. “We had couriers carrying drugs to the states and we realised they were coming home empty handed,” says Jackson reflecting on his past. “We thought ‘they’re willing to carry drugs, we should have them carry drugs back as well’. In a boardroom that’s just called sweating the assets.”
The problem, then, isn’t a lack of entrepreneurial zest. Instead, the issue seems to a lack of opportunities for entrepreneurial prisoners and ex-prisoners to use their skills legitimately. In particular, it’s incredibly tough to gain funding once out of prison, according to Buck.
Buck’s past in the financial industry blessed him with the business acumen he needed to start EPIC. But, he explains, for others leaving prison there aren’t enough options and the temptation of falling back into a life of crime are very high.
Once he left prison, Buck struggled to open a bank account and scrambled to find adequate funding. He eventually received a small £5000 investment from UnLtd, a social investment company, which he used effectively and was then able to unlock a further £20,000 from the organisation. This money gave EPIC enough momentum to enter and win The Big Issue’s social venture award.
The thing that struck me in prison was that there some incredibly entrepreneurial individuals,
Kashflow’s Jackson also experienced his struggles with traditional banking and got his start with The Prince’s Trust. “I went to the Prince’s Trust and got a small loan and a grant from them to get started,” he explains. “It wasn’t as easy to get the money as I thought. I thought it’d be a case of turning up and telling them what I wanted to do and it being easy money. But my background wasn’t a problem for them at all.
“I think there are enough of these schemes – but they’re not coordinated well enough. There are a lot of them out there and they’d be a lot better combined.”
As for the banking and everyday difficulties experienced by ex-prisoners, these are often exacerbated by their desire to be painstakingly honest, explains Jackson. “Most ex-cons won’t cut the normal corners,” he says.
“If you come out of the prison and you want to go straight, you’re aware there’s always a question mark over you. Therefore you know you have to be very honest in your dealings otherwise people will just go ‘ah, ex-cons, you see, can’t trust ‘em’.
“So when you’re presented with a form that asks ‘have you got a conviction?’, most people, if they have a minor conviction will just tick no. But because you’re being overly honest, you have to tick yes otherwise it will come back and bite you.”
About Francois Badenhorst
Francois is the deputy editor of BusinessZone and UK Business Forums.