Is Crime good for Economy?

There is a school of Economists who believe that Crime is good for the Economy. An example cited is that when a thief breaks into a home, it creates Economic growth. Confused? Well, they are not entirely wrong.

(1) When they break the window, it needs to be repaired- creating jobs for the local window trader.

(2) The home occupier calls the Police- creating jobs for the Police officer.

(3) The stolen items would need to be replaced- creating demand for Products in the marketplace, hence generating Revenue for those businesses and ultimately creating jobs.

(4) People are more likely to take Home insurance when the fear of theft is prevalent- creating jobs for the underwriter, insurance broker and all associated with this industry.

The list carries on but you get the gist.

The home occupier's savings were comfortably sitting in the bank account, and now they have been encouraged to spend money, creating 'Consumption', which means that the money has come into Circulation, thus contributing towards Economic growth.

Economic Growth is calculated using GDP, here is the formula for it.

GDP = C + I + G + (x-m)

C - Consumption (when you buy products & services)

I - Businesses investing money to buy machines, land etc.

G - Government spending on Infrastructure, Education, Healthcare, defence, Innovation etc.

x- Exports (good & services sold to other countries)

m- Imports (good & services bought from foreign countries)

There are Economists who sit on the other side of the fence and dispute this theory. Their argument is that the home occupier would have spent that money on other Good & services, had they not been burgled. Therefore, the money would have come into circulation anyway, leading to Economic growth. In fact, they go a step further with their critical analysis and state that it robs the other industries of expenditure, and reduces amount spent on other goods. This is also known as the 'Broken window fallacy'.

What do you think?