One of the most interesting arguments in the debate about inequality has been that rising inequalities lead to a higher cost of providing public goods. In short, where there are more inequalities, criminality is higher and forces a greater level of expenditure on private security – a great social cost. Whilst I would normally buy that line of reasoning, I am not fully convinced by the data. Look at the graph below and tell me what strikes the most (think about drugs – like cocaine).
The states with low levels of inequalities and low levels of “private police” labour force are also the states with low levels of drug offenses. Could it that there is a great level of correlation between “private police” and “drug offenses”. Take Montana and Iowa (low inequality) who have respectively 1.7 and 3.3 drugs offenses per 1,000 inhabitants and compare them with California, Mississippi and New York (6.7 per 1,000, 8.1 per 1,000 and 5,6 per 1,000). Private policing might not be the result of inequalities per se but rather the result of an unsafe environment created by the war on drugs which pushes rich individuals and businesses to increase their demand for private security(econometric studies do point towards an increase in criminality resulting from prohibition).