The "Lump of Criminality" fallacy

There is a widely understood and recognised fallacy within economics known as "Lump of Labour".

The rebuttal to it essentially says that the amount of work available within an economy is not fixed (as the fallacy would have us believe) but rather changes as the economy grows and changes. This can be as a result of organic growth or can also be as a result of other factors such as legislative and technological changes and things like immigration etc.

Image courtesy of David Castillo Dominici

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This fallacy is highly reminiscent of an argument I have heard put forward to justify the retention of the current laws on drugs. It goes along the lines of: "Do you really think that if we legalised drugs, the drug dealers and barons would suddenly become nice people and stop being law breakers? Of course they wouldn't, they'd simply find other nefarious activities to replace the lost drugs revenues.".

This argument seems plausible on a prima-facie basis. If someone has got themselves involved in drug dealing they are likely to be something of a wrong-un and it does not take much of a leap of imagination to conclude they might get up to other dodgy behaviours were the drugs option taken away from them.

But this is very similar to "Lump of Labour". It's assuming that there is a fixed amount of criminality in the economy and that nothing we do can change that. Is it presupposing that all of those people involved in the black market drugs world would have progressed to crime anyway and they just happened to choose drugs, as if a criminal lifestyle is somehow predetermined outside of any cultural, legal and economic factors.

We might want to call this the "Lump of Criminality" fallacy. It is surely pretty self-evidently not true. Drugs at the moment are a highly lucrative activity. There are various estimates but one recent study puts the drug trade in the UK as valued at £7 billion per year. That is a huge amount of money currently available to the black market and even a tiny slice of those sort of revenues will make getting involved in criminality a more attractive option for some people. If you bring currently illegal drugs entirely within the legal economy those monies disappear. Yes I am sure some of those dodgy characters will find other illegal ways of funding their lifestyles but it is also likely that a fair number of them will move into the legal economy.

It is also worth bearing in mind that some of those who will decide to remain in the criminal world will be doing so because it's probably all they have ever known. They will have found themselves drug dealing to e.g. fund their own drug habit and now all of their friends and their entire lifestyle is on the wrong side of the tracks. But if drugs had been legal from the get-go they would have been much less likely to be in a situation like this. Hence as time goes on the chances of people in marginal situations turning to crime will be reduced too.

I'm not claiming legalising drugs will be a panacea. Of course it won't be. Drugs can be dangerous and even under a legalised framework some addicts will commit crimes. But the idea that changing the drugs laws will not do anything about the level of criminality in our society is a knee-jerk reactionary fallacy that does not really bear more than a few minutes scrutiny.