The recent arrest of the so called Bali Nine for allegedly smuggling heroin into Australia (Powell & Carroll 2005, online) has caused controversy and created rifts between Australian and Indonesian relations. Resulting to a death penalty through firing squad if found guilty, what instigated these people to participate in this illegal activity? There are three approaches dominate the theories of crime - psychological, sociological and economic (Fadaei-Tehrani & Green 2002). As for the Bali Nine, we will demonstrate that an individual's lack of money is not the prime factor that cause acts of crime, as there are other factors behind these acts (Rubenstein 1995). The core of this essay is to discuss the economic approach to crime and examine whether economic theories can be applied to society in order to reduce crimes. We will use the subject of illegal drugs in Australia as an example of crime to illustrate our arguments.Gary Becker was the first economist to apply economic theory to analyze criminal activity (Rubenstein 1995). An economic approach would take into account the expected costs against expected benefits of committing a particular crime, assuming criminals are rational persons acting in their own self interest. Criminals view the cost of crime in two parts: the opportunity cost of committing a crime and the time expected to be jailed because of their activity.Before committing a crime, criminals analyze its opportunity cost. The opportunity cost is the income foregone by devoting time to criminal activities. In other words, it is the rate of return on legal market activity (Rubenstein 1995). The opportunity cost of an individual committing a crime is determined by various factors in the economy (Rubenstein 1995). One factor is the unemployment rate given that it determines the chances of employment. The levels of real wages as well as income equality are factors which determine the level of income during periods of employment. The welfare policy is also another factor as it represents income during periods of unemployment. Lastly, economic policy determines opportunity cost as it establishes the future wages and the chances of maintaining a job. For most criminals, the opportunity cost of committing a crime would be low as they would have little skills and low education.To further illustrate this point, consider the case of one of the Bali Nine suspects, Renae Lawrence, who was debt ridden (Moore, M. & Connolly, E. & Baker). By partaking in drug smuggling, which offers her $15000 (estimated to take a month), her opportunity cost would be retaining her old job at a catering firm, which she would have earned approximately $2400 (assuming she earns $20 per hour and 30 hours a week). Here Renae earns more from drug smuggling soThe second cost to criminals is the time they expect to be imprisoned because of their activity (Rubenstein 1995). This cost is far greater than the former cost. From the criminal's point of view, the...
