Non-market institutions and crime in US counties: Hayek v. Polanyi. Issue 2 (3rd April 2021)

• Record Type: Journal Article
• Authors: Zullo, Roland
• Is Part Of: Review of social economy. Volume 79:Issue 2(2021)
• Page Start: 310
• Page End: 332
• Publication Date: 2021-04-03
• Subjects: Socialism -- public goods -- non-market institutions -- laissez-faire -- crime; H41 (public goods) -- Z13 (economic sociology) -- P17 (capitalism performance); Economics -- Periodicals; Economics -- Moral and ethical aspects -- Periodicals; Social justice -- Periodicals; 330.5
• DOI: 10.1080/00346764.2019.1663909
• Languages: English
• ISSNs: 0034-6764

Abstract

Abstract : Karl Polanyi's The great transformation emphasized the importance of non-market institutions for social equity and stability. In that same era, Friedrich Hayek postulated in The road to serfdom that superior economies were market-based and featured minimal government. I compare these worldviews in relation to property and violent crime. Using US county data, change in crime is modeled as a function of economic structure, economic conditions, and demographics. Consistent with Polanyi, the size of the public sector in the economy negatively associates with crime. Within the public sector, education is a critical crime-reducing function, more so than law enforcement. Industry diversity is positively associated with crime, contrary to Hayek. Manufacturing equates with lower crime and the size of the private non-profit sector is unrelated to crime. Overall the results favor Polanyi's assertion that non-market institutions are necessary to counter the harsh outcomes arising from market economic systems.