Many people argued that the move is a win win. People who are in need get the things they need, or other sources of income, by stealing them. Stores and police don’t have to bear the impact of confronting or prosecuting minor offenses. The crimimal justice system is relieved of petty offenders. The overall arrest record of the poor and minorities falls. The legalization of theft, some claimed, was really a blow for racial justice and equality. Why shouldn’t people who steal things enjoy the same rights to freedom, a clean criminal record, and the possession of desired goods as non-thieves?

This, of course, led to some very amusing videos of people simply walking into stores, grabbing things, and walking out, sometimes in full view of police and security officers. But then some national chains announced that they were going to close their locations in these areas, die to the lack of law enforcement. This was seen as a move in bad faith, by voters, who saw this as a sign of prejudice, privilege, and an unwillingness to serve people who deserved equal access to those services. Besides, some said, those minor losses won’t really hurt Walgreens. They’re a huge corporation that makes tons of money, and they can simply claim the losses on their insurance policies. So it’s not like this new policy recall costs anyone anything. And that’s where they’re dead wrong. Well, that and absolutely everything else. But this one is easier to explain.

People who aren’t in business don’t understand how a business works. Theft losses are a kind of fixed cost. You don’t use your insurance on them. It’s part of the fixed cost of doing business. Fixed costs get built into the pricing structure. So if you’re going to operate in an area with high fixed costs, those costs will be passed on to the consumer.

So yes, in theory Walgreens will be OK, but everything in these areas will get more and more expensive. And increased security costs and measures, if you want to avoid being robbed, and these become very necessary if you’re in an area with a consistently high crime rate, also become a burden.

The problem is that these people are underestimating the economic value of law and honesty, as well as the economic cost of insecurity, instability, and dishinesty. They’re underestimating just how much money we all save by living in a place where this kind of fixed cost is minimized and restrained. It makes everything more affordable for everybody.

These sorts of crime-tolerant policies actually negatively affect people in poor, high crime areas the most by making the goods available to them less and less affordable and access to them more uncertain.

The best way to look at law and order with respect to business is to look at it as a kind of proactive price control. If you want to keep goods cheap and easy to get in poor and dangerous areas, better protection from theft and violence in places of public commerce is actually one of the best ways to do that. In areas where you want to encourage earning and saving and commerce, the best thing you can do is to secure the products of those efforts. If you want to discourage people from earning and saving, there’s no better incentive than instability and insecurity.

This “ignore minor property crimes” approach will directly disincentivize being law-abiding and paying full price (including shouldering the extra cost of theft losses) and incentivize theft and other short-term, non-prodictive means of aquisition. It’s simple economics. You’re increasing the cost of being honest and decreasing the cost of being dishonest.

I think that anyone who has had kids would realize this would never work in the home as a parenting strategy among your children. And anyone who actually owns a business would it that too. You couldn’t live your life in your own personal spaces that way. Why should it work anywhere else? Anyone who lives in the real world should know better.