London Street Gangs Are Economically Rational – Now For The Labour Party, Eh?


An interesting little study from the environs of London. Gangs, street gangs, aren’t about protection of social, geographic or racial turf these days. They’re about extracting the profits from the drugs trade. Good, that shows that Da Youf are economically rational. For there is a great deal of money in said drugs trade and armed might is the only way to protect said moolah. We may well not like what they’re doing, even prefer that the system didn’t tempt into doing it, but it’s a rational response to how the system is:

London’s gangs appear to be driven increasingly by a desire to profit from the illegal drugs market rather than a determination to protect their neighbourhoods from outsiders, a study has found.

The report on gang culture in Waltham Forest, in the north-east of the capital, also suggests visible signs of gang membership are being rejected on the grounds that they are bad for business.

The report, From Postcodes to Profit, was prepared by researchers at London South Bank University at the request of Waltham Forest council.

“The first major development is the emergence of a more organised and ruthless operating model focused on the drugs market and driven by a desire for profits,” its authors say.

“This new operating model rejects visible signs of gang membership as ‘bad for business’ because they attract unwanted attention from law enforcement agencies.

It’s a bit of a smack in the face to those who insist that people aren’t economically rational. Even that they’re not utility maximising – profit maximisation often being a useful proxy for that. For here are people being that and doing that.

If we want to stop all of this then we’ve got to change the system within which this is a rational response. The only way to do that is to remove the profits from the drug trade. Which we can only really do through drug legalisation. Give it a little time after we’ve done so and profits will sink to around about the average cost of capital, as they are in pretty much every other business in the country. Seems simple enough however much some recoil at the simplicity of the point.

Much the more fun observation though is that we’ve the bottom level of society here showing that they are indeed economically rational. So, when does the Labour Party start following suit?

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