TomCollins Theory of Theft in an AC Society

[TomCollins]

There seems to be a lot of debate about whether powerful groups would steal rice bowls from peasants and the like, but I have come to the following condition that must be true for AC to work.

I'm going to call it Tomcollins's Theory of Theft unless its somewhere buried in the tomes of AC Theory or Neilso's podcasts. It involves semi-rational actors, but can be expanded to include the motivations of "irrational" types set on world destruction, etc...
If the cost (EV) of stealing a good is greater than the benefit (EV) of stealing it, stealing will only happen on small scales or be mostly stopped by the market.

To clarify on this point, if there is some very valueable property (Ft. Knox), but it is very expensive to take it (fighting the Army, or making a very complex tunnel/espionage operation), it is very unlikely to get stolen. Stealing a purse has a very small benefit with a much smaller cost. The cost of stealing a purse varies tremendously (if you are a good thief, the likelyhood of getting caught is smaller. If you are rich, going to jail may mean more to you than being homeless).

Owners will be willing to spend more to protect valueable goods than less valuable goods

If I have a new Ferrari, I will likely keep it locked in my garage or install a security system in it. However, I may leave my grill on my back porch where it could very "easily" be stolen.

In general, people will not spend more to protect goods than their value

If I have a pencil I value at $1, I won't put much effort into protecting it. However, suppose there is a kleptomaniac pencil thief stealing pencils. Suppose it costs me $2 protect the good. The cost of the thief trying to steal it is only $.25. He will steal my pencil.

The value of a good must include the likelyhood of being stolen.

Since the pencil theif stole my pencil, I will likely buy a new one (since I value it more than the cost of getting a new one). However, if I buy another pencil, the thief will just steal it again. To properly value the pencil, I must incorporate the likelyhood of it getting stolen. If it will always get stolen when buy it, it is worthless to me (except for the small period of time I actually have it). So for me to purchase the pencil, the following equation must be > 0.
My Value*(likelyhood of not being stolen) - cost of protection + temporary benefit of item before being stolen. Since there are numerous ways to protect an item, it must be enumerated for all possible security levels.

Conclusion: If the cost of defending a good provides a greater cost to those who would steal it, theft will be limited. If the cost of defending a good is much greater than the cost to those who would steal it, theft will be widespread.

If I wanted to invade a country that was very strong, even if I could steal all of their resources, the cost of invading would often times be much greater than the value of the resources. If the cost of defending a country is much less than the cost of invading, very few countries will be invaded.

AC then requires this condition, or it is doomed to failure:
Defense must be much less expensive than offense.

[WordWhiz]

Explain why any of this is unique to AC. If a kleptomaniac pencil thief is stealing your pencils, are you going to go through all the trouble of filing a police report, showing up to testify against him at trial, etc.--all of which is much more expensive than the item stolen?

If the problem is serious enough, you will. Things are worth defending for deterrence value in a game-theory type situation, even if the absolute value of the item is less than the cost of preventing it from being stolen or the cost of recovery.

In our current system, many large corporations will settle lawsuits against them that have little chance of succeeding, just because EV settling > EV fighting the suit, regardless of its merits. But if they get hit with enough frivolous suits, they'll fight back even if it means losing more on one particular lawsuit than just settling.

Similarly, the government prosecutes people even for minor thefts under the same theory. I see no reason why a private defense agency would not operate under the same logic.

[sam h]

The cost of defending a lot of goods you might steal is pretty minimal, for a variety of reasons. For one, there are probably economies of scale in defense. For two, oftentimes things are stolen and immediately consumed.

Not too much kept the Somalian warlords from appropriating whatever they wanted when areas of that country were effectively stateless. What are the costs of defense of taking someone's cow and making a few steaks to feed your loyalists?

[TomCollins]

Explain where I claimed this was a problem, or it was unique to AC?

[pvn]

[ QUOTE ]
Conclusion: If the cost of defending a good provides a greater cost to those who would steal it, theft will be limited. If the cost of defending a good is much greater than the cost to those who would steal it, theft will be widespread.

[/ QUOTE ]

Or people simply won't own those types of goods.

[TomCollins]

[ QUOTE ]
[ QUOTE ]
Conclusion: If the cost of defending a good provides a greater cost to those who would steal it, theft will be limited. If the cost of defending a good is much greater than the cost to those who would steal it, theft will be widespread.

[/ QUOTE ]

Or people simply won't own those types of goods.

[/ QUOTE ]

I'm glad that you acknowledge that some goods have these properties, and others don't. The question from here is what traits on goods make defense cheaper, and what makes it more expensive (relative to value)? Smaller goods can easily be protected physically, but larger goods are harder to transport and hide. The market has provided some interesting solutions in the past, such as theft deterrent systems on cars from basic locks to "The Club" or tracking systems.

In some sense, this OP was a response to the common argument that the powerful will steal from the less powerful (who own less goods). This is only true when the cost of defending such goods is at or higher than the benefit of stealing it. That argument may be true in some cases, and is at least logically valid. It is very unrealistic, at least in the current state of technology. Insurgencies have been able to repel armies many times larger who bear costs far greater than that which they pillage (or could pillage). Many times, those doing the stealing are not doing it for purely profit reasons, but other reasons. This is not the case for all goods, but quite true for many.

[pvn]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Conclusion: If the cost of defending a good provides a greater cost to those who would steal it, theft will be limited. If the cost of defending a good is much greater than the cost to those who would steal it, theft will be widespread.

[/ QUOTE ]

Or people simply won't own those types of goods.

[/ QUOTE ]

I'm glad that you acknowledge that some goods have these properties, and others don't. The question from here is what traits on goods make defense cheaper, and what makes it more expensive (relative to value)? Smaller goods can easily be protected physically, but larger goods are harder to transport and hide. The market has provided some interesting solutions in the past, such as theft deterrent systems on cars from basic locks to "The Club" or tracking systems.

In some sense, this OP was a response to the common argument that the powerful will steal from the less powerful (who own less goods). This is only true when the cost of defending such goods is at or higher than the benefit of stealing it. That argument may be true in some cases, and is at least logically valid. It is very unrealistic, at least in the current state of technology. Insurgencies have been able to repel armies many times larger who bear costs far greater than that which they pillage (or could pillage). Many times, those doing the stealing are not doing it for purely profit reasons, but other reasons. This is not the case for all goods, but quite true for many.

[/ QUOTE ]

I'm in 100% agreement with this analysis.

Working from this, we can also see that for goods that fall into the "netherworld" where the cost to defend them exceeds their value, the state does not have any magic powder that changes this economic reality. It merely shifts the expense of defense to some other party.

[renodoc]

[ QUOTE ]

Defense must be much less expensive than offense.

[/ QUOTE ]


I think you should call it the '06 Bears theory of Theft.

[WillMagic]

[ QUOTE ]

AC then requires this condition, or it is doomed to failure:
Defense must be much less expensive than offense.

[/ QUOTE ]

I agree.

Example 1 of 120341343784 that this is in fact true: The Iraq War.

[bills217]

[ QUOTE ]
[ QUOTE ]

AC then requires this condition, or it is doomed to failure:
Defense must be much less expensive than offense.

[/ QUOTE ]

I agree.

Example 1 of 120341343784 that this is in fact true: The Iraq War.

[/ QUOTE ]

ZOMG do you want AC-land to be like Iraq yeah that would be great!!!!!!!1111111111111