by Ed Rubenstein

About the author: Ed Rubenstein is the economics analyst for National Review.

Polls show that Americans regard crime as the number one social problem facing the nation. We fear being a victim of violent crime, or having our property violated, far more than we fear being unemployed or suffering a loss of income. Crime far outstrips inflation, the deficit, or any other economic problem. Yet until recently, the economics profession had little to say about the root causes of criminal activity. Economists could do little more than tally the figures. We know, for example, that there were about 34 million criminal acts committed in the United States in 1992—about 94,000 crimes daily. This is a Justice Department estimate. We don’t know the exact number, because many, if not most, crimes are not reported.

We do know, however, that...