I got pointed to this (PDF, reprint from Journal of Law and Economics, should be publicly available):

http://wbln0018.worldbank.org/LAC/LACInfoClient.nsf/5aaa39a87ab8daf985256cc6006f355b/1847253135d7608d85256c36006d3e67//Inequality%20and%20violent%20crime.pdf

From the abstract: "Crime rates and inequality are positively correlated within countries and, particularly, between countries, and this correlation reflects causation from inequality to crime rates, even after controlling for other crime determinants."

This doesn't resolve a lot of the policy issues, of course, but this type of study helps you set some ground rules for the bigger discussion. Notably, you can assume that increases in wealth disparity promote crime.

It's also worth noting that this link persists regardless of absolute wealth-- in other words, even if country X is poor overall, if only a few people have most of the money, you can expect more crime.

This suggests that if you took steps to lower wealth disparity (more progressive income tax, higher tax rates, more social programs, etc.), crime should decrease. Note that this says nothing about whether such steps are fair, just, or worth doing.

(For example, you could argue that a more capitalist economy would grow faster, and that the rising tide would lift all boats. In other words, even as disparity (and crime) increased, the poorest people could have more in their pockets at the end of the day in absolute terms. That's a much more complicated and speculative argument, and I don't feel competent enough to make or refute it.)

It's hard to talk about these things in an idealized world because that doesn't exist, but it seems to me that free-market capitalism would ideally decrease wealth disparity over time due to competition, but I'm curious as to your thoughts... The other thing about socialism decreasing wealth disparity seems to be at least a little counterintuitive to me. I'm having trouble verbalizing why it seems wrong to me, so I'll come back to it later.

Regardless of how it does or doesn't in an ideal world, it's hard to argue with a comparison of successful economies that are more socialist (Scandinavia, etc.) vs. more capitalist (Japan, US, etc.). In practice, successful economies with more socialist tendencies have ended up with less wealth disparity. This seems very intuitive to me, though I'll again stress that it says nothing about the effect on the overall economy, or whether or not such policies are fair.

valguarnera@carrionfields.com