Do Hard Times Cause Crime? The Lessons of History

By Barry Latzer

Many people believe that economic depressions and recessions cause crime, and that economic booms are associated with low crime rates. History, however, tells a different story.

Cell block, Atlanta Penitentiary; courtesy Library of Congress.

In my new LSU Press book, The Roots of Violent Crime in America: From the Gilded Age through the Great Depression, I examine in detail United States crime rates over a sixty-year period, from roughly the 1880s to 1940. I wrote about a more recent period, 1940 to 2015, in my previous book, The Rise and Fall of Violent Crime in America (2016). Together, these works provide new insights into the relationship between crime and various social conditions: poverty, immigration, economic crises, weakness in the criminal justice system, group subcultures of violence, and more.

A major issue addressed by Roots of Violent Crime, which I would like to touch on here, is the relationship between economic conditions and violent crime. I will limit my remarks to crimes of violence, that is, murder, rape, assault, and forcible robbery. This leaves out property crimes, such as theft/larceny, fraud, burglary, and arson. I’m also excluding so-called public order offenses, including drunk driving, weapons violations, and immigration crimes.

Property crimes and public order offenses correlate with economic conditions in a different way than violent crimes. One can readily see why. Suppose we have a terrible depression, as in the 1930s, with millions of people desperate for necessities and even for food itself. It doesn’t take much to imagine theft and burglary rising in such a situation. As I will show, however, violent crime does not follow the same trajectory as property crime, though it is widely believed that economic decline is a principal cause of crime increase.

The United States has suffered numerous economic recessions, the worst of which (the Great Depression) lasted for more than a full decade, from the stock market crash of late 1929 to the war boom of 1941. Major recessions also occurred in 1873–1879, 1893–1897, and 2007–2009. But there was no consistent relationship between economic decline or economic booms and violent crime.

“Fill that cell!” centerfold illustration from Puck (February 19, 1908); courtesy Library of Congress.

In the 1890s, a major recession and the influx of millions of massively impoverished immigrants should by popular assumption have produced higher violent crime rates. As I write in Roots of Violent Crime (p. 168):

“If cities breed crime, then the late nineteenth-century United States should have experienced a crime tsunami. Not only did America’s urban population soar, but the living conditions in those cities were, by contemporary measures, petri dishes for criminality. The new urban masses were poor, often desperately so. They were densely packed into the most appalling housing, when not forced by impoverishment to sleep in public places or police station barracks. Urbanites below the middle class were unable to support their children past age twelve, leading city youth to drop out of school to work long hours, or to join street gangs and steal for survival. The cities were governed by thoroughly crooked municipal regimes, such as the notorious Tammany Hall in New York. The police, essentially a security force for the corrupt city governments, were untrained, incompetent, and abusive—free with their nightsticks, especially in dealing with the ‘dangerous classes’ of poor immigrants. The immigrant groups, moreover, along with African Americans who were just beginning their northward migration, were routinely discriminated against because of their nationality, their religion, or their appearance and socially isolated from the city’s middle class, who fled to less menacing suburbs.”

Despite these dreadful conditions violent crime was low, especially in the big cities of the Northeast. Here are the murder rates (per 100,000) in 1890 for six cities. For comparison, consider the murder rates (per 100,000) in these same cities one century later.

As important as the crime rates are, the nature of violent crime in the 1890s was just as significant. Robbery of strangers, the scourge of the crime wave from the late 1960s to the mid-1990s, was virtually unknown in the late nineteenth century. Crime historian Roger Lane once reported that “robbery at gunpoint was so rare in the urban East” that a Bronx saloon holdup in 1895 made headlines in Philadelphia, and the story ran for a week! In 1990, by contrast, an armed robbery in the Bronx wouldn’t even have produced an article, much less a headline, in New York City newspapers.

Jumping ahead to the 1920s, we find an economic boom period. From 1920 to 1929, the nation’s gross domestic product rose 42 percent. The unemployment rate averaged just 5.5 percent. Disposable personal income went from $71.5 billion to $83.3 billion, a jump of 16.5 percent.

Despite the boom, violent crime soared. The chart below shows homicide rates from 1920 to 1940. Notice that the 1920s rates were around 9 per 100,000, which is about the same as the rate from 1970 to 1990. But the big difference was the absence of “muggings.” Robbery was a much greater threat in the 1970s–1990s.

Vital Statistics of the United States, National Center for Health Statistics; Douglas Lee Eckberg, “Estimates of Early Twentieth-Century U.S. Homicide Rates: An Econometric Forecasting Approach,” Demography 32 (1995): 1–16.

Now, you are probably thinking that Prohibition and the booze gang wars were responsible for the high murder rates in the 1920s. Actually, Prohibition had a mixed impact. On the one hand, it spurred shooting wars between organized crime gangs, which increased murder rates in the biggest cities. On the other hand, Prohibition made beer and other alcoholic beverages very expensive, resulting in less public drunkenness and fewer incidents of associated crimes. It also closed down the saloons, which were centers for young male violence.

The Great Depression of the 1930s underscores the inconsistent relationship between violent crime and the economy. Murder rates had been hovering around 9 per 100,000 when the Crash of 1929 occurred. These rates rose even further in the early ’30s, the worst years of the Depression. By 1932 an estimated 28 percent of the nation’s households, containing 34 million people, did not have a single employed wage earner. The economy began to improve after 1934 and voila! Crime fell off sharply. This suggests that economic improvement reduces violent crime. But . . . there was a major economic downturn in 1937–38 (the “Roosevelt Recession”)—nearly four million people lost their jobs, boosting total unemployment to 11.5 million—and despite this recession within the Depression, violent crime continued to decline.

So, there is no trend, no consistent relationship, between general economic conditions and violent crime. This anomaly continued after World War II. Violent crime soared during pe­riods of great prosperity, such as the late 1960s, and declined during recessions, such as in 2007–2009.

What is the explanation for this? The main factor is that violent crimes (except robbery) are not, by and large, motivated by economic concerns. Murder and assault tend to be precipitated by anger, sexual jealousy, perceived insults and threats, long-standing personal quarrels, and similar issues, frequently facilitated by alcohol or some other disinhibiting substance.

Rises and falls in violent crime are less affected by general economic conditions than by demographics (the size of the young male population), weakness in the criminal justice system, the migration or immigration of groups with historically high rates of violence, violent youth gangs, and the widespread availability of firearms.

For over three and a half decades, Barry Latzer served as professor of criminal justice at John Jay College, CUNY, where he was a member of the graduate faculty. He has written five books and nearly ninety scholarly articles and research reports.

Cover image for "The Roots of Violent Crime in America."

Available Now

The Roots of Violent Crime in America is criminologist Barry Latzer’s comprehensive analysis of crimes of violence—including murder, assault, and rape—in the United States from the 1880s through the 1930s. Combining the theoretical perspectives and methodological rigor of criminology with a synthesis of historical scholarship as well as original research and analysis, Latzer challenges conventional thinking about violent crime of this era.

Follow LSU Press on Twitter and Facebook.