Tuesday, January 4, 2011

Employee Theft

Here in Ann Arbor, the Cafe Luwak of Ypsilanti closed its doors after nearly six years, finally driven out of business by internal fraud and larceny.  The full story is on their blog.  The demise of a cool coffee shop that served a nice array of ice cream and a terrific offering of outstanding deli was a loss to the community. 


 Restaurants are a challenge even when the economy is expanding.  The economy was never good since they first opened in February 2005.  Yet they survived.  Ypsilanti's Depot Town is a good location. Cafe Luwak had popular bars and retailers for neighbors, a short drive or a summer walk from the campus of Eastern Michigan University.  In entrepreurship seminars, they teach that most new businesses fail within five years, most of those in three.  Cafe Luwak survived the critical curve, but were taken down by employee theft.


Retailers know that shoplifters are less damaging than employees. University of Florida criminology professor Richard Hollinger specializes in retail crime.  His 2009 survey of one hundred shops found that 43% of losses come from employee theft and 35% from shoplifting.  In restaurants and bars customers have no easy access to storage or the till, so employee theft is even more of a problem.  Luwak's losses came to $40,000 last year in inventory and cash combined. 


Crime has many explanations.  In the past two generations, criminologists offered over fifty separate hypotheses.  Among the weakest are the "critical" theories of Marxist conflict which remain popular with many academic criminologists and sociologists.
Now in a 9th Edition from Prentiss-Hall

In economics text books, Karl Marx has been relegated to the margins, to balance the laissez faire theories of Hayek and Mises. In economics, the commanding heights belong to Milton Friedman and the Chicagoists.  But in sociology and criminology, Marx is still taken seriously.  For the critical criminologist, crime is a response to oppression.  People steal out of need or vengeance, retaliating against exploitation. 


The facts tell a different story.  Consistent statistics across decades from the Uniform Crime Report show no correlation between the general economy and crime generally. 


Admittedly, the UCR has some structural problems. It is only a summary of crimes as reported by local authorites. When police departments want more funding, they can make crime go up.  When they need to look successful, they can make crime go down. 

For example, burglary is a felony because by definition it is two crimes: (1) breaking and entering (2) with intent to commit a felony.  But the easy solutions is for the burglar to admit to the B&E, and the prosecutor will drop the felony.  The perp gets jail, not prison; and the wheels of justice grind on.  

The National Crime Victimization Survey is a random sampling report about harms and wrongs, about half of which never come to the attention of police. Bearing in mind the limitations, it is still interesting that as the economy worsened, the UCR showed a general decrease in all crimes (except rape and sexual assualt in some cities), and especially so, regarding burglary, larceny, theft, and other property crimes.  Even though we are in the worst depression in three generations, property crime is decreasing.  

People do not steal out of need or vengeance.  They steal from greed and opportunity.

ALSO ON NECESSARY FACTS
Hacking Computer Security: BSides Austin 2013
Locksporting
Shifting the Paradigm of Private Security
Misconduct in Science and Research


Some theories to explain crime:
The Classical School, The Positive School, The Chicago School, Rational Choice, Routine Activities, Lifestyle Theory, Cognitive Theory, XYZ Chromosome, Sociobiology, Differential Conditionality, Social Learning Theories, Modeling/Imitation, Differential Association, Differential Identification, Differential Reinforcement, Social Learning Theory, Psychoanalytic Theories, Moral Development Theories, Criminal Personality Theory, Social Strain Theories, Strain Theory, General Strain Theory, Social Disorganization, Anomie Theory, Subculture Theories, Culture Conflict Theory, Subculture of Delinquency, Cloward & Ohlin's Differential Opportunity, Focal Concerns, High Delinquency Areas, Subculture of Violence, Labeling Theories, Tagging, Primary & Secondary Deviance, Developmental Career Model, Radical Non-Intervention, Social Control, Containment Theory, Social Bond Theory, Techniques of Neutralization, Low Self-Control Theory, Peacemaking , Reintegrative Shaming, Radical, Feminist, Conflict Theories:, Crime, Sex, Inequality & Power, Marxist Theories, Social Reality, Liberation Theory, Opportunity Theory, Power-Control Theory, Instrumental Theory.


For essays in objective (rational-empirical) criminology, follow the links on my criminology and sociology website, Washtenaw Justice.

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