Monday, August 6, 2007

The Economics of Security

I walked back past the embassies and judicial building and did snap a few pictures to add to the entry I posted yesterday. In the meanwhile, I've been thinking more about security. Clearly in Ecuador, the fears are different than in America. They obviously aren't terribly concerned about government buildings being attacked. It's a breeze getting on an airplane compared to the US. But on the other hand, as I said, many more businesses have armed guards here. I've started to wonder what portion of the population is employed as police, security guards, and on-the-street military, certainly many times as many as back home. Seemingly, there's a lot more fear of crime, something that, despite gated communities and avoiding "bad neighborhoods," isn't foremost in people's minds in the US.

The question I have, is what effect does "security," either against terrorists or robbers, have on a country's economy. On one hand, it employs a lot of people here. Does the money they spend stimulate the economy? Even if it doesn't generate any wealth, it at least spreads it out among more people. But the problem is that sitting around holding a gun doesn't produce anything. It's a service, but unlike most services you pay for, you don't have anything to show for it. It might prevent a loss, but there are a LOT of people sitting around protecting stuff that doesn't seem to need to be protected in wealthier countries that have more stuff to protect. Is there some other way to protect these interests more efficiently?

You always hear about "productivity" and the necesity of increasing it to strengthen the economy. Security by its very nature is not productive. Would an economy like Ecuador's benefit from somehow reducing crime without paying tens of thousands of young men to sit around creating nothing? Is the American economy threatened by increasing numbers of people being employed to guard obscure places that terrorists have probably never heard of?

I don't have any background in economics, so if you do, please share your insights. I'm curious to read your comments.

No comments: