Bank Robberies and Rational Crooks

By Timothy D. Terrell
September 29, 2002

The robbery last week of a bank in Norfolk, Nebraska, was shocking because of the unusual bloodshed, not because bank robberies are uncommon. Every year in Nebraska, several dozen banks are subjected to a robbery or burglary. In 2000 there were about 7,500 bank robberies, burglaries, and larcenies in the United States. Normally, these crimes are pulled off with no injuries or deaths.

What is particularly remarkable about bank robberies today is that there are far more of them than there were a century ago, even after accounting for the increase in population. But wait! Wasn't the United States plagued by bank robberies in the late 1800s and early 1900s? Wasn't this the Wild West era, when gangs of armed men in black hats would routinely plunder banks in small western towns? Not quite. Historians Larry Schweikart and Lynne Doti, in their study of banking in the "frontier west," found that western bank robberies were almost nonexistent in the "Wild West" period. Over the four decades from 1859-1900 in 15 states (including Nebraska), there were only about half a dozen bank robberies. As Schweikart has noted, bank robberies began to be a serious problem in the western United States only in the 1920s, when the automobile allowed criminals to quickly cross the state line — and when the physical security of banks became less important to their success.

Were law enforcement officials more effective in the frontier West? Probably not. They had more territory to cover, without benefit of the automobile, radio, or telephone to assist their efforts. They could not fax photographs of suspects nationwide in minutes, as can be done today, or benefit from security camera tapes. Were people simply more honest, and therefore less likely to commit crimes? Certainly the amount of money banks spent on safes, reinforced buildings, and armed guards testifies otherwise.

Has the criminal mind changed in the last 100 years, so that crooks are more willing to run the risk of robbing a bank? Perhaps, but it might be best to rule out the possibility that committing bank robberies has simply become easier for criminals over time. In other words, the amount of work a bank robber performs, and the risk taken, is less for a given payoff than it would have been in the American West of 1890.

It may seem strange to think of a person calculating economic costs and benefits that are associated with a given criminal act, but is it really so improbable that a robber would consider the risk of being caught and punished, or killed in the act, with the expected value of the loot? Even a so-called "crime of passion," in which the calculation is likely to be brief and incomplete, is not totally separated from such considerations. Would a jealous, enraged husband be likely to reconsider killing his adulterous wife's companion if a police officer happened to be on the scene? Would a crack user, knowing that the drug has a tendency to make him behave carelessly and violently, be less likely to use the drug if the penalties for assault, battery, and murder are significantly increased?

Schweikart has argued that would-be bank robbers were deterred in the frontier West by the formidable physical security measures taken by banks. The obvious security of a bank was attractive to depositors, and bank advertisements would highlight the strength of the vault and the value of the bank building itself (an asset which could be sold for cash should the bank run into financial trouble). As banks fell under increased state and federal regulations, which purported to ensure bank stability, "the bank building, and the physical manifestations of safety became less important." Banks could be robbed without suffering a loss of trust, so banks could afford to be less careful about security.

Vaults were, of course, routinely opened during the day, or a bank manager could be forced to open the vault at gunpoint. Robberies in broad daylight were deterred, however, by the distinct possibility that the thieves would be apprehended, either in the bank or shortly after leaving, by ordinary citizens. As Schweikart pointed out, "under the best circumstances, few gangs could ride into a town where almost every adult male was armed, walk inconspicuously to the building in the middle of town, and escape with everyone shooting at them."

Today, of course, bank robbers can be comforted by the high probability that the only weapons in the bank, other than their own, are in the holsters of bank security guards. Guards are uncommon in most banks today anyway, and those that are present are usually conveniently uniformed so that the robbers can easily identify the threat. In most areas, it is legal for a person to have a firearm at their own place of business. Yet the number of potential threats that a bank robber faces is still limited, until the police arrive.

Expanding the number of potential threats a criminal must face will increase the costs of committing crimes, and thus have the effect of deterring criminal activity. The larger the number of threats, the more uncontrollable the situation becomes for the criminal, and the less likely it is that the crime would be attempted. This is one reason that many states have begun legalizing the concealed carry of firearms. A concealed firearm is more effective because it produces what economist John Lott has called a "halo effect" — even those who are not actually carrying firearms could, as far as the criminal knows, be capable of effective resistance. "Because the guns may be concealed, criminals are unable to tell whether potential victims are carrying guns until they attack, thus making it less attractive for criminals to commit crimes that involve direct contact with victims." Lott's research has shown that adopting concealed — carry laws significantly reduces crimes that involve contact with a victim-such as homicide, assault, or rape.

Nebraska happens to be one of those states that will not allow citizens to carry a concealed weapon. Thus far, attempts by Nebraskans to pass laws that would allow law-abiding citizens to carry a concealed weapon with a permit (laws like those 33 other states have passed) have been thwarted. As it is, people like those who robbed the Norfolk bank continue to carry concealed weapons. One of the robbers was, in fact, ticketed for having a concealed weapon the week before the robbery.

As I argued in an earlier article on this site (" Authority and Force"), the civil government has often worked to prevent private citizens from using physical force to protect themselves. In contrast to the modern state's attempts to acquire a monopoly on power, the Bible provides the individual with a right to use force in the defense of himself or others (Exodus 22:2; Luke 22:36-38). By seeking an unbiblical monopoly on power, the state sets the stage for increased violence and theft in society.


Doti, Lynne P., and Larry Schweikart, Banking in the American West: From the Gold Rush to Deregulation (Norman: University of Oklahoma Press, 1991).

Lott, John, More Guns, Less Crime: Understanding Crime and Gun Control Laws (Chicago: University of Chicago Press, 1998).

Schweikart, Larry, "The Non-Existent Frontier Bank Robbery," Ideas on Liberty, February 2001.

Topics: Culture , Government, Justice, Statism, Theology

Timothy D. Terrell

Timothy Terrell is associate professor of economics at Wofford College in Spartanburg, South Carolina. He is assistant editor of the Quarterly Journal of Austrian Economics and is an Associated Scholar with the Mises Institute.

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