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What Economics Can Teach Us About Batman


Mike Pottenger

By

January 13th, 2013


Despite his overwhelming success in the box office, Batman has some serious questions to answer about his capacity to exact lasting change on the corrupt city of Gotham.


In The Batman Handbook, Scott Beatty sagely advises that to be as good a crime fighter as the world’s greatest detective, you need to ‘Learn everything you can in every discipline, no matter how obscure’. His list of essential subjects, however, does not include economics. This is a tragic oversight, not just because I’m saddened to hear that Batman might not have learned economic theory, but because economics suggests that Batman himself is not the solution to Gotham’s crime problem. Why? Three reasons.

 

1. Batman does not deliver the best bang (kapow?) for your buck.

Economics tells us that if you want to make a choice, you need to consider the opportunity cost: the value of what you give up to get what you choose. So what’s the opportunity cost of having Batman? The Centives team came up with an estimate of how much it costs to be Batman – $2.8 million (US) – though they conflate variable operating costs with fixed start-up costs. They also seem to underestimate those start-up costs. They put it at $2.5 million, but don’t include things like (1) kitting out the Batcave, which on its own could push things closer to $5 million, or the fact that (2) a tragic childhood incident that spurs a person on to become the nightmare that lives in the hearts of evildoers is arguably priceless. Regardless, these are sunk costs associated with becoming Batman. Assuming he’s already around, how much does it cost to be Batman for, say, a year?

In tallying up the cost of being Batman, I’ll take the Centives estimate that puts the cost of Alfred at $262,800. I think they’re understocking Batman’s batarangs and tactical explosives, so I’m going to go with what I see as a pretty conservative 30 batarangs and 10 tactical explosives (for distractions and quick escapes) per month. Add these to Alfred, round them off and you’re looking at about $300,000. Even this is overly conservative, as it doesn’t account for other expenses such as, for example, (1) the lavish parties that Bruce throws in order to play the part of the playboy millionaire socialite (2) fuel, ammunition and countermeasures for the various vehicles, not to mention replacements for those vehicles, (3) medical supplies, including high-tech knee braces that can cure limps, and (4) ongoing research and development of new gadgets, such as a giant supercomputer that can monitor everything and everyone all the time, a heavily armoured low-altitude jet, a bike with impractically massive tires, or a fusion reactor. Let’s be generous and assume that Bruce manages to do all this and pay all his other general living costs (let’s face it, Wayne Manor would not be cheap to heat) for no more than another $600,000, bringing the total cost of being Batman to around $900,000 per year.*

So what is the opportunity cost of Batman? Well, to take one example, Peter Parker is a freelance photographer, who’d earn around $30,000 per year (this is the current US Bureau of Labor Statistics estimate of the median salary of a photographer, and given that that’s for full-time photographers, not freelancers, it’s fair to assume Parker would be at or below the median). So the opportunity cost of one Batman is 900,000/30,000 = 30 Spider-Men. Gotham’s policy makers might well ask themselves which it is better to have. (Note: though a fair comparison should consider the setup costs of creating a radioactive spider to bite thirty Peter Parkers, I’ve had trouble finding even rudimentary data on this – I’m open to evidence that suggests this would be prohibitively more expensive than the setup costs of Batman).

*Edit: Struck out after Twitter exchange with @antipodeecon – see comments for details.

 

2. Batman is unlikely to affect the equilibrium level of crime.

Gary Becker’s now (in)famous paper “Crime and Punishment: An Economic Approach” suggested that ultimately the decision to break a law boiled down to weighing the costs and benefits of doing so, where the costs were influenced by the penalty if caught and the risk of getting caught. So, if we compare Gotham with Batman to Gotham without Batman, what is the difference in terms of the risk of getting caught? Well, Batman’s just one guy, in a city of – according to The Dark Knight – 30 million people.

Wikipedia tells me that New York City’s crime rate per 100,000 people in 2010 was 2256.5. Assuming Gotham is at least as bad (and bearing in mind the New York rate of 2256.5 is from well after crime rates plunged due to Mayor Giuliani the legalisation of abortion the removal of lead from petrolor did they?) that means Gotham has to deal with 676,950 crimes per year, 1854.66 per day. Even if you limit it to violent crimes (Bats doesn’t tend to go after petty thieves) you’re still looking at nearly 478 crimes per day. Assuming Batman puts in some overtime and stops, say, 10 crimes a day, as a criminal you’re still only looking at a little more than a 2% chance of getting caught. What’s more, behavioural economics suggests that people are pretty bad at evaluating risk, and interviews with some criminals (e.g. drug smugglers) have indicated that they often underestimate the real risks they face. In short the risk of being caught by Batman is pretty low, and may be further discounted by Gotham’s criminals due to their inaccurate estimates of that risk. As such, his presence is unlikely to have a great effect on their perceived risk of being caught.

But even if the chance of being caught by Batman is slim, the penalty if caught is huge, right? Well, not really. That is, not relative to the penalty of just being caught by the police. Sure, you might take a beating, but Batman doesn’t kill, and you’ll end up in jail just as you would if the police caught you. I hear some of you objecting here – Gotham’s police department is notoriously corrupt (more on this below), and so officers on the beat might easily look the other way and not arrest you, whereas Batman will haul you in (or string you up by the ankles). Perhaps, but the corruption of the justice system stretches to the jails, too. Even if you are caught by Batman lands you’re likely to be out of jail again pretty soon thanks to a crooked guard.

So, in short, having Batman doesn’t substantially increase the risks of being caught or the penalties if caught committing a crime. We shouldn’t, therefore, expect him to have much of an effect on Gotham’s crime rate (if anything, we should anticipate a spate of daylight crime as criminals substitute away from night-time crime after realising that Batman, like most monsters, mostly comes at night). And this just reinforces the importance of the opportunity cost of Batman noted above: assuming Spidey can catch as many crooks as Bats on a daily basis, thirty Spider-Men would net you 300 of Gotham’s 478 violent crimes per day. The thing is, although this is a much better deal for your superhero dollar, ultimately the money would be better spent improving law enforcement to stop the crims getting out once they’ve been caught.

 

3. Without institutional reform, no superhero can keep Gotham safe

As an enforcement mechanism, Batman is clearly constrained by diseconomies of scale. The recruitment of various sidekicks over the years has had only a marginal impact on his capacity to fight crime. As a result, targeting the big villains might seem like a reasonably efficient strategy of expending effort – like China’s approach to anticorruption of ‘hunting tigers’ rather than ‘swatting at flies’. But in Gotham this approach quickly degenerates into a game of whack-a-mole, with another supervillain popping up shortly after the last has been dispatched. Of still greater concern is that the impoverished institutions of Gotham so often render all of Batman’s work for nothing. Just as crooked cops look the other way rather than arrest, and guards on the take let minor criminals walk from jail, if Batman throws a crazy supervillain into Arkham Aslyum they’re likely to be out again in no time (particularly when Arkham’s lax personnel hiring procedures allow for a maniac like Dr Hugo Strange to be appointed to run the place).

Systemic crime of the kind that grips Gotham is not the result of a few bad apples, but rather of a bad orchard. It is inextricably linked to the widespread police corruption and state capture that plagues Gotham, neither of which are the sort of things that can be fixed by taking out a few key players. Much like in Levitt and Venkatesh’s tournament theory of drug dealing, there’ll always be someone else ready to fill their place. Admittedly, Bruce shows some interest in promoting change and reform through lobbying and fundraising for Harvey Dent, but I’d have to agree with the good people over at Centives, who aptly note that the controversial theories in Acemoglu and Robinson’s Why Nations Fail suggest that if the institutions are broken it might not matter much who is in charge. And while Olson would note that a centralised authoritarian tyrant might be preferable to a bunch of roving bandits, ultimately chaos would return to Gotham as soon as Dent’s reign was drawing to a close. Perhaps, in the absence of a legitimate, overarching authority, Gotham should turn to those familiar with the work of the late, great Ostrom, to see how groups of individuals can in fact rise above problems of collective action in an otherwise anarchic environment? Nowhere in her extensive research did Ostrom point to the need for one central figure, whether wearing a mask or a D.A.’s suit.

Frankly, without proper investigative oversight bodies tasked with monitoring the integrity of the police, the legislature and the judiciary, and without some change in the incentives (perverse or otherwise) that drive the criminal activity and corrupt the apparatus responsible for making and upholding the law, the institutional structure of Gotham will never let Batman exact lasting change. Institutional reform is the remedy that Gotham deserves, and the one it needs right now. Vigilante justice is not. Unfortunately, Gotham may be beyond help.

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

  • Monika

    I concur wholeheartedly, and think that TDKR especially put forward the hypothesis that gross social inequality and corruption were the true root of Gotham’s problems. This was evident in the Occupy Gotham style rioting, and Bastille style storming of the prisons and the kangaroo court style ‘Tale of Two Cities’. Nolan himself doesn’t seem convinced that Batman can add much (as proxied by Alfred) and seems to want him to retire or help with infrastructure or philanthropy like his ‘rents.

    But US superheroes always favour right wing type solutions – complex issues like crime or terrorism can be solved with expensive discrete acts of violence, right?

    • Mike Pottenger

      I trust you’ve seen this?

  • http://www.linkedin.com/pub/dean-pagonis/1b/117/319 Dean Pagonis

    Fantastic first up piece Mike, I really enjoyed it.

    As you would know, good policy making requires a thorough analysis of all the options out there. This is especially important when it comes to important issues such as crime.

    I would like to know – are you planning to look into other super heroes to see their relative effectiveness as compared to Batman and Superman? I am happy to drum up support amongst ESSA members to push our beloved unimelb economics department to provide some funding for further research!

    • Mike Pottenger

      Well, it has always struck me that the X-Men manage to scrape by based on their economies of scope…

      • http://www.linkedin.com/pub/dean-pagonis/1b/117/319 Dean Pagonis

        The Incredibles also benefited from scale economies, and diversified powers across the family. Great use of the family unit as a figure of strength to fight crime.

  • Monika

    Yeah I dug TDKR. Especially since it seemed to suggest that without any overarching villain to be scapegoated for people’s dissatisfaction, the dissatisfied city itself could turn villain. I thought Selina Kyle’s journey from anarchist to a kinder notion of redistribution and equity perhaps was an important one in making this point.

    While we are on the topic of Nolan and economics, interestingly The Dark Knight also had a classic prisoner’s dilemma but suggested that playing a dominant strategy is what evil gits do!

  • Monika

    I am not surprised. This goes to the more basic but complex question of whether some of the core principles in economics lead us to over-estimate the extent to which self-interest predictibly and rationally motivates the actions of others. I don’t think this question will be resolved in my lifetime.

  • Mike Pottenger

    On Twitter, @antipodeecon pointed out some concerns with my idea of opportunity cost here, suggesting that Bruce ‘had always had the mansion and Alfred’.

    It’s true that the costs of running the mansion would be there regardless of whether Bruce was Batman or not, so I’ve struck those out (though I still think $600,000 is a pretty conservative estimate for the rest of those costs).

    But I’m going to assume that in this day and age of economic rationalism, if Bruce were to throw in the cowl he’d probably cook his own dinners with all the new spare time he has and, despite the family attachment, would let Alfred go. So I’m going to keep Alfred in the calculations (if you think that Bruce would instead recognise the comparative advantage in having Alfred cook while he specialised in something else, then even without Alfred you could still have around 20 Spider-Men for every Batman).

    It’s also worth noting, given that even economists have trouble understanding the idea of opportunity cost, that I’m talking here about an opportunity cost of production – specifically, of ‘producing’ a reduction in crime, as is commonly used in basic models of trade.

  • Batman Himself

    Mike Pottenger, you are 100% accurate my dear friend.
    Batman

  • Spider-man

    You have seem to forgotten the cost and value of the R&D that went into the radioactive spider that bit me. On top of that, it was originally an accident. If it were deliberately developed, it would cost even more.

    • Mike Pottenger

      Ah, but I didn’t! See the last paragraph of section 1. Plus, how much could it cost, really? Chuck a huntsman down a uranium mineshaft and BAM! Done.

  • Pingback: Melbourne Economist: Batman Is A Waste Of Money, Spider-Man Is Way More Cost Effective | Kotaku Australia()

  • Pingback: How Much Does It Cost To Be Batman? | Gizmodo Australia()

  • Mike Pottenger

    For those still playing at home, over at Gizmodo, ssri37 has found this estimate of the the costs of Batman.

    While the total conflates different costs, it puts the Batcave fitout at $600,000,000, and Bruce’s training and education at around $1.7m, which is a much higher estimate of the fixed costs of becoming Batman.

  • rationalist

    Great piece but I have a few questions/concerns to raise.

    Batman chose to go into crime fighting as a semi-altruistic gesture. The costs that go into funding “Batman” are his alone to bear and he appears to gain some satisfaction (loosely used) from it.

    let’s consider, the type of criminals batman deals with (call them if you will, super criminals)as the branches of a tree of crime and the petty thieves, the leaves/twigs. Batman, goes after the super criminals largely because he feels obligated to and in some cases is motivated by vengeance and leaves the small time criminals to the police.

    Something else to consider is the hope aspect that batman renders to Gotham city (possibly priceless). And finally, what is the alternative to Batman, assuming that a comprehensive legislative change to the institutional structure of Gotham city isn’t made?

    Would love to hear your thoughts/comments on these.

    • Mike Pottenger

      ‘The costs that go into funding “Batman” are his alone to bear and he appears to gain some satisfaction’

      If we assume Bruce’s utility is a function of the reduction in violent crime he is able to achieve, then arguably he’d derive greater utility from employing 30 Spider-Men than he would from fighting crime himself. Of course, if his utility is increased more as a result of the cathartic feeling of beating to a pulp a never-ending array of thugs that remind him of his parents’ attackers, then he’s not going to get that out of paying others to do it. This is a tricky one.

      ‘Batman, goes after the super criminals largely because he feels obligated to and in some cases is motivated by vengeance and leaves the small time criminals to the police.’

      Absolutely. This is why (a) with the crime figures stuff I restricted it to violent crimes of the kind Bats would seek to prevent by way of avenging his parents, and (b) in the third section I point out that even targeting supervillains is unlikely to have a lasting effect on Gotham’s problem without serious institutional reform.

      ‘Something else to consider is the hope aspect that batman renders to Gotham city (possibly priceless).’

      The symbolic value certainly shouldn’t be underestimated. But just how much hope would seeing the bat signal in the clouds offer to the citizens of Gotham if week after week it’s projected into the sky and they see little or no change to their daily lives? I’m guessing people could even end up becoming quite cynical about Batman unless he gets results.

  • Scott P

    Hi – awesome read.Congrats.
    One question (and this may be out of the scope of this paper), but has any thought gone into the cost arising from destruction of property when performing superhero duties ? (especially compared to say Spiderman since you have compared other costs to him). However, since we are generally dealing with a mad maniacal tyrant in most cases it is likely that any cost should be able to be justified.

    • Mike Pottenger

      Well worth thinking about. I’ve often wondered how much it costs the City of New York to clean up all that webbing that Spidey must leave hanging about.

  • http://www.Centives.net Anjan

    Hi Mike,

    I’m Anjan, I helped write the Centives article on the cost of becoming Batman. Just wanted to say this was really well done and a fascinating read!

    Anjan

    • Mike Pottenger

      Glad to hear it, Anjan – feel free to link to it in a follow-up post for your readers over there, of course!

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