Distinguishing Between Theft and Recycling

As copper prices rise, an arbitrage opportunity appears.  If you can find scrap metals, you can sell them for a high price.   Thieves know this and they looking for loose wires.   “Near-record prices for copper, platinum, aluminum and other metals have spurred a resurgence in the past several months in the theft of common items that in better economic times might be overlooked — among them, catalytic converters from automobiles and copper wiring that is being stripped out of overhead power lines, tornado warning sirens, coal mines and foreclosed homes, where thieves sometimes tear down walls to get to copper pipes and wiring. The thieves then make quick money by selling the items to scrap yards.”    

One way to address this concern is to remove the anonymity of market transactions. “California enacted a law in 2009 requiring people selling copper wire or catalytic converters at scrap yards to be photographed, have their driver’s license copied and wait at least three days for payment.”  This makes sense to me but I don’t see how this “origination information” allows the police to trace the evidence to the crime.

Author: Matthew E. Kahn

Professor of Economics at UCLA.

9 thoughts on “Distinguishing Between Theft and Recycling”

  1. There is no “arbitrage” here–it is straight selling.

    The ID requirement probably doesn’t usually help you catch them, but it might deter them from selling in the first place, impressing upon them the thought that their actions are traceable.

    Most scrappers are repeat customers; having a paper trail of how much they have sold without a legal source of supply should make getting a conviction easier. It also could help the policy target the biggest offenders. And sometimes they do steal identifiable stuff and then the ID would help catch them.

  2. I think that Matthew Kahn might have the wrong target in mind. This statute appears aimed more at the junk dealers than the thieves. They lose an innocence defense as receivers of stolen goods if the cops inform them that their customers are habitual criminals. (I’m not sure about the significance of the payment delay, however.)

  3. Well, if you arrive at a scrapper with a bunch of blue aluminum siding and get it weighed and get a voucher for $160 in three days, and the cops get a report of a house stripped ten miles away they can (1) check if the siding in question is the right size, has distinctive trim etc., (2) do some fingerprints, and (3) be waiting when the you come back for your money. Not so good for copper pipes, wires, but for distinctive and custom crafted stuff, it will help.

  4. This definitely ties in with other issues such as methamphetamine use. In Oregon, we’ve had problems with people defacing historical monuments by stealing plaques and the like, and I recall reading about somebody trying to steal the wiring off a power transformer station, which predictably didn’t end well for him. It sounds like Oregon’s meth policies are working at least somewhat, though.

  5. Matthew: One way to address this concern is to remove the anonymity of market transactions.

    Another way to fix this problem is to tax the rich like Ike did, and use the proceeds to create desired future industries to actually employ Americans.
    After all, no one roots around illegally in dirt for copper if they have a better choice.

    Chances are good that the people stealing this copper and doing it merely to supplement the income of their family.
    Give a family member a decent job and you remove the incentive for the ridiculous “employment” of stealing copper.

    This is the smart capitalists approach to fixing the problem.
    The smart capitalist tries to make rules that uplift the poor.
    Rather than treat them like proven criminals, to be stamped, photographed, and id’ed before they can sell anything at the dump for a few cents…

    Although I do find the following observation wry:

    Where copper comes from at a dump is an alarming issue requiring heightened security and non-anonymity…
    While many people, whose houses are being foreclosed, have no idea who owns their mortgages because of a lack of security and anonymity…

    Remember the saying: The little gonif gets the noose, the big gonif the fat goose.
    If that doesn’t describe American in 2011, what does?

  6. Thieves have taken sprinkler vacuum breaks from the sides of homes for the copper where they can get $30 or more. This caused the pipes to break at one 91 year old lady’s house, flooding her home, destroying her photographs and scrapbooks, and inflicting $40,000 of damage as her basement filled with two feet of water. No doubt the thieves in this case felt justified in what they did; after all, they needed the $30 more than she needed the $40,000.

  7. Around here, the police will tell you that our metal thieves are mostly meth addicts. That opinion is at least somewhat supported by the fact that metal theft went way down as unemployment went up. Without a doubt that was because prices fell drastically at the front end of the recession but you’d think if you doubled the supply of potential thieves desperately trying to feed their families that even low prices wouldn’t have caused the huge drop-off in metal theft that we saw here.

    I believe Mark has mentioned here before that, contrary to common wisdom, crime doesn’t necessarily go up during bad economic times.

    It appears that normally law-abiding people are not all that likely to become criminals simply due to short-term economic pressures.

  8. The origination information can help police because we then get information on who is selling lots of copper. In my jurisdiction, most of the copper comes out of vacant houses (we have something like a 15% vacant rate). So you see that Johnny with a burglary history sold $200 worth of scrap copper, then you can set up some guys to follow him around until he breaks into a vacant house to strip it.

    Also some copper wiring is distinctive, so you would be able to match up the person with the crime.

Comments are closed.