In the SuperFreakonomics chapter on global warming, we describe pollution as a negative externality, a cost that is generally borne by someone other than the party producing the waste. In so doing, we discuss the difference between two anti-theft devices for cars, the Club and LoJack. Because LoJack is a hidden device and thieves cannot therefore know which cars have it and which don’t, it cuts down on overall theft. Which means it produces the rare positive externality. The Club, meanwhile, works in the opposite manner:
The Club is big and highly visible (it even comes in neon pink). By using a Club, you are explicitly telling a potential thief that your car will be hard to steal. The implicit signal, meanwhile, is that your neighbor’s car – the one without a Club – is a much better target. So your Club produces a negative externality for your non-Club-using neighbor in the form of a higher risk that his car will be stolen. The Club is a perfect exercise in self-interest.
Having read this passage, a man named Jim Burns wrote in with an interesting background story:
Back in the ’90s, I was working as a design engineer for Chrysler. I had responsibility for key cylinders and door latches. At that time auto theft rates in Europe were increasing and driving the insurers to put pressure on the Euro governments to require increased theft deterrence devices on all new cars. As part of our attempt to figure out where best to invest our design dollars, we hired some professional car thieves to provide a more hands-on perspective than us engineers had (well, maybe not all of us).
At some point, the Club was mentioned. The professional thieves laughed and exchanged knowing glances. What we knew was that the?Club is a hardened steel device that attaches to the steering wheel and the brake pedal to prevent steering and/or braking. What we found out was that a pro thief would carry a short piece of a hacksaw blade to cut through the plastic steering wheel in a couple seconds. They were then able to release The Club and use it to apply a huge amount of torque to the steering wheel and break the lock on the steering column (which most cars were already equipped with). The pro thieves actually sought out cars with The Club on them because they didn’t want to carry a long pry bar that was too hard to conceal.
Ah, the beauty of unintended consequences. And do not pass too quickly over the fact that a car company hires car thieves for consultation. If you are a businessperson, do you regularly engage those who wish to do you harm? If you are an intellectual, do you regularly sit down with those who wish to call you names?