In this paper we present what we believe to be the first systematic study of the costs of cybercrime. It was prepared in response to a request from the UK Ministry of Defence following scepticism that previous studies had hyped the problem. For each of the main categories of cybercrime we set out what is and is not known of the direct costs, indirect costs and defence costs -both to the UK and to the world as a whole. We distinguish carefully between traditional crimes that are now 'cyber' because they are conducted online (such as tax and welfare fraud); transitional crimes whose modus operandi has changed substantially as a result of the move online (such as credit card fraud); new crimes that owe their existence to the Internet; and what we might call platform crimes such as the provision of botnets which facilitate other crimes rather than being used to extract money from victims directly. As far as direct costs are concerned, we find that traditional offences such as tax and welfare fraud cost the typical citizen in the low hundreds of pounds/Euros/dollars a year; transitional frauds cost a few pounds/Euros/dollars; while the new computer crimes cost in the tens of pence/cents. However, the indirect costs and defence costs are much higher for transitional and new crimes. For the former they may be roughly comparable to what the criminals earn, while for the latter they may be an order of magnitude more. As a striking example, the botnet behind a third of the spam sent in 2010 earned its owners around US$2.7m, while worldwide expenditures on spam prevention probably exceeded a billion dollars. We are extremely inefficient at fighting cybercrime; or to put it another way, cybercrooks are like terrorists or metal thieves in that their activities impose disproportionate costs on society. Some of the reasons for this are well-known: cybercrimes are global and have strong externalities, while traditional crimes such as burglary and car theft are local, and the associated equilibria have emerged after many years of optimisation. As for the more direct question of what should be done, our figures suggest that we should spend less in anticipation of cybercrime (on antivirus, firewalls, etc.) and more in response -that is, on the prosaic business of hunting down cyber-criminals and throwing them in jail.
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In a sense, the problem of organized crime is the concept of `organized crime' itself. The implications of shifting the analytical focus from explanations of `it' toward building theories of the organization of serious crimes are considered in relation to three ways of framing research: organized crime as an external threat; the organization of serious crimes through routine activities; and their organization through social relations. Beyond taxonomic assessments of various threats, organized crime groups, their regional theatres of operation and involvement in illicit markets, a major fault-line exists within social scientific studies of the organization of serious crimes over the appropriate scope of inquiry. Specifically, whether this should be limited to the particular settings in which discrete serious crime events occur and/or broadened to encompass the social structural antecedents of these events. This boils down to an argument over what constitutes the necessary relations for the commission of serious crimes for economic gain, and how their contingent concentration in certain places and moments amongst particular populations can be adequately explained. This also suggests that the interplay between more remote `distal' causes, situational opportunities presented by public and private sector controls, and pre-existing networks of relationships have to be understood in combination for an adequate explanatory account of the organization of crimes.
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