Point Click, Fire: An Undercover Investigation of Illegal Online Gun Sales

[DanTex]

142. "All economies are demand driven"

Statements of the form "all ________ are ________" are usually mistaken, and this is no exception. The size of any market is governed by both supply and demand. What you seem to be missing is that demand is not just a static quantity, but rather a function of price.
http://en.wikipedia.org/wiki/Demand_curve

The often-repeated talking point, that "criminals will always get guns", refers to what economists describe as "zero elasticity of demand" -- this is a vertical demand curve, so the quantity demanded remains exactly the same no matter what the price. In reality, this occurs very rarely, and, as with many NRA talking points, there is no evidence at all that criminal gun markets exhibit zero elasticity of demand, or even that the elasticity is particularly low.

With respect to criminal gun markets, "price" refers not just to dollars, but also to the hassle and risk involved in acquiring an illegal gun. Gun control laws aimed at reducing the supply of illegal guns result in a higher "price" in this sense, and so some criminals will find the gun is no longer worthwhile and instead spend the money, effort, and risk on something else. A common misconception is that just because criminals are criminals, they must be irrational, but actually, criminals respond to incentives like anyone else.

A great example of all this is your confident prediction about what would happen if Japan liberalized its gun laws. Currently the "price" of a gun in Japan is very high, and as you point out, demand is low, but the fact that demand is low when price is high doesn't tell us much at all about what would happen to demand if price were much lower.

For example, suppose Japan had gun shows where anyone could buy a cheap handgun with no background check and basically zero risk. A much more likely scenario than what you describe is that, if the "price" were lowered in this way, a fair number of Japanese criminals would in fact find that a gun is now a worthwhile acquisition.