Recent events pose a challenge to conventional neoclassical economics. I refer not to the financial crisis, but to a fat Geordie's attempt to twat a police horse.

This seems to undermine the standard economics of crime, as developed (pdf) by Gary Becker. This says that people will commit crimes if the expected benefits outweigh the costs. Such a theory, however, doesn't fit two big facts. One is that many crimes, such as twatting p.hs, are just moments of madness. The other is that many people eschew crimes even though they might well get away with them. These two facts can co-exist in the same person; if we take our fat Geordie at his word, he has "never been in trouble before."

However, a new paper by Matteo Cervellati and Paolo Vanin of the University of Bologna helps to explain such behaviour.

They start by recognizing weakness of will, that we are tempted to do things we'll regret. This introduces a role for morality. It works as a self-commitment device; "thou shalt not steal" stops us breaking into people's houses if we see the window open.

Such moral codes can explain our fat Geordie's behaviour. Whilst they can stop us committing otherwise profitable crimes, they don't always prevent us being stupid in the heat of the moment.

So far, so trivial, you might think. No so. Morality has a cost; it can either prevent us committing profitable crimes or it can impose a burden of guilt upon us if we do so. It follows that parents who care for their children's material welfare will not always want to inculcate into them a strong moral code. If you think your children will be so poor they will starve to death unless they steal food, you'll be less keen than others to tell them that theft is wrong. Or if you think your children will be so rich they can do what they like, there'll be no point burdening them with guilt.

Cost-benefit considerations, therefore, tell us that moral codes will be strongest among what used to be called the middling sorts. Parents who feel their children will be sufficiently poor that they'll be tempted to steal, but also sufficiently well-off that they have something to lose, will be most keen to inculcate morality.

This fits historical stereotypes; the feckless underclass, the dissolute aristocrat, the respectable working class man and the priggish bourgeois are all cliches. But they are cliches for a reason. Cervellati and Vanin use people's attitudes to tax-dodging, fare evasion and benefit fraud in the World Values Survey to show that, indeed, middling classes do have a stronger moral code.

We might add that this also explains why bourgeois morality has so often been accused of hypocrisy. It's because such morality was partly cultivated by self-interest. (I nearly wrote "arose out of" but that pitches it too strong.)

Cynics might think all this is yet another exercise in economic imperialism - an attempt to explain everything with the tools of costs and benefits. But it is hinting at something which might be both true and important - that social norms and moral codes are not (just) exogenous constraints, but are instead economically endogenous. In this sense, neoclassical economics and Marxism agree.