Intelligent public decisions regarding such expenditures require knowledge of the costs generated by crime as well as potential benefits to be derived from criminal justice expenditures. However, before the concept of cost of crime can be effectively dealt with, some precise definitions are required. Crime is thus defined as an activity that generates an uncompensated external cost. This cost, defined as that incurred by a party who is not a consensual participant to an activity, is a component of the social costs of crime (that is, the reduction of societal well-being generated by crime.) These definitions now permit a statement of the purpose for the criminal justice system -- to minimize the social costs of crime. Concern with the economic impact of illegal activity is not a recent concern, the first major study having been published near the turn of the century. Although ensuing studies (i.e., the Wickersham Commission's study in 1931) have improved upon earlier efforts, they have generally been hamstrung by the divergence between prevailing concepts of crime and the definitions amenable to cost considerations. Thus, dollar magnitudes of estimates remain suspect, and much additional work remains to be done. Graphs, footnotes, and 17 references are included. (Author abstract modified)