THE furious mob descended at daybreak on two youths who had terrorized the neighborhood. Bearing stones, steel bars, and wooden poles, the crowd beat one to death and left the other badly wounded. The scene in April marked the fourth incident of vigilantism reported in Caracas, the capital of Venezuela, this year. Five alleged criminals have been killed, one a young teenager. A further attempt to kill an alleged criminal was halted by police just last month. ''We had tried before because we are tired of these criminals, but they always escape. This time, we had the opportunity to do something,'' a woman who was at the attempted murder was reported as saying. With unemployment at 17 percent and with 73 percent of households reported to be poverty-stricken, Venezuela's crime rate is skyrocketing. The oil-based economy saw flush times in the 1970s. But prices fell in the 1980s, along with the economy. Last year the inflation rate was 70 percent, one of the world's highest. This year it's expected to be between 50 and 70 percent. Similar incidents of mob killings are expected to follow in this city where residents have lost faith in the overburdened, underfunded justice system. A government crackdown began last month using a law that allows police to arrest loiterers. But violent crime continues largely unchecked. Although officials claim that murder rates have fallen slightly from a high of 384 a month last year, the rate of reported thefts - including many armed robberies - is 5 percent higher than in 1994, which saw a total of 183,000. ''I think that the people have reached a moment when they feel they have to take justice into their own hands,'' says National Investigations Commissioner Jorge Hernandez Guzman. Justice Minister Ruben Creixems says the vigilante-style killings are an effort by the people to fill the gap in a justice system riddled with corruption. By July this year, 750 police officers had been fired for taking bribes to boost their average $200 monthly salaries. Some 2,400 complaints have been filed against judges. Meanwhile, Mr. Creixems points out the difficulties of protecting a city of more than 4 million with just 9,000 police on patrol. ''I haven't had a bullet-proof vest in years, but I've been shot at many times,'' says Inspector Jose Martinez on patrol one Friday night in July. His squad is responsible for a seven-square-mile area of barrios, or slums, sprawling over the hills in western Caracas. The squad of 10 runs up a stairway cut into the side of a hill that is impossible to drive up, then weaves through a maze of alleyways. By the time they reach the aptly named Pistol Corner, four policemen have gotten lost in the maze. ''It's difficult for us to work in such a rabbit warren,'' Mr. Martinez says as he locks up two children without identification for the night. They look innocent enough, but Martinez tells of one 12-year-old he picked up who had committed 18 murders. It's a quiet weekend for a city that normally locks up 50 murder suspects a weekend. Many of those murders are a result of increasing drug use in the barrios, where adolescents carrying out vendettas think nothing of killing each other for a pair of shoes. One recent report claimed that 150 people had been killed this year for their designer footwear. In a new twist to armed robbery, up to 10 buses a day are being held up at gunpoint. People have been shot for not having enough money. Thieves are also spilling over into downtown Caracas. One expatriate had three Blazer jeeps stolen in a matter of months, while staff in the local Reuters news office were earlier this year robbed at gunpoint. Those who are caught stealing are left for years in the country's overcrowded jails, where 92 percent of the inmates are poor. Caracas's Catia jail holds 2,500 prisoners in space meant for 700; only 80 have been sentenced. ''In Venezuela, it's important how much you rob, because you need to steal enough to pay bail and to corrupt the judge,'' Creixems quips.