In reaction to the threats of the Joker, Bruce Wayne first classifies him as a criminal like any other, and that the key to defeating him would be in understanding just what it was the Joker was seeking. Alfred, Bruce's loyal aide, didn't believe this to be the case, suggesting that the mob did not fully understand the man that they had hired.
To relate Alfred's instincts on the matter, the butler went on to explain how, during his youth, he had attempted to assist the government of Burma in uniting several tribes by bribing them with valuable gems. Unfortunately, these attempts were thwarted by a bandit within the forests who had been raiding the caravans. For six months, Alfred and his allies failed to discover the identity of the man or his motivation, until at last they came upon a boy who was "playing with a ruby the size of a tangerine." Rather than use the stolen gems to trade, the bandit merely discarded them after his raids.
It was then that they discovered this bandit was not motivated by greed or any rational political objectives. Alfred went on to suggest that he was simply a man who enjoyed causing destruction for its own sake, making sense of it with the phrase, "some men just want to watch the world burn."
Later, in a moment of mourning the loss of his childhood friend, Rachel Dawes, Bruce turns to Alfred and asks if the bandit he mentioned was ever caught. Alfred confirms he was, but only by finally burning the forest he was hiding in down. This unethical action made Bruce realize to catch someone as dangerous and clever as the Joker, he would also have to take an unethical approach, which he did by creating a sonar machine to turn every phone in Gotham into a microphone and sonar.
The Burmese bandit was never physically in the film, but was simply a background story of Alfred's to assist Batman.
Behind the Scenes
- Since Alfred is normally a straight forward and honest man, it is unlikely that the story of this bandit is simply an allegory, but a real life situation.