Tag Archives: deterrence theory

Fines and revenue

But punishment must by definition hurt in some way, be it emotionally, psychologically, monetarily, or physically. Punishment must cause pain. (Peter Moskos 2011, In Defense of Flogging, p.114.)

In modern legal systems fines and imprisonment are the most common penalties which can be imposed on crimes. In classic criminology three functions of punishment have been described since the 18th century: deterrence, rehabilitation and incapacitation. The latter category seeks to disable a criminal from committing another crime in the future, be it through imprisonment or execution. In case of rehabilitation, the aim of “punishment” is to reform the criminal, so he will no longer be willing to commit crimes.

It’s quite obvious that fines or monetary penalties at best can only serve as a deterrent, fines do not incapacitate or reform criminals. Additionally we could argue that fines serve a retributive aim of punishment, as expressed by the quote by Peter Moskos. However, in order to function as a deterrent a punishment should be considered by the would-be criminal as unpleasant.

Deterrence theory is not without severe criticism, but monetary penalties suffer from another “flaw” in this respective. In most legal systems fines are expressed in absolute terms, i.e. the law prescribes a fixed (maximum) sum of money to be paid for a certain offense. The problem of this is, from the perspective of deterrence, is that different people have different levels of wealth.

Suppose that a certain action, say not cleaning up your dog’s feces in public space, is punished with a fine of 50 Stella. Both Alice and Bob have a dog, and as good dog keepers they regularly walk their dogs. But Alice has a monthly income of, say, 5,000 Stella whilst Bon only earns 3,000 Stella. Assuming both person need 1,500 Stella to live from, Alice has 3,500 Stella to spend freely and Bob 1,500.

Now we know that neither of them really like to clean their dog’s feces, and being rational persons they estimate how many times they can afford to pay the fine. Alice can afford 70 fines a month and Bob only 30. Consequently Bob would be more willingly to comply with the law, because one fine constitutes a larger part of his income than it does for Alice. Basically for Alice a fine is (subjectively) cheaper than for Bob.

This example clearly shows a problem with fixed fines from the perspective of deterrence theory: people with higher incomes will be less deterred by fines. At least this would be the case if we assume that deterrence is indeed a valid concept, which is at best only partially the case. But even from a pure retributive point of view, there’s a problem: poorer people are punished more severely by fines than their more affluent fellows. Though fines might be equal to all, but their effects aren’t.

In a normal market this would not be necessarily a bad thing, only criminal law is not meant to be an ordinary market of goods and services. Certain acts are banned because they are harmful to others, and consequently no one is allowed to commit these acts regardless of their wealth. If fines should be part of our legal system, than we should equalize the effects of this kind of punishment. In other words we should make fines dependent on the income of the offender.

One method to establish income dependent fines is by introducing day-unit fines. The basic idea here is: if we put you in jail for one day, you can’t work for a day. Hence you won’t earn any income on that day. More importantly if we put a rich person or a poor person in jail for a day, the unpleasantness for both of them is more or less the same. However instead throwing people in jail, we could just as easily give them a fine equal to their income of one day.

This approach is called the day-fine or unit-fine. One unit is equal to one’s income of one day, and in the law the fine is not expressed in terms of precise monetary amounts, but in terms of such units. In our example this could be for example a fine of unit for not cleaning the feces of your dog, instead of a fine of 50 Stella.

Another important issue related to fines, what to do with the revenues raised by collecting fines? One thing would be to use this money just to fund the government, but this would lead to a perverse incentive to politicians: in order to fill their gaps they will simply resort to increasing fines, regardless of whether this would affect crime in any way.

A better proposal would be in our eyes to put this revenue in a fund for the victims of crimes. This idea is related to the concept of restorative justice. We could use this fund directly to pay financial compensation to crime victims or indirectly. A slightly different idea would be to use this money to undo the effects of crime or to use this money for crime prevention programs.

Reflections on deterrence theory

Before we continue, we want to make a clear statement. It’s without doubt that social-economic factors play a key role in the occurrence of crime. As such improving social economic conditions and better education will be of great importance to reduce crime rates in future space settlements. However, even with proper social economic condition and subsequent low crime rates, some people will still turn to crime.

In modern theory on criminal punishment the concept of deterrence is a predominant one. First introduced by Enlightenment philosopher Cesare Beccaria, and latter refined and defended by English philosopher Jeremy Bentham, deterrence theory assumes that criminals are rational actors. People commit crimes because they believe they will gain more than they will lose from these acts, and because the criminals believe that crime is the easiest way to get these gains.

According to deterrence theorists, the purpose of punishment is then simply to cancel the gains acquired by crime. In other words, due to punishment the costs of a crime will be greater than the expected gains (from the criminal’s perspective). Confronted with such an analysis  a rational person will decline to commit crimes.

If deterrence theory would be “true”, then we should expect that the mere threat of punishment would be sufficient to eliminate crime. But since it’s evident that despite the prospect of harsh punishments, crime is still an important problem in almost every society. Therefore defenders of this theory are facing a difficult challenge, since it seems that deterrence has failed in its objective.

As always the truth is these matters, is a little bit more complex than simply true or false. Let’s therefore look at the fundamental assumptions made by deterrence theory. First, defenders of the theory can make the following point. In order to be effective, the threat of punishment has to be credible. Aspirant-criminals has to believe that the government is willing to carry out the punishments it imposes on certain crimes. If however, the law provides high (maximum) punishments but courts hand out only lesser punishment, then criminals will less likely be deterred from committing crimes. This is even stronger the case if there will be no prosecution at all, and hence no punishment. Therefore simply raising punishments will not necessarily results in less crime.

Empirical evidence further shows that the probability of being caught is a more important consideration in deterring people to commit crimes than the severity of prospective punishments. Since we all know that the police cannot solve each and every committed crime, there’s always a chance that a criminal will get away with his or her crime. Consequently a rational aspirant-criminal will consider how likely it will be that the police will be able to arrest him or her, and the particular punishment (s)he might receive is only of secondary importance. Even if a criminal risks the death penalty, (s)he might still commit the crime if that person believes that the chance of being caught is quiet small.

Instead of raising the amount of punishment, governments should improve the quality of the police to solve crimes and to arrest criminals. The more crimes the police can solve, the less the probability of getting away with crimes will be. But again we hit a problem. Criminals do not act upon the actual probabilities, but on their perception of these chances.The authorities should provide the real probability of being caught, but it should also take care that potential criminals will believe those numbers.

This leads us to the most fundamental assumption of deterrence theory. Deterrence requires that all all people are able to rationally weigh the gains and losses of their actions. Unfortunately, we know that humans have a wide range in intellectual capabilities. Scientific studies have shown that the less intelligent a person is, the more likely it is that he will commit a crime. Less intelligent persons will have more difficulties with understanding and handling complex stuff such probabilities, and the impact of prospective punishments, than their more intelligent fellows.

There is no easy way to improve people’s intellectual capabilities, it would be great if there would be a drug which could raise your IQ with 20 points. In the absence of such drug, we have to face that a substantial part of the population might not be persuaded by the threat of punishment.