The Case Against Efficient Punishment

One way of choosing among different forms of punishment is by how much it costs to impose a given cost on the criminal. Consider first execution. The cost to the criminal is one life. That is also, if we ignore the salary of the hangman or the electric bill for the electric chair, both trivial in comparison, the total cost, so the ratio of total cost to amount of deterrence is about one. The same would be true for a corporal punishment such as a flogging.

Next consider imprisonment, one of the two common forms of criminal punishment in modern societies. The cost to the criminal of a five year sentence is five years spent in prison. The cost to the rest of us is the cost of running the prison. Total cost, ours plus his, is the sum of the two, so the ratio of total cost to amount of deterrence is substantially more than one. Imprisonment is a more inefficient punishment than execution or corporal punishment, since it costs more to produce the same amount of deterrence.

The other common punishment in a modern criminal system is a fine. The convicted criminal pays a thousand dollars, the legal system collects a thousand dollars. Cost to the criminal a thousand dollars, total cost zero. Ratio of total cost to amount of deterrence zero.

Judged on that basis a fine is better than execution is better than imprisonment so why do we not punish all crimes with fines? One obvious answer is that not all convicted criminals can pay a fine large enough to produce the amount of deterrence we want for their crime.

Larry Niven, in the story “The Jigsaw Man,” offers a solution to that problem, a fine that takes the form of confiscation of the criminal’s organs. Legally speaking it is an execution, but one in which the cost to the criminal of losing a life is balanced, perhaps more than balanced, by the benefit to the rest of us. The criminal convicted of a capital offense would have been executed anyway and once he is dead he has no further use for his heart or kidneys. Obviously an unambiguous improvement.

The economic approach to law views it in terms of the incentives that legal rules create and the actions that result. That ought to include the incentives and actions of everyone affected, including whoever collects the fine or receives the organs. Niven’s proposal has no effect on the incentives of the criminal but gives everyone who might some day benefit by an organ transplant an incentive to support making more and more crimes capital.

Including, as we see at the end of the story, dangerous driving.

Consider the same point applied to an ordinary fine. Punishing a crime with a fine instead of imprisonment looks like an unambiguous improvement, provided the criminal can pay. If he cannot pay, perhaps he can be compelled to work off the fine. That too looks like an unambiguous improvement. We impose the same cost on the criminal, perhaps three years of prison labor instead of five sitting in a cell. With luck his labor pays us for the cost of the prison, perhaps with something left over.

A very long time ago I proposed something along those lines in an online argument. The person I was arguing with responded that the colonial powers in Africa used that approach. When they wanted a road built they found some excuse to arrest and convict a bunch of the locals and sentenced them to labor building the road.

His application of economics, and Niven’s, was more sophisticated than mine. In considering the effect of a legal rule you need to think about the effect on everyone, including the people enforcing the rule.

For a modern version of the problem, consider civil forfeiture. Under current law, property used in a crime forfeits to the state. The defendant is the property, not its owner. The owner need not be convicted, need not even be even suspected, of a crime, since the property could have been used without his knowledge or permission. If he wants to get the property back it is up to him to go to court and show, by a preponderance of the evidence, that it was not used in a crime.

Police departments, like the rest of us, can always use money. You are driving somewhere far from home, carrying with you fifty thousand dollars in cash that you intend to use to make a down payment on a house. A police officer stops you, claims he saw something suspicious in how you were driving, searches your car and finds the money. He concludes that the only reason you would have that much cash on you is as part of a drug deal, so seizes the money. He helpfully points out to you that you are of course free to go to court — in his town — and try to prove that the money was for a legitimate purpose. Also that the police department, in order to win the case and keep the money, will charge you with being a drug dealer, giving you two, not one, cases to try to win. If, on the other hand, you let them keep the money, they will have no need to arrest and charge you.

This is not, unfortunately, a wholly fictional story.

For a longer and more detailed exploration of the issue, see my “Why Not Hang Them All: The Virtues of Inefficient Punishment,” published in 1999. Larry Niven published his version in 1971.

[For more examples of literary works with economic insight see Embedded Economics]

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