A Fine is Punishment, Not a Price

Yesterday Roger Stone was sentenced to 40 months in prison, followed by 2 years on probation, as well as mandatory drug testing, 250 hours of community service, and a $20,000 fine for lying to Congress and witness tampering. Crimes such as those strike at the load-bearing walls of our political system, and thus out to be taken seriously and punished severely. So which of these punishments is most severe?

It is rhetorical, Captain.

Prison, obviously. American prisons are terrible, and I can't imagine that even for a high-profile non-violent offender a stay at "Club Fed" will be pleasant experience.

Okay, but of the rest which is most severe? The fine? $20,000 is a lot of money, right?

Ehh, maybe not for Stone. Though at present his net worth stands at around $50,000, he was once a millionaire, and since he's been and will be a good little hack, I'm sure wingnut welfare will provide for him just as it has the likes of Dinesh D'Souza after he's served his time. Remember, (social) consequences are for little people. But if you're famous, they let you do it.

No, I imagine after prison itself the harshest punishment is the indignity of community service, of mandatory drug testing, of having to answer to a probation officer. Stone strikes me as a narcissist, and $20,000 dollars to a man who no doubt thinks of himself as a temporarily embarrassed millionaire. is far less precious to him defending the belief that he is special against all evidence to the contrary.

All of this brings me to the topic of punishment. Consider the rational-agent model of crime. I am aware of its limitations, but for a calculated, pre-meditated "white-collar" such as this I think it is quite appropriate. Anyways...

A rational agent decides to commit crimes when they judge the expected utility of committing the crime to be positive, that is (assuming punishments impose dissutility):

Probability(I get away with it) * Utility(Doing the crime)  - P(I get caught) * U(the punishment) > 0

From this we come to the conclusion that if you want people to not commit crimes (or at least white-collar crimes, which are from a dollar perspective more costly than blue-collar crimes) you need to either raise the probability of getting caught or raise the costs of of punishment (I suppose you could also lower the benefit of doing the crime, e.g. protecting yourself from theft by owning nothing worth stealing, but that seems like an unpopular option).

We create disutility by harming people. We harm their bodies (though this has largely gone out of fashion), we restrict their liberties, we impose social sanctions (whose costs are frequently overestimated. People often fear social death more than actual biological death - I know I do!), and of course we cause them material economic harm by taking away some money.

There is something profoundly egalitarian about the first three forms of punishment. Each of us has only one body to suffer in, to be caged, to be shunned. We all have, as an economist would say, equally endowments, and so with harms of that nature it is straight-forward (although perhaps not easy in practice) to harm people fairly, to ensure that the same hurts will always be inflicted in retribution for the same crimes.

Ahhhh, but money is different. We are not equally endowed with it. To fine a rich person $100 is a nuisance, the greatest part of the punishment is the nuisance in dealing with it. The same $100 fine could break a poor person.

And so at last we get to the title of this post:

A fine is a punishment, not a price. To function justly and effectively as punishment it must impose not the monetary cost on everyone but the same disutility, the same economic harm. Fixing this is an attainable goal. American governments - state, local, and federal - could simply copy the practice of scaling fines with income from, say, Switzerland.

There are, of course, arguments against this. Some of these will be empirical (given higher costs of fines, more people will contest - would this lead to a net cost for society), some the usual claptrap (I image the phrase "punishing success" will be used), and some of them will be solid, principled, reasons coming from those who never used them before when they could defend the poor (it creates perverse incentives to finance government through expropriatory fines rather than regularized taxation).

As this is a blog post, I can't address them here without making this longer than you'd care to read, so I won't. If you want more in this vein, you can always leave a comment.