Part F-I
The Economic Theory of Crime
and Punishment
Introduction
Traditional Theory of Criminal Law
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Objectives
There are two fundamental questions:
1.
What acts should the state punish?
2.
To what extent should a given act
be punished?
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Introduction
We are now considering an area of
Public Law
Why are these issues not simply
handled as part of tort law?
Historically they were included as part
of the ‘common law of crimes’
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‘Common law of crimes’ has been replaced by
‘criminal statutes’
- criminal law has been codified
Both the common law of crimes and the more
recent criminal statutes are premised on the
traditional theory of criminal law
embodied in legal tradition and scholarship
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Traditional Theory of Criminal Law
1. Intended wrongs (crimes) versus accidental wrongs (torts)
2. Public nature of harm (in addition to the private tort)
3. The plaintiff is the state not a private individual
4. The standard of proof is higher in a criminal matter as
opposed to civil action
5. A guilty defendant is punished, as opposed to simply
making restitution (making the victim whole)
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Broadly, the traditional theory is based on the
simple notion:
‘if someone does something wrong and
they are found guilty, they should be
punished and they should be punished in
proportion to the seriousness of their
crime’
The traditional theory focuses on the individual
and the act.
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This is not a good starting point for the economic
analysis of crime.
Economic theory focuses on societal welfare (takes
the perspective of society as a whole
Very simply economic analysis of crime starts with:
An act should be made a criminal act if doing
so enhances ‘social welfare’. An act should be
punished to the extent that deterring that act
maximizes ‘social welfare’.
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Criminal Intent
Accidental harm vs. intentional harm mens rea
‘a guilty mind’ - Scale of Culpability
thoughtful
careful
thoughtless
negligent
mens res
reckless
intentional
cruel
0
1
blameless
Legal standard
of precaution
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at fault
guilty
Civil wrong vs.
criminal wrong
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Public Nature
Property, contract and tort law generally deal with
private harm imposed by one individual on
another
In criminal law more of the harm is of a public
nature.
- a murderer kills his/her victim but also
causes a general increase in fear and a loss of
a sense of security for all members of society.
Three points:
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1. This ‘public’ nature of a criminal act is why in criminal law
the plaintiff is the ‘the crown’ (the government) as opposed
to the specific person harmed in the criminal act (victim).
In civil law the ‘victim’ is always the plaintiff
Traditionally the victim had very little, or no role in the
prosecution or punishment of the crime (mostly as a
witness).
More recently the victim might be consulted on charges to
be laid and might a give ‘victim impact’ statement at
sentencing – might even be compensated
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2. The notion that criminal acts harm the general public allows
for the possibility of ‘victimless crimes’ (drugs, gambling,
prostitution).
- parties to these transactions enjoy mutual gains
(economic theory would find no basis for such acts being
classified as crimes)
- traditional theory of crime argues that there are
victims (‘society as a whole’) whose peace and security is
threatened (morality, public health, social welfare costs)
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3. What if someone ‘attempts’ to harm another but fails.
- there is no loss, no actual injury, no basis for a tort
- but traditional criminal theory argues that the ‘attempt’
to harm causes a fear and loss of security - the attempt
should be punished, even if it failed
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Standard of Proof
Standards of proof
Civil case – ‘preponderance of the evidence’
(plaintiff is more convincing than the
defendant - just tips the scales of
justice) - 51%
Criminal case – ‘beyond a reasonable doubt’ (clear
and convincing evidence) 95%/99%
Why the difference?
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Traditional Theory of Criminal Law
– Standard of Proof
1. Convicting an innocent person seems worse than letting a
guilty person go free (Type I vs. Type II error).
Hypothesis (H): Mr. X is guilty
Accept H
(convict)
Reject H
(don’t convict)
H is true
(guilty)
Correct verdict
Type I error
H is false
(not guilty)
Type II error
Correct verdict
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The higher the standard of proof, the smaller the
likelihood of committing a Type II error
(convicting an innocent person)
but the greater the likelihood of committing a Type I
error (letting a guilty person go).
Society’s standards in this respect vary over time
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2. The prosecution in a criminal matter can bring
the full force of the state (prosecutor/police/etc.)
and all its resources down on the defendant
- heavier burden of proof helps to offset this
advantage
Note that at times private individuals can
bring considerable resources to the court room
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Traditional Theory of Criminal Law
– Punishment
Punishment:
- Incarceration (jail)
-
Restriction of movements (bail terms, house
arrest, etc.) could be almost anything – no
alcohol, no computers
-
Fines
-
Corporal punishment - beatings, mutilation,
death
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Compensation in civil law aims to restore the victim
to his/her previous level of well-being.
Punishment in criminal law is intended to harm the
injurer but without making the victim better off.
(There is some very slow movement in this area.)
In principle, punishment and compensation might
be substitutes or both could be imposed.
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Perfect compensation: a sum of money that makes
the victim indifferent as to having suffered the
injury or not having suffered the injury.
Consider:
Perfect disgorgement: a sum of money that makes
the injurer indifferent to having caused the injury
or not having caused the injury.
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In criminal law, monetary punishment (fines) are intended to
be a sum of money that makes the potential criminal prefer
to not commit the crime
- intended to remove whatever incentive the potential
criminal has to commit the crime
Aside: given the above, does a schedule of fixed fines ever
make sense?
Speeding ticket of $200 or
- 1% of income
- 5% of the value of your car
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Traditional Theory of Criminal Law
– Some Problems
Traditional legal theory of crime:
- does not provide a model of predictive behaviour
(it aims to control behaviour but does
not explain the behaviour itself)
- does not provide a clear objective for criminal law – ‘stop
people from doing bad things’
(no guidance as to what should be criminal)
In what follows we will try to:
- distinguish between civil and criminal prosecutions
- develop a predictive model of criminal behaviour
- propose a clear objective for criminal law (Surprise
Surprise - minimize the social costs of crime).
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