TABLE OF CONTENTS INTRODUCTION 2515 I. RATIONAL DETERRENCE POLICY AND CRIME 2519 A. Neoclassical Deterrence Theory 2523 II. PUBLIC CHOICE AND CRIMINAL LAW ENFORCEMENT 2526 III. TYPES OF PUNISHMENT REGIME 2532 IV. THE CASE FOR LIMITING THE SCOPE OF CRIMINAL LAW 2534 A. Markets and Criminal Law 2535 B. Public Choice and Scope Considerations 2540 C. Business Conduct 2548 V. THE CASE AGAINST PRISON 2554 A. Public Choice and Prison 2560 VI. SHOULD PENALTIES BE USED TO FINANCE ENFORCEMENT? 2565 CONCLUSION 2572 INTRODUCTION
Economics and criminal law have long been viewed as odd partners. Economics stresses rationality and has been referred to at times as the science or study of rational choice. (1) Criminal law, by contrast, often applies to subjects who do not appear to behave rationally. (2) Criminals are thought to behave impulsively, and there is even genetic evidence suggesting a tendency toward impulsiveness among convicted violent criminals. (3) One recent study suggests that the propensity toward criminality is strongly related to one's psychological ability to postpone gratification, an ability that appears to be formed early in life. (4)
People who are suspicious about the application of economics, or more generally about a "rational incentives framework," to crime would probably fear that such a framework would generate ineffective punishments by doing a poor job of taking into account the weak link between rationality and the behavior of criminals. (5) One possible shortcoming is that the rationality model might lead to the imposition of outrageous punishments, such as those proposed by Jeremy Bentham, to make sure that the punishment system catches the attention of potential criminals. (6) Alternatively, the rationality framework might generate harsh punishments to make up for the risk of nondetection of criminal activity. (7) Another possible distortion, in the opposite direction, is that a rationality framework might counsel in favor of weak punishments, or no punishments at all, on the theory that it makes no sense to punish a criminal after the crime has been committed, because the crime is a sunk cost in relation to society's welfare after it has occurred. (8)
This Article sets out a comprehensive account of rational punishment theory and spells out its implications for criminal law reform. Specifically, what offenses should be subjected to criminal punishment, and how should we punish? Should we use prison sentences or fines, and when should we use them? Should some conduct be left to a form of market punishment through private lawsuits? Should fines be used to fund the criminal justice system? (9)
The answers I offer address some of the most important public policy issues of the moment, such as mass incarceration and the use of fines to finance law enforcement. The Department of Justice, in its report on Ferguson, Missouri, concluded that the unfair use of fines as a method of financing the local criminal justice system violated civil rights laws, (10) in addition to giving rise to anti-police protests during 2015. (11) The issues are broader, however, than reflected in the current unrest over criminal law enforcement. In antitrust enforcement, a topic that generates few if any street protests, there is a current problem of multiple punishments and even multiple prison sentences imposed on firms and employees who violate competition laws. (12) Some have called for more rationality and coordination in global antitrust enforcement. (13)
The problems at the heart of the current unrest over criminal law enforcement and concerns raised in antitrust enforcement require a reexamination of some of the same fundamental issues. A reform plan should be broad enough to address both sets of complaints. However, a reexamination of fundamental issues requires a theoretical framework capable of addressing such issues. My aim is to offer such a framework, mainly by unifying some disparate approaches that already exist in the literature. The framework of this Article is firmly grounded in rational deterrence policy, and yet points toward reforms that would soften or reduce the scope of criminal punishment. Specifically, the suggested reforms would oust criminal law from the regulation of many market exchanges (for example, marijuana sales), sharply limit the use of prison as a form of punishment, and place stringent conditions on the use of fines to finance law enforcement.
This Article's framework integrates the standard model of rational criminal deterrence, which had its first flowering in 1764 through the work of Cesare Beccaria, (14) with public choice theory, (15) which emphasizes the incentives of enforcement agents. (16) The standard model on its own implies optimal limits, often overlooked, for the scope of criminal law enforcement. Part of the contribution of this Article's framework is in identifying optimal scope limitations implied by standard deterrence theory. Public choice theory reinforces and adds to these limitations, helps explain anomalous features of law enforcement (such as the occasional hobbling of enforcement agents by corruption), and offers reasons for policing the optimal scope limitations to ensure that self-interested enforcement agents do not push the scope of criminal law beyond its optimal boundaries.
One of the goals of the rational incentives framework is to take criminal law policy-theorizing away from arguments that point to the essential nature of the offender, an argument that easily drifts into theories of genetic or cultural determinism. Such theories are often unhelpful as guides to state policy, especially in the area of criminal law. The rational incentives framework views criminals and noncriminals as essentially the same, and controlled by the same incentives to seek advantage for themselves. It is the goal of the state to ensure that the incentives set up by the offender's environment, including the law, do not encourage socially undesirable behavior. In every instance in which such behavior is observed, this framework starts with the presumption that it can be attributed to rational incentives.
RATIONAL DETERRENCE POLICY AND CRIME
The rational model of punishment has been around for quite a long time. (17) I will make no effort here to rehash the theory in detail. Instead, I will briefly review the theory and move directly into its application.
The rational incentives framework began with Beccaria and Bentham and stressed the elimination of the prospect of gain to the criminal. (18) While this is not a surprising proposition, their arguments began a revolution in thinking on criminal law enforcement. Beccaria single-handedly introduced Enlightenment thinking into law enforcement policy. Like other Enlightenment thinkers, Beccaria dispensed with notions that normative judgments should be determined by tradition or references to what seemed appropriate in the Old Testament. (19) He replaced this traditional mode of thinking, in the area of criminal law jurisprudence, with a rational incentives model that posited that the purpose of punishment is to deter crime. (20) Punishment should therefore aim to take the gain out of crime, but not more than the level required to eliminate the gain. (21) Harsher punishments, in Beccaria's view, worsened crime by inducing correspondingly harsh views on the part of the public and of potential criminals. (22)
The mechanism by which harsh punishments would coarsen criminals was not clear in Beccaria's account. Beccaria suggested that harsh punishments reflected a set of unforgiving norms adopted within society, and that those norms infected the punished as much as the punishers. (23) Under this theory, criminals, seeing that they would be harshly dealt with, would find no reason to be lenient toward their victims. (24) Each victim, in a sense, represented the state that promised to torture the criminal, and therefore could be treated badly as a matter of reciprocal dealing. Punishment, in Beccaria's framework, therefore included a component that sought to educate the punished and to inculcate a type of civic virtue. (25)
Bentham continued with Beccaria's project but merged it with a theory of preferences and a sharper focus on incentives. Bentham gave more thought to the types of punishment necessary to eliminate the prospect of gain. (26) For example, given the impulsiveness and low rationality of criminals, Bentham thought it important to have punishments that were "characteristic" of the crime itself--so that a rapist, for example, would face the prospect of castration, or a thief the prospect of having his hands cut off. (27) Bentham also introduced the theory of marginal deterrence as a justification for moderating punishments. (28) Under this theory, punishments should be moderated to the level necessary to eliminate the gain, because otherwise the punishment itself could induce more destructive behavior. (29) For example, if the punishment for purse snatching and murder were the same (execution), a purse snatcher who believed that he would be executed would choose to murder his victim to make it easier to take the purse. The marginal deterrence theory offered an alternative to Beccaria's comparatively fuzzy educational theory of punishment, and one that generated specific implications for the level of punishment.
This Classical deterrence model has been at the core of rational punishment theory since the contributions of Beccaria and Bentham. By focusing on gain elimination, both theorists indicated that punishment authorities should attempt to individualize punishments to the characteristics of the offender. (30) Both indicated that punishments should be more severe as the probability of detection declined. Both indicated that punishment should be more severe as the distance in time between offense (receipt of gain to the offender) and punishment increased. (31) The differences were in fuzzier areas. Bentham...