by Shihang

Here’s a thought. The major forms of punishment in society nowadays are fines, incarceration and occasionally death. But for the majority of crimes, largely fines or incarceration.

Fines are a regressive form of punishment, in the same way flat taxes are regressive, i.e. they impact the poor more than they do the rich. This is not merely an abstract problem of fairness. Because of this, fines are more effective as a deterrent to the poor than to the rich. It is easy to see how a summons for a twenty dollar parking offence will matter more to the family living on 600 a month than one living on 6000.

Interestingly, incarceration, on the other hand, is more punitive to rich people. In one sense, they take up an equal amount of the person’s time. You may even argue that it takes up more of the poor person’s time, given that the rich have access to better healthcare and hence usually live longer. But one year of incarceration leads to a higher absolute loss of income (opportunity cost) for the rich person.

A simple enough analysis. But I think it gets interesting once you consider diminishing returns to utility. The incarceration of a family member earning 40% of the household income can be considerably more disastrous than the loss of 60% income if the resulting changes in utility is greater. For example, if the mother in a poor family loses her job, losing 200 dollars of the family’s 800 dollars a month income. This 25% fall in income will lead to significant cutbacks in more basic things, like food, clothing and power. Compare this to a family that loses 2000 out of 10000 or 1 out of 5.

So here’s the thought. Our current punishment methods are inherently unfair. If there is to be an equivalent penalty exacted for an offense regardless of income levels, perhaps progressive fines or even jail terms may make sense.