Why we should punish white-collar criminals more severely than violent criminals

by Alan Cohen



Most of us subscribe to a model of crime and punishment in which we punish criminals with a severity proportional to the nature of the crime, and in particular proportional to the nature of the depravity or bad intentions required on the part of the criminal to commit the crime. This makes intuitive sense – we want to see criminals get their just deserts, and those are very different in the case of a shoplifter and a serial rapist-murderer.

This is, however, a very individualistic perspective that takes into account individual criminals and their intentions and victims. True to form for this blog, I will present a counter-individualistic alternative: that we need to consider much more carefully the larger societal implications of how we punish criminals. More specifically, I argue that we should develop a series of punishments that do not necessarily fit the crimes, but that are best suited to minimizing the impacts of crime on society. A politician who takes a bribe may be more sympathetic than a serial killer, but, indirectly, his action can cost more lives and harm society much more. His punishment should reflect this. The formula I propose: the punishment should fit the large-scale societal impact of the crime, inversely weighted by the probability of getting caught. I’ll explain…

Why do we punish criminals? The list of reasons I remember from high school debate class includes 1) Retribution, 2) Incarceration as prevention, 3) Deterrence, 4) Rehabilitation, and 5) Restitution.  This is a pretty exhaustive list, and I think it provides a good starting point. Depending on the situation, the importance of these different factors may change. For example, #2 might be particularly important for a serial pedophile, whereas #4 is more important for a drug addict. The one thing I’d add to the list is that rehabilitation can go in both ways – prison is often anti-rehabilitative in that it increases the likelihood of becoming a career criminal (and of learning how to be a better criminal).

I don’t really much like retribution as a rationale for punishment. I wish we as a society could have moved beyond “an eye for an eye.” Revenge may be a natural human instinct, but it is not an admirable one. But society will not accept that criminals who commit heinous crimes go without severe punishments – even if none of the other reasons might apply. So I would suggest to leave the minimum amount of retributive punishment necessary to satisfy the “victims rights” segment of society.

However, I think most criminal law has systematically underestimated the importance of rationale #3, deterrence. There are certain crimes we have a very strong interest in deterring, and others that we have less interest in deterring. For example, what are the consequences of smoking pot, writ large? Well, you increase the probability that you will be a health care burden to society. Through social contagion, you may encourage your friends and acquaintances to do the same, and some of them (or you) may go on to harder drugs. You provide money to a criminal underworld which is responsible for murders, corruption, and fueling drug addiction among the vulnerable. All this is real, and yet the joint that you smoke is a miniscule drop in the bucket of all this. We need tens of millions of people smoking thousands of joints to add up to all those societal ills, so the contribution of any given pothead on any given day is minimal at best.

Contrast this with a Wall Street trader who commits insider trading or breaks some arcane SEC regulation. It’s not clear who the victim is, and the Wall Street trader may have simply made money at the expense of other already-rich traders. But that trader is also contributing to a culture of excess on Wall Street, and the collective actions of traders can have a huge impact on society. Contrast the impact of the financial crisis on society with the impact of pot smoking on society and you see what I mean. Now add to that the fact that all the harm of the financial crisis is due to a small number of traders (thousands, maybe?) and you see how big the per-individual impact is.

Similarly, consider a politician who takes a bribe – let’s say a company wants a law written to favor its ability to pollute a river without consequence, and in return provides a luxurious second home for a key congressman. And let’s say that long-term, this increased pollution leads to increased cancer rates in the area, and thousands of excess deaths. Yet we would prosecute the politician for corruption, not murder, even though his acts indirectly caused thousands of unnecessary deaths. In fact, the cancers would take long to develop, and no individual cancer would necessarily be incontrovertibly linked to the pollution, so there probably wouldn’t be any way to ever pursue more than a corruption charge. But that doesn’t mean the congressman isn’t morally responsible for thousands of deaths, whatever his intentions…

So my basic argument is that white-collar crime – notably political corruption and financial crimes – have a much larger impact on society than violent crimes. Most of this crime probably goes undetected, and as a result it’s not always clear what the long-term impact of any given crime is, nor what the societal toll of this crime in general amounts to. But it’s certain that providing a strong deterrent to white collar crime could have a major effect on improving public policy and financial security.

There are two other important aspects to consider in developing a deterrent system. First, some crimes are detected and prosecuted at much higher rates than others. My guess (not really sure) is that bank robbers and murderers have a relatively high probability of getting caught, whereas shoplifters and white-collar criminals have a low probability. If you want to build an effective deterrent, you either need to have a high probability of catching the criminal, or you have to have a very severe punishment. Accordingly, the harder a crime is to detect, the more severe the punishment should be (as long as there is a reasonable expectation of deterrence).

Second, some crimes are more “deterrable” than others. White-collar criminals tend to be motivated by calculated greed, so deterrents should work particularly well for them. Violent crimes – particularly crimes of passion or those committed by sexual predators – are probably much less amenable to deterrents because they are committed precisely at the moment when rational consideration of consequences disappears.

So where does all this leave us? Well, we should severely punish white-collar criminals because (a) their crimes have a disproportionate impact on society; (b) the chances of catching them are small, so we need a severe punishment to inspire fear; and  (c) they are likely to be motivated by calculated greed, and thus are likely to respond well to the disincentive of severe punishment.

Imagine, for example, that we imposed life in prison without parole as the minimum sentence for accepting a political bribe, or even for circumventing certain rules that help prevent corruption… (I know, I know – many of you are thinking that with Citizens United and SuperPACs in the US, corruption is legal. You’re right, but it doesn’t make my argument less valid in general.)

The flip side of this is that we should give much less severe punishments to those who are unlikely to be deterred and those whose actions – even when grievous on a personal level – have little larger impact on society. This post is already long enough, so I’ll explore some of the related issues another time!