Size of Punishment to deter the crime?

[faethor]

http://www.sciencedaily.com/releases/2011/10/111014095629.htm

An idea I always backed is punishment for a crime is relative to the value the entity holds. When a company is big enough doing something bad isn't a concern if it has minor impact to the bottom line. So having a limit of damages doesn't make sense. On one hand you could put the local Mom&Pop out of business for polluting but the same sized penality to BP doesn't have much of an impact. This is, simply math, that $100K fine to a company that profits in the Billions doesn't matter. Afterall how long would you cry over losing $40 out of your $40K/year salary? You'd complain but you'd rapidly forget about it and move along.

 

[FluffyMcDeath]

This reminds me of something that I have for many years complained about and that is the injustice of fines versus prison. (putting aside the already significant advantage that the rich have in the legal system).

The legal system likes fines. Fines bring in money whereas jail costs money, but when you jail a poor man for a year and you jail the rich man for a year it costs them exactly the same - one year. Any jail time is a significant deterrent because of the loss of autonomy. However, for someone very poor prison may actually lead to an increase in autonomy - a different discussion.

Now, when a rich man and a poor man are both arrested for sleeping on a park bench and are fined $100, the poor man now owes more than he has whereas the rich man's investments may have produced several thousand dollars of unearned income during the time he was being processed by the police.

Obviously the most effective deterrent to sleeping on a park bench is the fact that it requires you to actually sleep on a park bench so let's instead assume that the guy on the bottom end has a job and can at least afford a car.

Now let's make the rich guy just CEO in a tech company (instead of insanely wealthy) with a base of $600k and bonuses that roughly match. The poor guy is a Wallmart greeter at about $18,000. Both get a $100 speeding ticket.

The greeter has been fined 6 2/3 % of what he will make in a month (or 10 hours).
The CEO has been fined 0.1% of what he makes in a month (or 9 minutes).

These two offenders appear to be punished the same - the sum of one hundred dollars - but the cost of the punishment is clearly different.