1. I think we disagree about whether the harms of lawbreaking are mostly internalized. The degradation of social trust in the deliberative process seems bigger to me than the consequences to the individual? As an analogy, shoplifting is an ordinary crime where individuals do face real consequences, but the diffuse harms to consumers and businesses (goods locked up, stores closing) are large and dominate the social calculus.
I don’t think we should speak of “lawbreaking” as a general case in this context; some argue that shoplifting is too lightly punished/prosecuted (especially in eg liberal US cities), but even assuming that’s true, the question remains as to whether the more specific category of say “property damage via protest” is punished too lightly, too harshely, or about right.
My best guess is that it’s not “too lightly” from a purely normie “law and order and human welfare right now” perspective. Many people believe moral-ish things strongly and don’t find property destruction immoral, but far far fewer actually destroy the property of those they think are doing something immoral. This seems like good evidence that the expected punishment (including via informal mechanisms) is not too light.
2. The Pigouvian tax comparison doesn’t quite work here because paying a tax contributes to public resources that can directly address the harms of the act or improve welfare elsewhere, making the net outcome neutral. Going to jail doesn’t repair damaged property or restore trust in the democratic process.
I think we are/were both sort failing to decouple Pigouvian taxes and restitution. My understanding about both how the term “Pigouvian tax” is used in econ and about the real world is that even without restitution, you can get to the socially optimal level of some bad with a tax alone and no transfer to victims.
I think the motivating intuition is that the tax is affecting the amount of eg “social disorder” supplied, but the tax revenue is just a transfer of economic power from one party to another—it’s not creating real wealth that can then be given to the victims. So the same amount of real wealth exists before and after the transfer and a separate question is what to do with that wealth given the state of the world (eg you might think that the very well-off who are harmed slightly by some negative externality, say ambient noise, should not be given restitution and a tax on decibels should really flow to some other party like the very poor)
Many people believe moral-ish things strongly and don’t find property destruction immoral, but far far fewer actually destroy the property of those they think are doing something immoral. This seems like good evidence that the expected punishment (including via informal mechanisms) is not too light.
I think that this is at best weak evidence. Activists’ decisions of whether or not to commit crimes are surely influenced by norms, not just the expected intensity of punishment. The recent history of climate activism in the UK is a good example. As far as I can tell, nothing changed about UK law to cause the rapid rise of high-profile lawbreaking by Extinction Rebellion and then Just Stop Oil in the 2018-2023 timeframe. The UK government did in the end stop the activists through increased legal penalties (going from typically no prison time for nonviolent lawbreaking when motivated by ethical concerns to 4+ year prison sentences becoming common for the more serious cases). But something other than threat of prison time was keeping climate activists from using these tactics in the early-to-mid 2010s.
On (2):
I agree that a Pigouvian tax doesn’t require restitution (as I indicated with including “improve welfare elsewhere” as something that can be done with the tax revenue). But the classical formulation (in which the optimal tax rate fully eliminates deadweight losses) does require that a dollar of consumer/producer surplus and a dollar of tax revenue produce the same social welfare. If a dollar of tax revenue produces less social welfare, then the deadweight loss cannot be eliminated.
To make this more concrete, I want to dig into an example based on your comment about driving in a world with a carbon tax. Consider taking a long trip by car rather than train under 3 different taxation schemes. Let’s assume you value the convenience of the car over the train at $101, the social cost of your carbon emissions is $100, and that all consumers in this world have identical marginal utilities of money.
World A: No carbon tax. You take the trip, gaining benefits you value at +$101 while causing social costs of -$100. In this world, we might say that you’ve done the right thing by driving (since this maximizes utility overall), but that for fairness reasons you might be obligated to donate some money to others, since your utility-maximizing decision also acted as a transfer from others to you.
World B: Carbon tax of $100 on the trip, returned as an equal dividend to all people. You take the trip, gaining net benefits after the tax of $1. The rest of society ends up net neutral (though there might still be particular winners and losers). In this world, you’ve done the right thing by driving, and have no further obligations.
World C: Carbon tax of $100 on the trip, which the government will use to buy $100 of consumer goods and dump them down an old mineshaft. You take the trip, gaining net benefits after the tax of $1. The rest of society still experiences the social costs of -$100, which the tax doesn’t do anything to reduce. In this world, you’ve clearly done the wrong thing by driving, since you caused a net utility loss of $99.
My claim is that doing crimes is similar to deciding to drive in World C. The “tax” on crime is imprisoning the criminal, which causes them to pay large costs in terms of their lost freedom and ability to work and doesn’t do anything to benefit society. And in fact it’s worse than World C, since the rest of society needs to pay the additional costs of arresting, prosecuting, and jailing them. So I think the Pigouvian tax analogy does not hold here, and it’s wrong to think that the harms of crime are properly internalized.
Not addressing every point but I think in some respects I agree that crime is C but then how much benefit the criminal gets/values is a case-by-case question, and we can’t just assume that in the irl case at hand that the benefit is (in the analogy) $101 instead of $1000
There’s real deadweight loss from the mineshaft drop/spending money on prisons, but also potentially real value to be gained from the crime itself (canonical case = speeding bc wife is going in to labor)
Remember, property damage as activism isn’t like simple theft—the property damage can cost society amount $X and benefits of activism feature can separately benefit society or be valued by the perpetrator at any other number $Y
Ok yeah I was using terms too loosely. But still:
I don’t think we should speak of “lawbreaking” as a general case in this context; some argue that shoplifting is too lightly punished/prosecuted (especially in eg liberal US cities), but even assuming that’s true, the question remains as to whether the more specific category of say “property damage via protest” is punished too lightly, too harshely, or about right.
My best guess is that it’s not “too lightly” from a purely normie “law and order and human welfare right now” perspective. Many people believe moral-ish things strongly and don’t find property destruction immoral, but far far fewer actually destroy the property of those they think are doing something immoral. This seems like good evidence that the expected punishment (including via informal mechanisms) is not too light.
I think we are/were both sort failing to decouple Pigouvian taxes and restitution. My understanding about both how the term “Pigouvian tax” is used in econ and about the real world is that even without restitution, you can get to the socially optimal level of some bad with a tax alone and no transfer to victims.
I think the motivating intuition is that the tax is affecting the amount of eg “social disorder” supplied, but the tax revenue is just a transfer of economic power from one party to another—it’s not creating real wealth that can then be given to the victims. So the same amount of real wealth exists before and after the transfer and a separate question is what to do with that wealth given the state of the world (eg you might think that the very well-off who are harmed slightly by some negative externality, say ambient noise, should not be given restitution and a tax on decibels should really flow to some other party like the very poor)
On (1): You say:
I think that this is at best weak evidence. Activists’ decisions of whether or not to commit crimes are surely influenced by norms, not just the expected intensity of punishment. The recent history of climate activism in the UK is a good example. As far as I can tell, nothing changed about UK law to cause the rapid rise of high-profile lawbreaking by Extinction Rebellion and then Just Stop Oil in the 2018-2023 timeframe. The UK government did in the end stop the activists through increased legal penalties (going from typically no prison time for nonviolent lawbreaking when motivated by ethical concerns to 4+ year prison sentences becoming common for the more serious cases). But something other than threat of prison time was keeping climate activists from using these tactics in the early-to-mid 2010s.
On (2):
I agree that a Pigouvian tax doesn’t require restitution (as I indicated with including “improve welfare elsewhere” as something that can be done with the tax revenue). But the classical formulation (in which the optimal tax rate fully eliminates deadweight losses) does require that a dollar of consumer/producer surplus and a dollar of tax revenue produce the same social welfare. If a dollar of tax revenue produces less social welfare, then the deadweight loss cannot be eliminated.
To make this more concrete, I want to dig into an example based on your comment about driving in a world with a carbon tax. Consider taking a long trip by car rather than train under 3 different taxation schemes. Let’s assume you value the convenience of the car over the train at $101, the social cost of your carbon emissions is $100, and that all consumers in this world have identical marginal utilities of money.
World A: No carbon tax. You take the trip, gaining benefits you value at +$101 while causing social costs of -$100. In this world, we might say that you’ve done the right thing by driving (since this maximizes utility overall), but that for fairness reasons you might be obligated to donate some money to others, since your utility-maximizing decision also acted as a transfer from others to you.
World B: Carbon tax of $100 on the trip, returned as an equal dividend to all people. You take the trip, gaining net benefits after the tax of $1. The rest of society ends up net neutral (though there might still be particular winners and losers). In this world, you’ve done the right thing by driving, and have no further obligations.
World C: Carbon tax of $100 on the trip, which the government will use to buy $100 of consumer goods and dump them down an old mineshaft. You take the trip, gaining net benefits after the tax of $1. The rest of society still experiences the social costs of -$100, which the tax doesn’t do anything to reduce. In this world, you’ve clearly done the wrong thing by driving, since you caused a net utility loss of $99.
My claim is that doing crimes is similar to deciding to drive in World C. The “tax” on crime is imprisoning the criminal, which causes them to pay large costs in terms of their lost freedom and ability to work and doesn’t do anything to benefit society. And in fact it’s worse than World C, since the rest of society needs to pay the additional costs of arresting, prosecuting, and jailing them. So I think the Pigouvian tax analogy does not hold here, and it’s wrong to think that the harms of crime are properly internalized.
Not addressing every point but I think in some respects I agree that crime is C but then how much benefit the criminal gets/values is a case-by-case question, and we can’t just assume that in the irl case at hand that the benefit is (in the analogy) $101 instead of $1000
There’s real deadweight loss from the mineshaft drop/spending money on prisons, but also potentially real value to be gained from the crime itself (canonical case = speeding bc wife is going in to labor)
Remember, property damage as activism isn’t like simple theft—the property damage can cost society amount $X and benefits of activism feature can separately benefit society or be valued by the perpetrator at any other number $Y