Punishment and Willingness to Pay - Gonzaga...

Punishment and Willingness to Pay

Matthew S. Levine*

TABLE OF CONTENTS

I. INTRODUCTION .................................................................................................. 330I. THE PROBLEM OF WILLINGNESS TO PAY ......................................................... 331

A. Illustrative Difficulties .............................................................................. 3311. Lucius V eratius .................................................................................. 3312. Exploding Pintos ............................................................................... 3313. G andhi and K ing ............................................................................... 333

B . The P roblem ............................................................................................. 333Ell. DETERRENCE AND EFFICIENCY ........................................................................ 335

A. Economic Explanations for Punishment ................................................ 3351. Economics of Negligence, Crime, and Punitive Damages ............. 3352. Property Rules, Liability Rules, and Trespass ................................. 336

B. Beyond Efficiency.- Punitive Damages for Efficient Conduct ............... 3401. Profiting from Death: Grimshaw v Ford Motor Co ....................... 3402. The Implications of Grimshaw ......................................................... 341

C . Prices and Sanctions ................................................................................ 3441. Negligence Damages as Sanction .................................................... 3442. Prices and Sanctions as Not Normative ........................................... 347

D. An Efficiency Approach to Civil Disobedience ...................................... 3501. The Necessity Defense as Cost-Benefit Analysis ........................... 3502. The Political Necessity Defense and Civil Disobedience ............... 3523. Classic Civil Disobedience: Gandhi and King ................................ 353

E. The Failure of Efficiency Approaches ..................................................... 3541V. RETRIBUTION AND RIGHT ................................................................................ 355

A. A Sketch of Hegelian Retribution ............................................................ 3551. Crim inal Punishm ent ......................................................................... 3552. Conversion and Theft ........................................................................ 3563. C ontract .............................................................................................. 358

B. The Difficulties with Ex Ante Willingness to Pay ................................... 3591. Crim e and A utonom y ........................................................................ 3592. C ivil D isobedience ............................................................................ 3603. Tort and C ontract ............................................................................... 361

V. HISTORICIZING THE WILLINGNESS TO PAY ...................................................... 363

*. Law clerk to Judge Edward R. Becker, United States Court of Appeals for the ThirdCircuit, Philadelphia. A.B., Harvard, 2000; J.D., Yale, 2004. 1 would like to thank James Q.Whitman for helpful comments regarding earlier drafts of this article. All errors, of course, remainmy own.

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A . Talion and Composition ........................................................................... 3641. The Basic D evelopm ent .................................................................... 3642. Composition and Talion as Price ...................................................... 365

B . Sin and A tonem ent .................................................................................... 3661. The Sacrament of Atonement ........................................................... 3662. Anselm and Retribution .................................................................... 3673. Theology and Willingness to Pay ..................................................... 368

C . G uilt and D ebt .......................................................................................... 369VI. SOME APPROACHES TO PRE-PAYMENT ............................................................ 370

A . Prices on Crim es ...................................................................................... 3701. Prices on Lives and Prices on Crimes .............................................. 3702. The Difficulties of Pre-set Sanctions ................................................ 373

B. Jillingness to Pay, Wealth, and Hubris .................................................. 3751. The Willingness to Pay Standard and Inequality ............................. 3752. Inequality, Wealth, and Hubris ......................................................... 376

C. Pre-Payment, Remorse, and Reconciliation ........................................... 377

I. INTRODUCTION

In most aspects of modem law, we consider it a good thing that an actor isprepared to make good on his obligations and pay the costs of his actions. Thisproposition seems so intuitive that it is surprising to find some exceptions, cases inwhich an actor's willingness to pay for his actions counts as a strike against him, or atleast complicates society's attitudes towards his behavior. In this article, I point toseveral such cases and argue that they suggest the need for some inquiry into themeaning of ex ante willingness to pay for one's violations of social or legal norms.This inquiry can deepen our understanding of the purposes of and justifications forpunishment, and complicate the relationships between law, punishment, andautonomy.

Part 11 of this article lays out the problem, using three examples. Part III sets outthe economic efficiency approach to tort and criminal law while arguing that thisapproach cannot account for important intuitions and leading cases about the impactof ex ante willingness to pay on our judgments of guilt. Next, Part IV sets out anotherpossible approach to tort and crime, what we might call a Hegelian "rightness"approach, and shows that it, too, does not fully cover the territory. Part V sets outsome historical developments that offer insights into modem reactions to ex antewillingness to pay. Finally, Part VI lays out important themes in the approach towillingness to pay and suggests that they provide a way to understand our reactionsthat goes beyond standard theories of deterrence and retribution.

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Il. THE PROBLEM OF WILLINGNESS TO PAY

A. Illustrative Dfficulties

1. Lucius Veratius

In ancient Rome at the time of the Twelve Tables, the penalty for iniuria (i.e.,physical battery) was twenty-five asses.' Over time, the value of the as depreciateddramatically.2 This led to problems:

There was a certain L. Veratius, a terrible nuisance and fearfully irresponsible.He used to take delight in slapping the faces of free men with the palm of hishand, and he went around followed by a servant with a purse of asses, and whenhe had slapped a man he would order twenty-five asses to be paid out on thespot.

3

The Roman law of iniuria developed from this point; the praetors abandoned theformula of the Twelve Tables and gave causes of action against iniuria to compensatethe victim for the damage caused.4

2. Exploding Pintos

Ford Motor Company produced a car, the Pinto, which had the unfortunate habitof exploding when rear-ended. One such explosion killed Lilly Gray, the driver of aPinto, and severely burned her passenger, thirteen-year-old Richard Grimshaw.Grimshaw sued Ford and a jury awarded him $2,516,000 in compensatory damagesand $125 million in punitive damages; the trial court later remitted the punitive awardto $3.5 million. 6 The California Court of Appeals upheld the punitive damages award,finding the required "malice" in Ford's knowledge of the Pinto's poor safety recordand failure to correct the Pinto's problem-arguably poor placement of the fuel

1. JOHN CROOK, LAWAND LIFE OF ROME 250 (1967).

2. THE OXFORD CLASsIcAL DICTIONARY 359 (Simon Homblower & Anthony Spawfortheds., 3d ed. 1999). The as was once a pound of bronze; however, by the end of the Second PunicWar, it weighed only about two ounces. See id By then, its value was relatively small. See WILLIAMGARDNER HALE & CARL DARLING BucK, A LATIN GRAMMAR app. at 356 (1903) (estimating thevalue of the as in the late third century B.c. at around two cents in early twentieth-century Americanmoney).

3. CROOK, supra note 1, at 250-51 (quoting AuLus GELLiJS, NoCrES ArncAE 20.1.13,reprinted in THEATIc NIGHTS OFAULUS GELLIuS 410-11 (T.E. Page et al. eds., 1946)).

4. See id. lniuria eventually came to include a variety of tortious offenses, includingdefamation. Id. at 251.

5. Grimshaw v. Ford Motor Co., 174 Cal. Rptr. 348, 359 (Ct. App. 1981).6. Id at 358. Mrs. Gray's heirs received $559,680 in compensatory damages. Id.

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tank-because it would be cheaper not to do so.7 Ford instead decided to paydamages for those injured or killed by explosions.8

Ford knew that the Pinto was dangerous and that it could correct the problem,but decided not to because it would be more expensive to correct the problem than topay damages for the injuries it caused.9 In terms of legal economic analysis, this wasclearly an efficient and correct decision.' 0 But this is precisely the decision that gaverise to punitive damages. As Douglas Laycock writes, 'The striking thing aboutGrimshaw is its square and utter rejection of the economic view of law."'" Fordmade a decision that economically-minded judges from Learned Hand to RichardPosner would have endorsed-and a California jury was so outraged by that decisionthat it awarded $125 million in punitive damages.' 2

7. Id at 384.8. See id9. Id. In much of this paper, I stylize the facts of Grimshaw in one important respect: I

assume that the cost-benefit analysis discussed in the case actually happened and was officially reliedupon by Ford. It is a matter of some dispute whether this is the case. See RICHARD A. POSNER, TORTLAW: CASES AND ECONOMIC ANALYSIS 226 (1982). This should not matter much here; my goal is notto debate the rightness of the Grimshaw verdict, but rather to examine the concept of retributionunderlying it. It is enough for my purposes that the jury, and the reviewing court, believed that Forddid in fact rely on the cost-benefit analysis in making its safety decisions. Cf Grimshaw, 174 Cal.Rptr. at 384.

In any case, a widely reported form of Ford's cost-benefit analysis is the following charts. Thefirst lists the risks to Ford of the design that was implemented:

Outcome of faulty design Ford's unit value Ford's total value

180 bum deaths $200,000 $36 million180 serious bum injuries $67,000 $12.1 million

2100 burned vehicles $700 $1.5 millionTotal $49.6 million

The second lists the costs of changing the design:Number of units Unit cost Total cost11 million cars $11 $121 million1.5 million light trucks $11 $16.5 millionTotal $137.5 million

W Kip Viscusi, Corporate Risk Analysis: A Reckless Act?, 52 STAN. L. REV. 547, 595 (2000); see alsoPOSNER, supra, at 225; Mark Dowie, Pinto Madness, MOTHER JONES, Sept./Oct. 1977, at 24(describing Ford's cost-benefit analysis).

10. That is, assuming that Ford used the proper values in making its calculation. This islikely a false assumption. Equally likely, though, Ford would still have been punished even if it hadused the right numbers. See infra pp. 371-72.

11. DOUGLAS LAYCOCK, MODERN AMERICAN REMEDIES: CASES AND MATERIALs 667 (2d ed.

1994).12. See Grinmshaw, 174 Cal. Rptr. at 258.

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3. Gandhi and King

Two great heroes of the twentieth century, Mahatma Gandhi and Martin LutherKing, Jr., shared a similar strategy to overcome injustice, a strategy of nonviolentresistance.13 Like many revolutionaries, they violated laws that they viewed unjust. 14

Unlike most revolutionaries, however, they did so without violence, and withoutresisting the operation of the law. s The law quickly punished them, and bothaccepted that punishment. 16 By forcing the deeply flawed legal systems to punishthem and then submitting patiently to that punishment, each drew attention to theevils of those systems, and likely did more to change them than any amount ofviolent resistance would have. 17 In some ways they showed much more respect forprinciples of legality than do those who rebel against the laws they consider unjust.

But in another sense, Gandhi and King showed a profound disrespect for the law.Their actions, much like those of Veratius-or, according to many critics, those ofFord-placed them, in a sense, above the law. By violating the law, with theexpectation of being punished, they treated criminal punishments as no more than acost of their activities. Such actions implicitly argue that the criminal law is anarbitrary set of harms, not a system of rules that ought to bind people's conduct.Treating law as a mere set of threats, rather than a binding source of obligation, 18 is astrong negation of the law's power; this article argues that is one reason why thenonviolent resistance of King and Gandhi had so much force.

B. The Problem

What the foregoing examples have in common is that, in each case, an actorviolated societal norms by harming another person or breaking a criminal law. And,in each case, the actor decided, cc ante, that he was willing to pay the penalty for theviolation.

Of course it is generally honorable to stand ready to make good on one'sobligations. This is the foundation of our system of credit and contracting, which relyon the parties' intent to fulfill their commitments. It is also a key element in tortlaw-an element that has not only economic but also moral underpinnings.' 9 But in

13. See Brent D. Wride, Comment, Political Protest and the Illinois Defense of Necessity, 54U. Ci. L. REV. 1070, 1093-94 (1987).

14. See id. at 1093.15. See id.16. See id. at 1093-94.17. Id. at 1094.18. These terms come loosely from H.L.A. Hart's famous objection to Austinian

positivism's definition of law as a set of"order[s] backed by threats," H.L.A. HART, THE CoNcErT OFLAW 6 (2d ed. 1994), and his substitution of rules of obligation. See generally id at 79-99.

19. For a fascinating discussion that sheds some light on this issue, see Tom Baker,

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the cases noted above, the matter is more complicated. Ford Motor Company waspunished because it was so clear-eyed in its readiness to pay for the harm it caused.Veratius's behavior-not only the slapping, but also the blithe payment of thepenalty--scandalized his fellow-citizens into drafting new legislation.20 WhileGandhi and King's actions, and their willingness to suffer punishment for theirbeliefs,2' strike us as noble, that willingness had a complex meaning very differentfrom the average contract party's willingness to pay damages upon breach.

There is thus a need for some inquiry into the meaning of ex ante willingness topay for one's violations of social or legal norms. Veratius's intentional torts, Ford'sdefective product design, and Gandhi's protests are very different acts in verydifferent contexts; but they all create tension in the relationships between law,punishment, and autonomy.

Ultimately, these disparate examples point to an important tension in law,between the obvious need to set prices and sanctions and the deep discomfort causedby those pre-set penalties. The modem dominance of law and economics should notobscure the difficulties that we naturally have with a fixed set of prices formisbehavior. Those difficulties are peculiarly highlighted where private actors takethe costs into consideration as they plan their own actions. In general, we have nochoice but to have fixed systems of punishment and rational systems for tortdamages. But when individuals appropriate these systems for their own ends, ourdeep-seated discomfort with them rises to the surface.

Blood Money, New Money, and the Moral Economy of Tort Law in Action, 35 LAW & SOC'YREv. 275 (2001). Baker surveyed Connecticut personal injury lawyers to determine, amongother things, the bar's attitude toward "blood money"-that is, money collected in personalinjury suits from individual defendants rather than from their insurers. Id. at 276. He foundthat it was extremely rare for plaintiffs (or their lawyers) to seek such blood money, but thatthey would do so in specific cases. Id. at 295-96. One important such case is where thedefendant failed to purchase what the plaintiff views as a reasonable amount of insurance forhis wealth and risk profile. Id. at 296-97. Baker writes: "The minimum [amount ofinsurance] is whatever it takes to claim, credibly, that you have satisfied your moralobligation to insure." Id. While an economic story for this rule is of course easy to construct,Baker and his interviewees experienced the rule not as an efficiency rule (i.e., "buy enoughinsurance to cover your assets") but as a moral rule. The plaintiffs' lawyers feel that there isa moral responsibility to purchase adequate insurance, and that those who fail to meet thatresponsibility ought to be punished. See id.

20. See CROOK, supra note 1, at 250-51.21. See Wride, supra note 13, at 1093-94.

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1II. DETERRENCE AND EFFICIENCY

A. Economic Explanations for Punishment

1. Economics of Negligence, Crime, and Punitive Damages

Modem tort theory is founded upon the so-called "Hand Formula," whichconsiders the probability of harm (P), the cost of harm (L), and the burden of takingprecautions to prevent harm (B). Under this formula, a defendant is liable innegligence if and only if B < PL. This negligence formula provides the properincentives to a prospective defendant. If it is efficient for the defendant to takeprecautions (that is, if the expected harm of his actions is greater than the cost ofprecautions against them), then he will; if it is not, then he will not take thoseprecautions. 24 By placing the costs of inefficient precautions on the injuring party, thelaw forces him to internalize the harms he causes, thereby making his conductefficient-a process that is efficient for society as a whole.

This standard economic approach can be extended to criminal law. There thefocus is not on the precautions taken (the criminal, after all, is intentionally causingthe harm), but rather on the criminal's expected gain from the crime. In both cases,however, the goal is to make the injurer (tortfeasor or criminal) internalize the costs ofhis actions.25 Posner writes:

In order to design a set of optimal criminal sanctions, we need a model of thecriminal's behavior. The model can be very simple: A person commits a crimebecause the expected benefits of the crime to him exceed the expected costs ...The costs include various out-of-pocket expenses (for guns, burglar tools,masks, etc.), the opportunity costs of the criminal's time, and the expected costsof criminal punishment.26

22. United States v. Carroll Towing Co., 159 F.2d 169, 173 (2d Cir. 1947) (Learned Hand,

J.).23. Id; see also RICHARD A. POSNER, ECONOMC ANALYSIS OF LAW 180-182 (5th ed. 1998)

(explaining the Hand Formula in its marginal form and its relation to risk aversion). Posner alsobriefly discusses the history of tort doctrine, arguing that "[ajlthough the Hand Formula is relatively

recent, the method it capsulizes has been used to determine negligence ever since negligence wasfirst adopted as the standard to govern accident cases." Id at 182.

24. Strict liability regimes, which are the norm in some areas of tort, actually have similar

efficiency effects: while strict liability will have different effects on activity levels by prospective

injurers and victims, its affect on precautions by prospective injurers will be similar to that ofnegligence (Hand Formula) liability. See POSNER, supra note 23, at 192. Modem products liabilitylaw is usually called strict, but is in many respects closer to a negligence standard. See id at 197-98.

25. See id at 194.

26. Id at 242.

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Thus, the classic economic/utilitarian criminal sanction is computed via the formulaG < PS, where G is the criminal's gain from the crime, P is the probability of being

27caught, and S is the criminal's loss from the criminal sanction if caught.Finally, tort law often allows punitive damages. 28 There are a number of

rationales for punitive damages, some of which will be explored below, but for now,this section focuses on the underdeterrence rationale. Not everyone who is harmedby a dangerous product will sue, and not everyone who sues will win or recover a fullmeasure of damages. Thus, the manufacturer of a dangerous product will not fullyinternalize the societal harm caused by his product, and so will end up overestimatingthe societal value of that product. One solution to "underdeterrence" is punitivedamages: if the damages that the manufacturer pays in a given case are "grossed up"to account for the victims who did not sue, then the manufacturer will be more likelyto accurately internalize the costs of its dangerous product.29 This analysis is closelyrelated to the economic/utilitarian criminal sanction formula discussed in the previousparagraph, and is one of the ways in which punitive damages for torts are similar topunishments for crimes.

2. Property Rules, Liability Rules, and Trespass

The preceding analysis does not perfectly explain a simple case in which the lawmight award punitive damages. A builder, B, wishes to deliver supplies to hisbuilding site. The only feasible way for him to get them there is by cutting across theproperty of an adjacent landowner, A. This shortcut would cause minimal, easilyreparable damage to A's property. B offers to pay a reasonable fee to A for the use ofhis land, which A refuses. B increases his offer, proposing to pay A far more thanwould be necessary to repair the damage to his land in order to compensate him forthe inconvenience. Still A refuses. Realizing that there is no other economical way toget the supplies to his site, B cuts across A's land despite A's objection. A sues. The

27. Versions of this formula long predate Richard Posner. Among punishment theorists,Cesare Beccaria and Jeremy Bentham are perhaps most famous for advocating this sort of utilitarianbalancing. See, e.g., CEsARE BECCARIA, OF CRIMES AND PUNISHMENTS 50 (Jane Grigson trans.,Marsilio Publishers 1996) (1764) ("For a punishment to be efficacious, it is enough that thedisadvantage of the punishment should exceed the advantage anticipated from the crime; in whichexcess should be calculate[d] the certainty of punishment and the loss of the expected benefit.");JEREMY BENTHAM, AN INTRODUCrTION TO THE PRINCIPLES OF MORALS AND LEGISLATION 166 (OxfordUniv. Press. 1970) (1789) ("The value of the punishment must not be less in any case than what issufficient to outweigh that of the profit of the offence.").

28. See generally Harold See, Punitive Damages: Introduction and Synopsis, 40 ALA. L.REv. 687 (1989).

29. See Bruce Chapman & Michael Trebilcock, Punitive Damages: Divergence in Search ofa Rationale, 40 ALA. L. REv. 741, 812-13 (1989).

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jury finds for A, and awards A his (minimal) real damages, plus a substantial punitiveaward.

30

This example might seem a bit bizarre, especially if we put some numbers on it.Imagine it would cost B $10,000 to get the supplies to his site in any other way andonly $1,000 to get them there over A's land. Imagine that the damage to A's landcould be repaired for $500 and A's time and inconvenience in dealing with thepassage would be reasonably compensated by another $500. Imagine further that Boffered A as much as $5,000 to allow the passage, and A refused. Imagine finally thatthe jury awarded A $1,000 in actual damages, plus $100,000 in punitive damages.3 1

Here, B's proposal is clearly efficient-it would produce $4,000 in gains for A and$4,000 in gains for B,32 with no losses for anyone. It is clearly Pareto-optimal, andA's refusal is economically irrational. Why should the law protect A's irrationalpreferences and produce an economically inefficient result?

The legal literature already has a sophisticated economic answer to thesequestions: punitive damages are owed because the trespasser tried to convert theproperty rule that protects the landowner's rights into a liability rule. Calabresi andMelamed, in their seminal paper on the subject, define the difference:

An entitlement is protected by a property rule to the extent that someone whowishes to remove the entitlement from its holder must buy it from him in avoluntary transaction in which the value of the entitlement is agreed upon by theseller... Whenever someone may destroy the initial entitlement if he is willingto pay an objectively determined value for it, an entitlement is protected by aliability rule.33

The right to exclude trespassers from one's land is a paradigmatic example of anentitlement protected by a property rule;3 4 the word "property" most basically refersto that very right. B has made a mistake in treating A's property right as a liabilityright, 35 and punitive damages are designed to punish B's violation.

30. These facts are taken loosely from Jacque v. Steenbeig Homes, Inc., 563 N.W.2d 154,165 (Wis. 1997) (affirming the jury's $100,000 punitive award on top of a $1 nominal damagesaward).

31. InJacque, the jury awarded only $1 in nominal damages. Id at 156. 1 have added someactual damages to sharpen the example.

32. For A: $5,000 compensation received, minus $1,000 in costs. For B: $9,000 ($10,000alternate cost minus $1,000 actual cost) in cost savings, minus $5,000 in compensation paid.

33. Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, andInalienability: One New of the Cathedral, 85 HARV. L. REV. 1089, 1092 (1972) (emphasis added).

34. Cf id.35. I will use the shorthand "property right" to refer to an entitlement protected by a

property rule in Calabresi and Melamed's terms, and "liability right" to refer to an entitlementprotected by a liability rule.

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Several questions arise from this account. First, why is the right to excludetrespassers protected by a property rule rather than a liability rule? Calabresi andMelamed seem to think that property rules should be the standard way to protectentitlements, since in the normal case such rules are a better route to efficiency thanliability rules. "Liability rules represent only an approximation of the value of the[entitlement] to its original owner and willingness to pay such an approximate valueis no indication that it is worth more to the [trespasser] than to the owner.' ,36 PerhapsA's desire to be left alone is so important to him that it really was worth more than the$1,000 in actual (average, reasonable, etc.) damages that a jury would award, or the$5,000 that B was prepared to offer. If that is the case, then giving A only $1,000 in"actual" damages does not fully compensate him; and only free bargaining between Aand B will lead to the economically efficient result.37 Providing property-ruleprotection to A's entitlement will require such bargaining; providing only liability ruleprotection will allow B to circumvent the bargaining and destroy A's entitlementwhile paying only approximate, socially-fixed damages.

Second, how does one make the leap from the notion that "this right is protectedby a property rule" to one stating that "violations of this right are punished bypunitive damages"? Calabresi and Melamed answer this question obliquely in theirdiscussion of criminal sanctions. They note that many violations of property rules areremedied not only by compensation, but also by additional criminal punishment:thieves are not simply made to repay the value of the thing stolen, but are punishedwith additional criminal sanctions. The reason is as follows:

The thief not only harms the victim, he undermines rules and distinctions ofsignificance beyond the specific case. Thus even if in a given case we can besure that the value of the item stolen was no more than X dollars, and even if thethief has been caught and is prepared to compensate, we would not be content tocharge the thief X dollars. Since in the majority of cases we cannot be sure of theeconomic efficiency of the transfer by theft, we must add to each case anundefinable kicker which represents society's need to keep all property rulesfrom being changed at will into liability rules. In other words, we imposecriminal sanctions as a means of deterring future attempts to convert propertyrules into liability rules.39

36. Calabresi & Melamed, supra note 33, at 1125.37. See R.H. Coase, The Pmblem of Social Cost, 3 J.L. & EcoN. 1,44 (1960) (arguing that,

in the absence of transaction costs, bargaining between parties will produce the socially efficientallocation of entitlements).

38. Calabresi & Melamed, supra note 33, at 1126.39. Id. Calabresi and Melamed consider but dismiss the underdetenence rationale, noting

that "even if thieves were caught every time, the penalty we would wish to impose would be greaterthan the objective damages to the person robbed." Id. at 1125.

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This logic can easily be extended to punitive damages, which serve as a sort ofsubstitute for criminal sanctions. On this view, the fact that the damages are paid toA, rather than the state, as are criminal sanctions, is irrelevant.40 Simply stated,punitive damages can be viewed as a way to increase damages so that the prospectiveviolator "do[es] not consider conversion an acceptable substitute for purchase,"because "we want to channel resource allocation through the market as much aspossible" and therefore do not want to make theft and purchase equally attractivealtematives.

41

Third, if this entitlement is protected by a property rule, what entitlements shouldbe protected by liability rules? Much of Calabresi and Melamed's article is devotedto this question; they take property rules as a default and ask in what conditions it

42would make sense to substitute liability rules. Their basic answer is that, where adecentralized market system would not yield true valuations (e.g., due to holdout orfree-rider problems), liability rules may do a better job of pricing entitlements.43

They identify two paradigmatic cases in which this might be the case: eminentdomain (in which holdouts could prevent the government from undertaking sociallyoptimal projects unless the government could condemn their land and pay only "justcompensation," via liability-rule damages),44 and accidents.45 Their analysis ofaccidents is as follows:

If we were to give victims a property entitlement not to be accidentally injuredwe would have to require all who engage in activities that may injure individualsto negotiate with them before an accident, and to buy the right to knock off anarm or a leg. Such pre-accident negotiations would be extremely expensive,often prohibitively so. To require them would thus preclude many activities thatmight, in fact, be worth having. And, after an accident, the loser of an arm or legcan always very plausibly deny that he would have sold it at the price the buyerwould have offered.46

Thus, large-scale activities that cause accidents must be regulated by liability rules,not property rules. A property-rule regime would require essentially impossiblenegotiations with every possible future accident victim, and this would be inefficient.

40. See Catherine M. Sharkey, Punitive Damages as Societal Damages, 113 YALE L.J. 347,350-52 (2003) (discussing rationales for punitive damages, and reasons for payment of such damagesto tort victims, to the state, to special funds, or to various combinations of those payees).

41. POsNER, supra note 23, at 227.42. See Calabresi & Melamed, supra note 33, at 1107.43. Id44. Id. at 1106.45. Id at 1108.46. Id. at 1108-09.

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B. Beyond Efficiency: Punitive Damages for Efficient Conduct

1. Profiting from Death: Grimshaw v. Ford Motor Co.

Calabresi and Melamed's discussion of property and liability rules capturesmany of our intuitions about situations where those who are ex ante willing to pay forthe harm they cause are nonetheless held to be culpable and therefore punished. But itis incomplete, and it founders on a very striking modem tort case: Grimshaw v. FordMotor Co.47 Grimshaw, as noted above, was a shocking blow to law and economics.Grimshaw's implicit but obvious rejection of the Hand Formula seems to throw theentire enterprise into doubt. It is also, however, worth noting how poorly Grimshawfits into Calabresi and Melamed's framework.

One could intuitively describe Grimshaw in Calabresi-and-Melamed terms as asimple case where a tortfeasor violated property rights (Grimshaw's right to bodilyintegrity), and therefore faced punitive damages. Certainly if Ford's CEO hadwalked up to a randomly chosen person and intentionally set him on fire, he wouldface punitive damages as well as criminal liability. In the eyes of many, Ford'sbehavior was not much different from this. But this view is not compatible withCalabresi and Melamed's argument. They quite clearly state that accidents are anexample-indeed, the paradigmatic example--of harms that are vindicated via aliability rule.48 Of course, much was made of the intentionality of Ford's conduct:evidence showed that it knew people would die, and it continued selling the Pinto.49

But this misses the point, as Calabresi and Melamed write not merely about activitiesthat may or may not cause accidents (e.g., everyday driving activity), but also aboutbroader societal activities that, in the aggregate, are certain to cause accidents (e.g.,the government allowing people to drive cars, or a giant auto maker selling millionsof cars).50 It is precisely those activities that must be fostered by a liability rulebecause property-rule protection for potential accident victims would totally stymiethese activities even if they benefit society as a whole.

Grimshaw awarded punitive damages, 51 a classic property-rule protection, in acase that, under Calabresi and Melamed's view, obviously warranted liability-ruletreatment. Calabresi and Melamed do not explicitly reject punitive damages inliability-rule cases. Presumably, extraordinary reckless conduct, such as thebuilding of cars that exploded whenever they were started, could be punished bypunitive damages--even if they fit best under the liability-rule paradigm.53 But such

47. 174 Cal. Rptr. 348 (Ct. App. 1981).48. Calabresi & Melamed, supra note 33, at 1108.49. Grimshaw, 174 Cal. Rptr. at 385.50. See Calabresi & Melamed, supra note 33, at 1108-09.51. Grimshaw, 174 Cal. Rptr. at 358.52. Id. at 1108-10.53. Cf id.

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recklessness, from an economist's point of view, was lacking in Grimshaw. Ford'sconduct, at least judging by its own cost-benefit analysis, seems to be the sort ofefficient activity that Calabresi and Melamed would allow.

2. The Implications of Grimshaw

One possible solution to this tension is that Grimshaw is wrong and Calabresiand Melamed's categories hold up. Among scholars, particularly among those of lawand economics, this is a popular view.5 David Owen, writing shortly after theGrimshaw decision, provides a representative view:

The trial court's instruction in Grimshaw is probably the most unsatisfactory ofany that I have seen.... The trial court there instructed the jury that "malice"could be "inferred from defendant's conduct if the conduct was willful,intentional and done in conscious disregard of its possible result." The totallyunacceptable import of this standard is that every actor could be held strictlyliable thereunder for punitive, in addition to compensatory, damages for anyconsequence to any person that was contemplated in advance of any course ofaction.

Virtually all important actions involve some risks to some people, andresponsible individuals and institutions give careful consideration to such risksbefore they act. It is fundamental to life in a dynamic world with anunpredictable future that one must proceed to act, notwithstanding the presenceof some foreseeable risks, provided that the benefits of the contemplated action(or inaction) appear at the time to exceed the risks. If this basic tenet of risk-benefit analysis were not virtually the universal rule, life would grind nearly to ahalt.... The rules of negligence law provide that an actor generally will not beliable even for compensatory damages unless the balance of trade-offs was a badone-that is, one in which the costs exceeded the benefits, thus making theaction on balance cost-ineffective. Punishment for such decisions usually can bejustified only when the actor not only made the wrong decision but also made adeliberate choice to advance his good over what he knew to be the greater goodof others. The trial court's instruction in Grimshaw is thus palpably in error, as itjustifies punishment for most significant decisions even if made in all good faith,and even if on balance goody5

54. See, e.g., David G Owen, Problems in Assessing Punitive Damages AgainstManufacturers of Defective Products, 49 U. Cmi. L. REv. 1, 6-7 (1982).

55. Id. at 21-23 (emphasis added) (quoting, in part, Grimshaw, 174 Cal. Rptr. at 385). Theappellate court in Grimshaw recognized that the trial court's instruction was erroneous insofar as itreferred to the "possible," rather than "probable" result of Ford's actions, but held the error harmless.Grimshaw, 174 Cal. Rptr. at 384, 387.

Richard Epstein provides another representative example of the law and economics response.He wrote not about Grimshaw, but about an earlier Indiana criminal prosecution of Ford for reckless

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To law and economics scholars, Grimshaw is a triumph of emotion over rationality-a decision that rejects sound economic approaches to planning and damages in favorof a standardless approach based on jurors' feelings of outrage.56

But it is impossible to treat Grimshaw as a mere aberration. Other courts haveawarded punitive damages in similar situations where companies more or lessdecided that it would be cheaper to pay compensatory damages for accidents than totake precautions to prevent those accidents.5 7 English case law involving punitive

homicide in connection with another exploding Pinto. Richard A. Epstein, Is Pinto a Criminal?,REGULATION, MariApr. 1980, at 15. Epstein takes the Hand Formula as a given, and writes:

When. . . the prosecution said that Ford had made a conscious choice to "trade" costagainst safety, the answer is that this is precisely what the tort law.., establishes as thelimit of its legal obligation ... When the prosecution said that the defendant had usedexplicit cost-benefit formulas or had assigned monetary values to human life andsuffering, the answer is that Ford did so in compliance with court decisions announcingthat such computations will avoid civil liability... It cannot-should not-be the law thatFord may first be permitted (if not required) to make certain cost-benefit calculationsunder the tort law, only then and for that reason to be held guilty of reckless homicideunder the criminal law.

Id at 19-20. Epstein's article is interesting because it is focused on the mens rea requirement of thecriminal prosecution; he does not assume that Ford's cost-benefit calculations were right, but saysthat this question "is wholly unrelated to the mental element of the [criminal] case." Id. Epstein'sanalysis cannot comprehend the prosecutor's (and the Grimshaw jury's) visceral reaction, that thefact of the cost-benefit analysis itself established the mental element. He responds to that visceralsense with a reductio adadsurdum:

Federal automotive officials had clear responsibility for approving the design of the Pinto.They therefore had to make the same cost-benefit analysis required of Ford in order todischarge their statutory duties. They also had to set some value on human life in order todetermine what precautions were needed and why. If they did not set standards that couldin fact have saved lives, did they not sacrifice human life every bit as much as Fordofficials?

Id. at 21.56. Viscusi, for instance, calls it 'jury misbehavior," and suggests that "jurors will be

offended by, or will not fully understand," the risk-analysis approach. Viscusi, supra note 9, at 570,588.

57. See, e.g., Brown v. Mo. Pac. R.R-, 703 F.2d 1050, 1053 (8th Cir. 1983) (upholding a juryverdict that included punitive damages against a railroad that allegedly decided "that it is cheaper tobe sued than to protect railroad crossings"); Sturm, Ruger & Co. v. Day, 594 P.2d 38, 47 (Alaska1979) ("[T]he threat of punitive damages serves a deterrence function in cases in which ... it wouldbe cheaper for the manufacturer to pay compensatory damages to those who did present claims thenit would be to remedy the product's defect."); Forrest City Mach. Works, Inc. v. Aderhold, 616S.W.2d 720, 726 (Ark. 1981) (approving the concept of punitive damages in product liability cases,where the manufacturer decided that it would be cheaper to pay compensation than to remedy thedefect, but reversing the punitive award as inconsistent with the evidence); see also LAYCOCK, supranote 11, at 668. The Sturm, Ruger & Co. court's reliance on "deterrence" is a bit off; if these productsactually are efficient (that is, if it would cost more to change them than to pay for the harm theycause), then we should not want to deter them.

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damages has similar elements. In a leading case, Lord Devlin held that one of thethree limited categories of cases supporting punitive damages is that "in which thedefendant's conduct has been calculated by him to make a profit for himself whichmay well exceed the compensation payable to the plaintiff."58 Without qualification,Lord Devlin's formulation is the Hand Formula--that is, it indicates cases in whichthe defendant should not be liable at all, notwithstanding punitive damages.59

Thus Grimshaw cannot simply be a mistake-or, if it is a mistake, it is asystemic mistake, one built into the psychology of jurors and judges. Cases like thismay be economically inefficient, but they respond to a common sentiment thatefficient ex ante cost-benefit analyses can be punished. Explaining this sentimentwould seem to require moving beyond economic efficiency.

Incidentally, scholars have identified other economically perverse effects ofawarding punitive damages in cases like Grimshaw. David Owen notes one of them:

[T]he more a manufacturer is truly concerned about its product's safety, themore it will encourage self-criticism and "negative" analyses of the productwithin the company. For example, it often is desirable during the initial stages ofa product's design to test it to its limits to discover what those limits are: carsmay thus be crash-tested until their gas tanks burst, and rats may be injected witha drug in ever higher doses until some die. Documentary evidence (especiallyfilms) of such tests can later retum to haunt the manufacturer, as they did in theGrimshaw Pinto case.6°

We might conclude that such decisions tend to punish not only financialresponsibility and cost-benefit analysis, but also any safety testing. In a sense, this isprimarily an evidentiary problem. Responsible safety testing will createdocumentation that could look bad for the manufacturer in the course of a lawsuit.Such an evidentiary problem might be approached through evidence rules andrulings, an analysis outside the scope of this article.6'

58. Rookes v. Barnard, [1964] Lloyd's Rep. 28,65.59. Compare id. with United States v. Carroll Towing Co., 159 F.2d 169, 173 (2d Cir. 1947).

One crucial qualification for the formula might be if Lord Devlin were talking about only intentionalviolations of property rules (e.g. intentional copyright infringement), as seems likely. Under Calabresiand Melamed's analysis, such cases might well require punitive damages because the efficientapproach would be market bargaining rather than unilateral infringement of the right. See Calabresi& Melamed, supra note 33, at 1126 n.71. But, applied to negligence cases, Lord Devlin'sformulation is at best very odd, and at worst exactly the opposite of the correct approach.

60. Owen, supra note 54, at 17-18 (footnotes omitted).61. See FED. R. EviD. 403, 407-409. Thus, judges might apply Federal Rule of Evidence

403 or its state equivalent strictly in such cases, excluding relevant but prejudicial crash-test footagein order to encourage manufacturers to conduct and document such tests without fear of increasedliability. See id at 403. Similar policies underlie other federal evidentiary exclusions. See, e.g., id at407 (excluding evidence of subsequent remedial measures in negligence and products liability cases);id. at 408 (excluding evidence of offers to compromise claims to show liability); id. at 409 (excluding

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But this tendency may not merely be an evidentiary problem, but also anindication of an intuition parallel to the one that punishes Ford's ex ante calculation ofits tort judgment costs. Ford is being punished for calculating how safe is safeenough- making its own decisions about safety rather than leaving them to the laterdetermination of the jury. Here, too, Ford is usurping ex ante what seems to be the expost role of the court system. The courts will likely react to that usurpation withharsher penalties.

62

C. Prices and Sanctions

1. Negligence Damages as Sanction

One approach to the Grimshaw problem is to characterize it as a distinctionbetween prices and sanctions. Robert Cooter developed this approach in his articlePrices and Sanctions.61 According to Cooter, "a sanction [is] a detriment imposed fordoing what is forbidden, and a price [is] money extracted for doing what ispermitted.4 4 On this analysis, negligence damages are a sanction,65 and Ford (andPosner) simply got it wrong in reading them as a price:

Economists sometimes think of sanctions as prices, which prevents them fromunderstanding the normative character of the law. To illustrate this confusion inthe area of tort law, suppose an individual believes that compensatory damagesare the price of negligence. When accused of negligence, he might explain to thecourt that he deliberately took actions proscribed by the legal standard in order toavoid the high cost of compliance, and, in doing so, he was fully prepared tocompensate anyone who was injured. The court might reply that the injurer has aduty to take reasonable care, not permission to be careless and paycompensatory damages. The court might add that deliberate violation of thelegal standard, as admitted by the injurer, provides grounds for punitivedamages. Finally, the court might suggest that punitive damages be set highenough to deter the injurer in the futre.6 6

The problem with this approach is that it assumes some standard of negligence that isdivorced from the cost-benefit analysis conducted by Ford (and implied by the Hand

evidence of payment of medical expenses to show liability). For each rule, the Advisory CommitteeNotes make it clear that, despite the probative value of the evidence, it is excluded in order to furtherthe policy goals of encouraging remedial measures, settlements, and prompt medical care. Id at 407-09 advisory committee's note.

62. See, e.g., id at 348.63. Robert Cooter, Prices and Sanctions, 84 COLUM. L. REv 1523 (1984).64. Id65. See id. at 1538.66. Id at 1543.

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Formula). Intuitively, this seems reasonable, as negligence is defined as a failure toexercise the level of care that a reasonable person would exercise in thecircumstances;6 7 it is set by community standards, not by economic analysis. Thus, areasonable level of care might be "don't design cars that kill people." Moreover, anyfailure to adhere to that level of care, whatever its costs, would be negligent; anintentional failure to do so would be enough to support punitive damages.

But this cannot be right. Every car model that has ever been built occasionallykills people occasionally. "Avoid deaths, whatever the cost," cannot possibly be thecommunity's standard for product design. Calabresi characterizes the notion that"society wants to avoid accidents at all costs" as a "myth. 6 8 He writes:

Our society is not committed to preserving life at any cost.... [L]ives are spentnot only when the quidpro quo is some great moral principle, but also when it isa matter of convenience. Ventures are undertaken that, statistically at least, arecertain to cost lives. Thus we build a tunnel under Mont Blanc because it isessential to the Common Market and cuts down the traveling time from Rome toParis, though we know that about one man per kilometer of tunnel will die. Wetake planes and cars rather than safer, slower means of travel. And perhaps mosttelling, we use relatively safe equipment rather than the safest imaginablebecause-and it is not a bad reason-the safest cost too much.69

So the notion that a product that poses any threat to safety is per se negligent isunsupportable. Of course, Cooter could be arguing for some lower standard ofnegligence that is nonetheless derived from community norms rather than fromeconomic analysis, but it is extremely unclear what that standard would be.

It is quite likely that the average citizen would be uncomfortable setting theappropriate level of accidental deaths via cost-benefit analysis by assigning a dollarvalue to each human life lost and measuring that dollar value against the costs ofprecautions. But at this late date in the law and economics revolution, it is probablyimpossible to argue that this is not what actually happens in practice.7°

It is all well and good to say that an actor that decides, on a cost-benefit analysis,to reject the community's standards should be punished. However, when thecommunity's standards are themselves based on a cost-benefit analysis, the argumentis weakened; and when the community's standard is not a set standard (e.g., "takelevel Xof precautions") fixed by the community's ex ante cost-benefit analysis, but israther a standard requiring a cost-benefit analysis (e.g., "take the efficient level ofprecautions"), the argument vanishes. Ford was following the community standard

67. BLACK'SLAWDICIONARY 1061 (8th ed. 2004).68. GutDo CALABREsI, THE COSTS OF AccDENTS: A LEGAL AND ECONOMIC ANALYsIs 17

(1970).69. Id. at 17-18.70. See, e.g., Viscusi, supra note 9, at 550.

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set out in the most famous of all negligence cases: it compared B to PL, and took thelevel of precautions that minimized total social costs.

71

Cooter has something to say about these difficulties. In his discussion ofnegligence liability, he notes that the best way to achieve an efficient negligencestandard is to have a community standard, based on broad experience, about what isand is not negligent conduct.72 Thus in automobile accident cases, courts ask notwhether a driver took an efficient level of precautions, but whether he acted as woulda reasonable driver under the same or similar circumstances. 73 Community norms ofreasonable care synthesize long, collective experience with balancing the risks ofdriving with its benefits: everyone knows that driving 100 m.p.h. in a school zonewhile reading the newspaper and talking on a cell phone, though it may get you towork faster, is too dangerous to be reasonable; similarly, most people realize thatdriving 5 m.p.h. and coming to a complete stop whenever another car approaches,though it may reduce accidents, is not an effective use of automotive technology.74

Society's collective judgments about costs and benefits provide a standard of care,and individuals who violate that standard risk the sanction of negligence damages.

But, as Cooter recognizes, these collective norms do not begin to cover thewhole range of cases.75 We all have a pretty good idea of what driving practices are

71. See Cooter, supra note 63, at 1540-41. To reject this view, one would have to argue thatthe United States had specific standards for automobile safety which Ford violated. This is clearlyfalse on the facts of Grimshaw, where no violation of statutory standards was found or alleged. CfGrimshaw v. Ford Motor Co., 174 Cal. Rptr. 348, 348 (Ct. App. 1981). Ford's negligence was notperse, based on a violation of statutory standards, but was grounded on the fact that the Pinto explodedand killed people. Id. at 358.

Products liability is notionally strict, though this characterization is highly debatable. SeePosNER, supra note 23, at 197. To the extent that products liability is strict, rather than negligence-based, it is, in Cooter's terms, a price rather than a sanction. See Cooter, supra note 63, at 1524, 1539.Thus, Cooter's discussion of mistaking sanctions for prices should have no application to Grimshaw;if products liability is strict, then Ford was exactly right in thinking of it as a price. Cf id at 1543.

72. Cooter, supra note 63, at 1540.73. See, e.g., RESTATEMENT (SEcOND) OF TORTS § 283 (1965) ("Unless the actor is a child,

the standard of conduct to which he must conform to avoid being negligent is that of a reasonableman under like circumstances.").

74. A nice illustration of the evolution of these standards comes from two well-knowngrade-crossing cases. Compare Balt. & Ohio RR. Co. v. Goodman, 275 U.S. 66, 69-70 (1927)(Holmes, J.) (holding that a driver who failed to get out of his car at a railroad grade crossing to lookfor oncoming trains was negligent), with Pokora v. Wabash Ry. Co., 292 U.S. 98, 104 (1934)(Cardozo, J.) ("Standards of prudent conduct are declared at times by courts, but they are taken overfrom the facts of life. To get out of a vehicle and reconnoitre is an uncommon precaution, as everydayexperience informs us."). Justice Cardozo's approach adopted the normal practices of drivers asdecisive of due care; while Justice Holmes's may have been safer. Compare Goodman, 275 U.S. at69-70, with Pokora, 292 U.S. at 104. Nonetheless, the everyday balancing of costs and benefits hasenshrined Justice Cardozo's approach as the legal standard. See RESTATEMENT (SEcOND) OF ToRTs §283 (1965).

75. See Cooter, supra note 63, at 1541.

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reasonable or unreasonable, yet few of us have any intuition about what fuel-tank76design practices are safe. Some practices (e.g., driving) have reasonableness norms

that are widely understood by the community (and applied by jurors);77 others (e.g.,accounting) have reasonableness norms that are easily determined by asking therelevant community (expert witnesses, etc.);78 while others probably do not have anysuch pre-made reasonableness norms at all.79 Cooter addresses this issue too. Hewrites: "If the market failure prevents an efficient community standard from arisingand the courts nonetheless decide to adopt a negligence rule, officials must computethe optimal standard directly or proceed by successive approximations."' 0

Proceeding "by successive approximations" means no more than doing an individual

ex post cost-benefit analysis for each case.81 At this point, Cooter's justification forpunitive damages entirely vanishes; his theory cannot explain punishing a companyfor performing the exact balancing that a court will later perform.

2. Prices and Sanctions as Not Normative

The difficulties that Cooter's theory faces in dealing with Grimshaw extendbeyond the specific case of intentional failure to take precautions to avoid accidentaldeaths. Cooter's use of terms suggests that his is a moral theory: one can act in a waythat incurs a price, and pay that price, but one cannot morally act in a way that incursa sanction merely because one is willing to bear the sanction. 82 Such a theory wouldseem to add a certain amount of clarity to the issue of ex ante willingness to pay. But,it cannot be sustained. Reading any normative value into Cooter's distinction is, inthe end, a category mistake.

76. And, to the extent that we do have such an intuition in the context of litigation, it is likelyto be ill-founded. If a fuel tank blew up, jurors are likely to feel that it was unreasonably designed,regardless of how small was the ex ante probability of such an explosion. See, e.g., Jeffrey J.Rachlinski, A Positive Psychological Theory of Judging in Hindsight, 65 U. CHI. L. REV. 571, 571(1998) ("[P]sychologists have demonstrated repeatedly that people overstate the predictability of pastevents--a phenomenon that psychologists have termed the 'hindsight bias.').

77. See Cooter, supra note 63, at 1541.78. See id. at 154041.79. One imagines that engineering has important reasonableness norms to which an expert

witness could testify Making an airbag with holes in it probably isn't reasonable according toprofessional standards. But clearly, there are also decisions that cannot be made by professionalreasonableness norms. For example, whether to install an airbag in the first place is a cost-benefitdecision that might not be answered the same way by every engineer designing every kind of car.However, this norm, too, might change over time, so that in ten years designing a car without airbagswould be as unthinkable as designing a car without seatbelts would be today.

80. Cooter, supra note 63, at 1541.81. See id82. See Cooter, supra note 63, at 1523. Cooter writes, "Officials should create prices to

compel decisionmakers to take into account the extemal costs of their acts, whereas officials shouldimpose sanctions to deter people from doing what is wrong." Id

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Cooter's approach is grounded in economics,8 3 and it assumes that society hassome idea of standards it wishes to impose in the most effective and efficient ways. 84

If lawmakers know the standard that they want-that is, if they know the optimallevel of an activity-then they should impose a sanction.85 If, on the other hand, theycannot easily determine the optimal level of the activity, but do know the costs thatthe activity imposes on others, they should impose a price.8 6 Thus, if the communityis convinced that murder is a bad thing, it should impose a sanction on murder. Theprecise level of the sanction-a term of years, life imprisonment, or execution-is, onthis view, of secondary importance. What matters is that the existence of a sanctionwill prevent most people from engaging in the activity at all.87 On the other hand,while it may be known that too much pollution is a bad thing, it may not beimmediately obvious what the proper tradeoff is between the harms of pollution andthe advantages of production.88 Thus it might make sense to charge manufacturers aset price for each ton of pollution they emit and rely on the incentives so created tofind the optimal amount of pollution. Here, unlike with sanctions, the precise level ofthe price is of primary importance; if the price does not accurately reflect the socialcosts, then the policy will not achieve the optimal level of the activity8 9 If pollutersare charged a penny per ton, there will be too much pollution; if they are charged amillion dollars per ton, there will be too little industry.9°

This distinction is based purely on efficiency.91 It does not provide anynormative reason to think that someone who violates a sanction-backed norm ismorally wrong, while someone who does something that incurs a price is not. Onthis theory, a sanction is set because society has determined that, in general, anyviolation of a sanction-backed rule will be inefficient.92 But, if the only justification isefficiency, and an actor sees that a violation of the rule would actually be efficient,93

83. See id.84. See id at 1524.

85. Id86. Id. at 1532-33. This simplifies Cooter's argument; he writes not in terms of "knowing"

the correct level of the activity or external harms, but in terms of information costs. Id. If it is easier orcheaper for lawmakers to gather information about optimal levels of activity, sanctions are called for,if it is easier to gather information about external costs, prices are appropriate. Id. at 1533.

87. Cooter, supra note 63, at 1532 ("Most people conform to a reasonable obligation backedby a reasonable sanction, even if the legal standard is inefficient or otherwise undesirable.").

88. Cf id at 1532. Or it may be that the question ofwhether to regulate pollution via pricesor sanctions is controversial. See, e.g., Keith Keplinger, The Economics of Total Maximum DailyLoads, 43 NAT. REsouRcEs J. 1057, 1081 (2003) (discussing the possibility of industry buying andselling pollution reduction credits).

89. See Cooter, supra note 63, at 1532.90. See, e.g., id at 1525, 1528-31.91. See id at 1532.92. See id at 1533.93. This could surely happen with some fiequency. Such an excuse would basically be a

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then Cooter's theory provides no normative reason to disapprove of such action.Therefore, it would not be irrational for the actor to take the level of the sanction intoaccount in deciding whether a violation would be efficient.

Cooter does provide an explanation for why violating a sanction-backed norm(e.g., negligence) can justify punitive damages. If it is profitable for an injurer toviolate negligence norms, it may well be even more profitable for him to fall far shortof the community's standard.95 This provides an efficiency explanation for punitivedamages awarded for intentional misconduct with the intent to pay damages ratherthan comply with a negligence standard (Ford's alleged offense). From a strictefficiency point of view, it is not clear why this works as an explanation. Generally,sanctions are designed to prevent normal people from doing a forbidden activity, andto punish and deter those who violate the rules based on society's general efficiency-based conclusion about what standard is appropriate. But that general conclusionpresumably does not by definition take into account the "exceptional injurers" forwhom the benefits of breaching the standard are much higher than usual. And itseems plausible that those injurers should be able to argue that if society had properlyevaluated their particular situations, it might have revised the standard for them,

rather than punishing them for falling far below that standard.9 6

weak form of the necessity defense without requirements of imminence, etc. Virtually any type ofconduct that society has in general ruled out of bounds, could be justified as efficient in a particularcircumstance-consider Jean Valjean stealing a loaf of bread to feed his starving family, see VICTORHuGo, LEs MIsERABLEs (Charles E. Wilbour trans., 1931), or George W. Bush authorizingextrajudicial killings of suspected terrorists. We think that theft and murder are so unlikely to begood on balance that we forbid them in all cases-but there are nonetheless cases where it isimaginable that at least some would argue that these crimes do in fact lead to "efficient" (i.e., netpositive utility) results. Sometimes the courts say that these actions are not crimes at all (e.g., terroristassassinations or the necessity defense); sometimes they remain crimes within the determination ofthe justice system, but we have a harder time condemning them morally (e.g., Jean Valjean).

94. See Cooter, supra note 63, at 1543.95. Id at 1544 ("Intentional fault is gross because once the injurer decides to disobey the

legal standard it pays to fall far short of it."). This typically applies to "exceptional injurers, [forwhom] compliance costs or the benefits from noncompliance are unusually high." Id. at 1543. "Forthese injurers, violating the standard and paying compensatory damages is cheaper thanconforming." Id

96. An example might be helpful. The general standard for driving speed might be "drive nofaster than 65 m.p.h." Specific exceptions might exist for police cars and ambulances. A privatecitizen driving his pregnant wife to the hospital might also break the speed limit-and it might beworth it for him to "fall far short of' the legal standard by driving 90 m.p.h. He has determined thathis "compliance costs or the benefits from noncompliance are unusually high," and sounapologetically breaks the speed limit. While in abstract terms we might be shocked by"exceptional injurers" who let their own high compliance costs overrule society's goal of deterringnegligence, most of us would be considerably less shocked by this driver's conduct, and would notsee him as deserving extra punishment for intentionally violating legal norms.

In legal terms, this is the territory of the necessity defense. In Cooter's economic efficiencyterms, though, it is difficult to distinguish this "exceptional injurer" from Ford, and explain why our

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D. An Efficiency Approach to Civil Disobedience

The deterrence/efficiency approach to punishment can also shed light on civildisobedience, though its results here are not especially enlightening. Thisexamination involves the concept of the necessity defense and its controversialapplication to civil disobedience.

1. The Necessity Defense as Cost-Benefit Analysis

In general, the criminal law recognizes the defense that a defendant's criminalconduct was necessary in order to prevent a greater evil.97 The relevant Model PenalCode (MPG) provision is as follows:

Conduct that the actor believes to be necessary to avoid a harm or evil to himselfor to another is justifiable, provided that: (a) the harm or evil sought to beavoided by such conduct is greater than that sought to be prevented by the lawdefining the offense charged; and (b) neither the Code nor other law defining theoffense provides exceptions or defenses dealing with the specific situationinvolved; and (c) a legislative purpose to exclude the justification claimed doesnot otherwise plainly appear.98

In theory, this would allow defendants to escape the strictures of criminal law if theirown cost-benefit analysis indicated that their chosen course of action was proper. Inpractice, however, the necessity defense is often strictly constrained.99 Judges havelimited necessity evidence to justify a variety of crimes, including escape from prisonto avoid physical harm, 10 0 medical use of marijuana, 0 1 and distribution of needleswithout a prescription in order to stem the spread of l 102 Some statutory regimesare also stricter than the MPC. For example, New York requires that the action be"necessary as an emergency measure to avoid an imminent public or private injury"

driver should be excused from punishment while Ford should not be.97. MODEL PENAL CODE § 3.02(1) (Official Draft and Explanatory Notes 1985).98. Id. The justification is unavailable if the actor recklessly or negligently brought about the

situation requiring the choice of evils. Id. § 3.02(2).99. POSNER, supra note 23, at 261-62. Judge Posner writes that the defense is "regarded with

disfavor except when it takes the form of self-defense," which is arguably a form of the necessitydefense, but notes that it "will usually succeed if there is a very great disparity between the cost of thecrime to the victim and the gain to the injurer." Id.

100. See, e.g., United States v. Bailey, 444 U.S. 394,394-95 (1980).101. See, e.g., United States v. Oakland Cannabis Buyers' Coop., 532 U.S. 483, 483 (2001);

Commonwealth v. Hutchins, 575 N.E.2d 741,745 (Mass. 1991); State v. Poling, 531 S.E.2d 678, 684(W. Va. 2000).

102. See Commonwealth v. Leno, 616 N.E.2d 453,456 (Mass. 1993).

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in order to claim the defense, and refuses to base necessity "upon considerationspertaining only to the morality and advisability of the statute."' 0 3

The necessity defense should not be viewed as a blanket invitation to all citizensto perform a cost-benefit analysis each time it might be beneficial for them to violatea criminal law. Instead, it is a fairly limited residual category of justification,available only in special cases. Accordingly, the Ninth Circuit wrote in United Statesv. Schoon, a necessity case: "In the traditional cases, a prisoner flees a buming celland averts death, or someone demolishes a home to create a firebreak and preventsthe conflagration of an entire community.' 4

It is worth examining the sense in which the necessity defense is based onutilitarian reasoning.10 5 The prisoner whose cell is burning will flee even if nonecessity defense is allowed, as long as the punishment for escape is anything lessthan death-and even, presumably, if it is death. 10 6 Thus allowing the defense here isnot required to align incentives; the prisoner will do the socially optimal thingregardless of whether the defense is allowed. 1 07 In cases of true "necessity," namely,where the harm to be avoided is truly enormous in comparison to the statutoryobjectives and penalties, the criminal law will have no incentive function.10 8 Instead,punishment is remitted in these cases because it is not justified--the defendant hasdone nothing wrong, so punishing him will only serve to introduce evil (the harm of

103. N.Y. PENAL LAW § 35.05 (McKinney 2003).104. 971F.2d193,198(9thCir. 1991).105. Seeid at 196.106. The prisoner, faced with the choice of certain and immediate death by burning or an

uncertain later death by punishment, justifiably will most likely choose the latter.107. See id at 198. Of course, in many other cases, the defense will serve a vital incentive

function: most classically, if the person creating a firebreak risks prison even though he saves a wholetown, he may forego creating the firebreak and doom the town. Here, the defense is necessary, or atleast helpful, to make sure that incentives are correct One could easily construct a necessity defensethat covers this case but not the prisoner (e.g., "necessary to prevent harm to others that is greaterthan the harm sought to be prevented by the law"), though this is, of course, a fairly pointlessexercise.

108. See id at 196-98. That is, provided that the necessity directly impacts the actor, theprisoner in a burning cell will not be influenced by laws one way or the other, but a bystander whosehome is not threatened by a fire may need proper incentives to create a firebreak. Cf id. at 196-97.

Of course one can imagine legal systems where the harm to be prevented is enormous inrelation to the statutory objectives, but not in relation to the statutory penalties. Thus, a Victorianbeggar might be faced with the choice of starving to death or stealing a loaf of bread. While the harmof the theft would be small, the penalty for it might be death. In this case, the law might deter anaction that may be arguably optimal. Cf id. (Although Posner would argue that it is not: "sincetransaction costs are low, my inability to negotiate a successful purchase of the bread shows that thebread is really worth more to the gourmand." PosNER, supra note 23, at 262. This is not. I wouldcontend, a necessary result of the economic approach.) Generally, however, I assume that modemlaw uses heavy penalties to prevent serious harms, and relatively lighter penalties to preventrelatively minor harms.

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his punishment) without the offsetting benefit of preventing other evil. 10 9 Thenecessity defense is not solely about creating proper incentives; it also makes ajudgment about what actions are proper: even actions that violate the letter of the law,are proper if they prevent much greater harms.

2. The Political Necessity Defense and Civil Disobedience

One widely noted pattern for invoking the necessity defense is found in cases ofcivil disobedience. Schoon is the leading case in this line, which is sometimesreferred to as the "political necessity defense."' 10 Gregory Schoon and two co-defendants were convicted of obstructing the activities of the Tucson office of theInternal Revenue Service ("IRS") after they staged a protest that involved splashingsimulated blood around the office."' Their protest concerned the use of Americantax money in El Salvador, and at trial they raised a necessity defense, offeringtestimony about bloodshed in El Salvador and claiming that their protest wasnecessary to stop the violence." 2 The trial court rejected the defense as a matter oflaw, and the Ninth Circuit, in a careful opinion, affirmed.' 1 3 Judge Boocheverconsidered the four elements of the necessity defense: choice of evils, imminentharm, direct causal relationship between action and averting harm, and lack of legalalternatives.'14 He found that the final three elements were lacking. 1 5 There was noimmediate harm because a democratically arrived-at government policy is not acognizable "harm."' 16 There was no direct causal relationship because the protesterscould not themselves stop the violence in El Salvador.117 Finally, there were clearlegal alternatives to these protests, such as petitioning Congress to change itspolicy. 1

8

Judge Boochever was surely right in his own analysis of the missing elements ofthe traditional necessity defense, but another approach is worth considering. Schoonand company claimed that the harms they wanted to prevent outweighed the harmsprevented by the statute they violated.' 19 This is perfectly sensible-thousands of

109. Cf BENTHAM, supra note 27, at 158 ("[A]ll punishment in itself is evil. Upon theprinciple of utility, if it ought at all to be admitted, it ought only to be admitted in as far as it promisesto exclude some greater evil.").

110. See, e.g., Wride, supra note 13, at 1070.111. Schoon, 971 F.2d at 195.112. Id.113. Id.114. Id. at 195, 197-98.115. Id at 196-200.116. Schoon, 971 E2dat 198.117. Id118. Id.119. Seeid. at195.

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deaths in El Salvador are of course worse than some disrupted audits in Tucson-butonly if there was some reasonable expectation that their protest would have someeffect. If they seriously believed that the benefits of their actions outweighed theharms, they either had a bizarrely grandiose view of the efficacy of their protest, ortheir valuations of the harms and benefits were different from those of the law. Thelatter is plausible: humanitarian protesters might well value the lives of anonymousSalvadorans more highly than does the U.S. government, and they might well worryless about inconveniencing IRS employees and disrupting government functions.Nonetheless, it seems likely that the Schoon defendants' "necessity" balancing wasinfluenced by an unrealistic view of their own efficacy. A balancing that weighed theharm caused by the protests against the benefit of stopping violence in El Salvador,discounted by the slim probability that the protests would do any appreciable good toachieve that benefit, would likely result in a determination that there was no"necessity" in a choice-of-the-lesser-evil sense. Indeed, the factors named by JudgeBoochever could be recharacterized as indicia of which way a simple utilitarianbalancing would go. If the formula is "violate the law if H, < PHn," where H, is theharm caused by the protest/violation, P is the probability that the protest will succeed,and Hn is the harm caused by inaction, then the court's determination that ademocratic policy is not a cognizable "harm" suggests that the protestors are wrongabout the magnitude of H,. The lack of a direct causal relationship between theprotest and the desired result lessens the magnitude of P; and the existence of legalalternatives lessens the magnitude of H, because if legal routes can solve theproblem, then the harm of not violating the law is much less. Thus, the factorsidentified in Schoon can be read as independent conditions on the necessity defense.Alternately, that defense can be read simply as a cost-benefit analysis, with theSchoon elements as factors to consider in performing that analysis.

3. Classic Civil Disobedience: Gandhi and King

Schoon and his friends were obviously not the first people to think of breakingthe law to call attention to a noble cause. Presumably they saw themselves asfollowing in the tradition of civil disobedience that stretches back at least to Gandhiand Martin Luther King, Jr.' 20 But there is one critical difference. Gandhi and Kingasked to be punished for their law-breaking, while Schoon argued that he should belet off.

12 1

120. It is worth noting here the distinction between "direct" civil disobedience, that is,protesting against a law by breaking it (e.g. black protesters illegally sitting at a whites-only lunchcounter) and "indirect" civil disobedience, which "involves violating a law or interfering with agovernment policy that is not, itself, the object of protest." Schoon, 971 E2d at 196. The analysis inthis section should not turn on the distinction, though the Schoon opinion makes much of it, and infact rules "that necessity can never be proved in a case of indirect civil disobedience." Id at 197.

121. CompareWride, supranote 13,at 1093, with Schoon, 971 F.2dat 195.

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This difference has been remarked in the commentary on the "political necessitydefense" cases.122 It has typically been analyzed in terms of the effectiveness of theprotest: Gandhi and King called more attention to their cause and showed greaterdevotion to it by suffering punishments for it.123 "If the person practicing civildisobedience is set free not because the offensive institution has been removed butbecause the system of justice has made an exception, then the contradiction [of usingthe justice system to defend an unjust institution] remains hidden, and the object ofthe protest is lost.' 124

A simple economic analysis of the difference is also readily available. WhenMartin Luther King, Jr. disobeyed a segregationist law, knowing and intending that hewould be imprisoned for it, the economic conclusion is that, in his valuation, the harmof the unjust law 125 outweighed the direct harm of his protest 126 plus the personalharm of being imprisoned. Schoon et al., on the other hand, by raising the necessitydefense,' 27 suggested that they valued protecting El Salvador over the disruptioncaused by their protest--but not over the personal harm caused by their convictions.Thus, the political necessity defense protesters implicitly place less value on theircause than classical civil-disobedience advocates placed on theirs, demonstrating lessconviction of the rightness of their cause. It is reasonable to assume that peoplediscount the harm of their actions to other people: a protestor who spills blood overIRS files will probably not feel the harm of his actions as keenly as the IRS agentwhose months of work are ruined, or as the IRS janitor who has to clean up the mess.Willingness to accept consequences is an important indicator that one's balancing ofthe necessity factors is, if not correct, at least sincere. Simply put, going to jail for acause shows a lot more commitment than hurting other people for that cause and thenasking to be excused.

E. The Failure of Efficiency Approaches

In general, efficiency approaches neither explain the results reached in cases likeGrimshaw nor community intuitions concerning the effect of ex ante consideration ofpenalties on ultimate determinations of guilt. The Hand Formula, 12 the Calabresiand Melamed framework, 129 and the Cooter price/sanction distinction130 all fail to

122. See, e.g., Laura J. Schulkind, Note, Applying the Necessity Defense to CivilDisobedience Cases, 64 N.YU. L. REv. 79, 79-80 (1989); Wride, supra note 13, at 1093-94.

123. Cf Wride, supra note 13, at 1093-94.124. Wride, supra note 13, at 1094.125. Discounted by the probability that his protest would change it.126. The disruption, unrest, police costs, etc.127. Schoon, 971 F.2d 193 at 195.128. See United States v. CarrollTowing Co., 159F.2d 169, 173 (2dCir. 1947).129. Calabresi & Melamed, supra note 33, at 1092.130. Cooter, supra note 63.

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explain exactly what the Ford Motor Company did wrong. There seems to exist awidespread distaste for ex ante willingness to pay that cannot be explained solely bynotions of economic efficiency and proper deterrence.

IV RETRIBUTION AND RIGHT

As economic approaches do not seem to fully answer important questions aboutthe interaction of willingness to pay and punishment, this article now turns to theother major strand of punishment theory-retribution. I briefly sketch a Hegelianaccount of punishment and its relation not only to the criminal law, but also to tortand contract law. This account seems to close some of the holes left open by theeconomic deterrence account, but it does not solve all of the difficulties.

A. A Sketch ofHegelian Retribution

1. Criminal Punishment

Hegel believed that the purpose of punishment is to "annul" crime by inflictingan injury on the criminal to cancel out the injury that criminal had inflicted onsociety.' 31 But he rejected simple talionic "eye for an eye" punishments. 132 Theessence of crime has to do not with the specific injury or theft, but with the coercionof rights; the retribution, then, need only be an equivalent coercion of rights, not thesame particular coercion."' 33 The idea that punishment should be a "coercion ofrights" stems from Hegel's Kantian view of the purpose of punishment. 34 On thistheory, punishment of a criminal is:

[E]o ipso his implicit will, an embodiment of his freedom, his right; on thecontrary, it is also a right established in the criminal himself, i.e. in hisobjectively embodied will, in his action. The reason for this is that his action isthe action of a rational being and this implies that it is something universal andthat by doing it the criminal has laid down a law which he has explicitlyrecognized in his action and under which in consequence he should be broughtas under his right.'35

131. See GEORGE HEGEL, PHILOOPHY OF RiGHT 71 (T.M. Knox trans., Clarendon Press 1967)(1821).

132. Id. at 72.133. PeterG Stillman, Hegel' Idea ofPunishment, 14J. HIsT. PHIL. 169, 177 (1976).134. Seeid.135. HEGEL, supra note 131, at 70. Markus Dubber clarifies:To Hegel, a criminal act violates another's freedom. The offender therefore is understoodto act according to the maxim that she should violate another's freedom. Universalizingthis maxim produces the law that one should act so as to violate another's fieedom.

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The notion that punishment has, as its goal, respect for the criminal's rationalityhas further consequences. Particularly interesting for our purposes, it mandates theprinciple of nulla poena sine lege; the criminal must be aware that he is violating thelaw.136 The law must be known in order for it to be the law of the criminal himself; iflaw is "the property of a class which makes itself an exclusive clique," then for thosewho are ignorant of it "the justice they receive remains in their eyes a doompronounced ab extra."137 For Hegel, "[p]unishment should involve consentingcriminals," meaning that the laws should be reasonable and known in advance, andthe court system should be fair.'3 8 An emphasis on the consent of the criminalrequires that he know what he is consenting to and that the laws can be (and are)known to everyone in advance.' 39

2. Conversion and Theft

Retributivists often draw a distinction between intentional wrongdoing and mere"inadvertent transgression on the rights of others.' 140 A good-faith dispute over whois entitled to certain property is handled civilly in tort, while an attempt to negateanother's rights to property, without any justification, is a threat to all propertyentitlements and, as such, is criminal. 41 Thus a beachcomber, criminally prosecutedfor stealing logs from a logging company's property may offer the defense that hethought the logs were driftwood and therefore thought he had a right to salvagethem. "2 His conduct is tortious, not criminal:

The beachcomber by his action is not denying that the company's rights arerelevant. Rather he accepts that the company has rights, but simply disputes thatthey extend to the logs in question. The appropriate response by the logging

Honoring the offender's rationality requires the application of this universal law to her.Markus Dirk Dubber, Rediscovering Hegels Theory of Crime and Punishment, 92 MICH. L. REv.1577, 1583 (1994) (reviewing MARK TUNICK, HEGEL'S POLMCAL PHILOSOPHY: INTERPRETING THE

PRAcrICEOF LEGALPUNISHMENT (1992)).

136. SeeBLAcK'sLAwDICnONARY 1098 (8thed. 2004); Stillman, supranote 133, at 180.137. HEGEL, supranote 131,at 145.138. Stillman, supra note 133, at 180.

139. Id.140. Chapman & Trebilcock, supra note 29, at 780.141. Cf id. at 780-81.142. Id. at 781 (borrowing the facts of Regina v. Shymkowich, [1954] S.C.R. 606). For a

parallel American case, consider Morissette v. United States, 342 U.S. 246, 275-76 (1952), whichheld that a junk dealer who removed spent shell casings from an Air Force bombing range has adefense against a charge of "knowingly convert[ing]" government property if he honestly believedthat the casings were abandoned by the government.

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company is a private action against the beachcomber's conversion of the twologs.

14 3

Hegel says of such a dispute that it:

[E]ntails the recognition of rightness as the universal and decisive factor, so thatit is common ground that the thing in dispute should belong to the party who hasthe right to it. The suit is concerned only with the subsumption of the thing underthe property of one or other of the parties-a straightforward negative judgment,where, in the predicate "mine," only the particular is negated.'44

On the other hand, intentional criminal theft is not merely a dispute aboutentitlements, but rather an attempt to negate the category of entitlements; that is, thethief's "actions amount to more than a denial that the company has any rights to theselogs; instead, they amount to a denial of the relevance of rights altogether.' '145 Or, asErnest Weinrib writes:

Takings justify liability inasmuch as they imply a general denial of the validityof right. A taking is an illegitimate appropriation: the taker attempts to assertdominion over something that is already a physical or proprietary embodimentof another's personality. In acting as if the embodiments of another's personalityare available for appropriation, the taker is treating those entitlements as if theywere devoid of free will. Thus, the taker signals through his actions that he doesnot recognize the categorical difference between persons, who have a capacityfor rights, and other entities, which lack free will and therefore do not have thatcapacity. Because free will is the substance of right, and because personalityrepresents the most fundamental condition of the will's freedom, to treat personsas if they were entities lacking free will is to imply that right can have no field ofapplication.

46

Thus the Hegelian account draws a clear distinction between theft andconversion, a distinction that is more problematic under an efficiency account inwhich the only goal is to deter inefficient non-market transactions. On the other hand,the efficiency account may do a more sophisticated job of explaining somedistinctions that the law draws. For instance, the trespasser who is willing to pay inadvance for his trespass, but who is rebuffed by the landowner, is faced with punitivedamages. 147 The Hegelian account would ask whether the trespasser is denying the

143. Chapman& Trebilcock, supra note 29, at 781.144. HEGEL,supra note 131, at 65.145. Chapman & Trebilcock, supra note 29, at 781.146. Ernest J. Weinrib, Right and Advantage in Private Law, in HEGEL AND LEGAL THEORY

275-76 (Drucilla Cornell et al. eds., 1991); see also Stillman, supra note 133, at 171-72.147. See, e.g., Jacque v. Steenberg Homes, Inc., 563 N.W.2d 154, 165 (Wis. 1997).

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category of right by violating property rights, or affirming the category by trying tonegotiate in good faith, agreeing to pay the costs, and then proceeding in theexpectation that he will in fact pay the landowner's costs. Such questions do notappear susceptible to answers proceeding from general ideas of right. On the otherhand, the distinction between property rules and liability rules, grounded in notions ofefficient market transactions, here provides an elegant answer.

3. Contract

American law regularly allows people to intentionally violate the rights of otherswithout "punishing" them, leaving only a non-punitive civil remedy.la8This is ourlaw of contract, which seeks only to compensate the injured party, not to punish thebreaching party.149 The promisor can easily escape his promise, trampling theentitlements of his promisee; the promisee gets only expectation damages, and thepromisor is never "punished" for his breach.' 0

This is superficially at odds with the Hegelian account sketched above. Hegel'smoral account of contracting is general and focused on the notion of consent; it doesnot address the questions of the appropriate remedy. 15 1 However, the Hegelianaccount can deal with this objection readily:

[T]his objection fails to fully appreciate to what matter the ... state, as guardianof the category of Right, is properly to respond in the form of a criminal lawaction. In the standard breach of contract case, and in particular in the intentional(often "efficient") breach of contract case, the breaching party is not reallydenying the relevance of rights to the dispute. Rather, the breaching party is at alltimes prepared to pay compensation, and thus to recognize the category of Rightif a breach of the contract or damages flowing from that breach can be proved.In this respect, she is quite unlike the thief who, at the time the impugnedtransaction takes place, steals without any intention of paying compensation.'5 2

This distinction solves the difficulty of contract law. It also explains why some sortsof intentional contract breach are criminal. Generally speaking, those cases in which

148. See, e.g., Oliver Wendell Holmes, The Path of the Law, 10 HARv. L. REv. 457, 462(1897).

149. See FARNSWORTH ETAL., CONTRACrS: CASEs AND MATERIALS 1 (6th ed. 2001) ("[Thelaw is concerned mainly with relief of promises to redress breach and not with punishment ofpromisors to compelperformance.'); Holmes, supra note 148, at 462 ("The duty to keep a contract atcommon law means a prediction that you must pay damages if you do not keep it-and nothingelse.").

150. SeeFARNswORTH, supranote 149, at 1-2.151. See HEGEL, supra note 131, at 57-64. Hegel's discussion of"Wrong" similarly does not

address the issue. Id. at 64-74.152. Chapman & Trebilcock, supra note 29, at 783.

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the promisor never intended either to perform or pay damages are characterized as"fraud," and can often support criminal punishment.153

B. The Difficulties with Ex Ante Willingness to Pay

The Hegelian account of punishment serves as a sophisticated representative ofretributive punishment theory and such punishment's interactions with civil law.Economic and deterrence theories fail to fully capture community intuitions about theproblem of ex ante willingness to pay. In some respects, it seems that the Hegelianaccount does better. But problems remain. Classical retributive theory does notentirely explain why we object to ex ante willingness to pay for crimes and torts.

1. Crime and Autonomy

154Let us begin with the simple example of Lucius Veratius and see what theHegelian account would say about him. On one hand, the explanation is simpleenough: Veratius has coerced the rights of others, so he should be punished by asimilar coercion of rights. Simply collecting the twenty-five asses handed out by hisslaves155 does not provide for that coercion of rights because he is voluntarily payingthe price. As a result, the payment fails to constitute a real punishment. This is whysociety objects to his conduct and seeks to punish him more severely.

But that does not tell the whole story. Veratius is acting quite rationally on alower level of abstraction than that at which Hegel was operating. Rather thanwilling, by his actions, a universal law of "violate the autonomy of others," whichwould then have to be applied to him, he is simply applying a known, legislated law.Respecting his autonomy, treating him as "consenting to punishment," would seem torequire applying to him the punishment of the published law that he knowinglybroke-the punishment to which he literally consented.

The tension here is between two conceptions of "law": the indeterminate Kantiangeneral law, theoretically willed into existence by criminals, of "violate others'rights"; and the literal, legislated law, of "pay twenty-five asses for iniuria." In mostcases, this tension is buried below the surface of Hegelian punishment theory. Thetypical thief does not want to go to prison, so sentencing him to prison is a coercionof his autonomy that both satisfies the determinate legislated law and fulfills theHegelian condition of satisfying one right's coercion with another. The theory breaks

153. See, e.g., Wharf (Holdings) Ltd. v. United Int'l Holdings, Inc., 532 U.S. 588, 596 (2001)(holding that where the seller of an option on securities had a "secret reservation" not to permit itsexercise, the seller is liable not merely for contract breach but also for securities fraud underSecurities Exchange Act § 10(b)).

154. See supra notes 1-4 and accompanying text.155. CROOK, supranote 1, at250-51.

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down only in the unusual case in which the offender consciously wants to accept thepunishment. Only here do the two conceptions of law conflict.

Both are, however, necessary to the Hegelian account. Punishing peoplewhimsically, without a fixed, known law, would not be treating them as rationalbeings and would deny their consent to the system. But inflicting on them apunishment that they were willing to undergo before committing the crime would notviolate their autonomy, would not annul their crime, and so would not treat them asrational beings subject to punishment. No solution to the problem posed by Veratiusis satisfactory: punishing him according to the letter of the law abandons the idea ofpunishment, while punishing him according to his deserts abandons the idea of law.

2. Civil Disobedience

The two conceptions of law noted above interact differently in the area of civildisobedience, giving what is in some ways a rather satisfactory result. The law of thelegislature works the same here as with any other crime: the legislature passes the lawto punish, annul, and deter, etc. crime, and the protestor violates that law with theunderstanding that he will receive the set punishment for doing so. But the generallaw willed into being by the protestor is not the same as with other laws: it is not"coerce the rights of others [for your own personal benefit]," but something nobler,"violate a law if it is unjust."' 5 6 Quite likely there are still reasons on the Hegelianaccount to carry out the punishment fixed by the law. 57 There is somewhat less

156. This is still, I think, problematic as a general maxim of conduct In Kantian terms, it isdoubtful that anyone could wish that this maxim would become a universal law, IMMANUEL KANT,

GROUNDING FOR THE METAPHYSICS OF MORALs 30 (James W. Ellington trans., Hackett 1993) (1785),because doing so would negate the power of democracy to bind people to properly enacted laws.Nonetheless, it is not the same sort of self-interested coercion of the autonomy of others that isinstantiated in typical crimes.

157. The protestors are still doing whatever bad thing the law, presumably for good reason,prohibits. One imagines that the IRS agents whose files Schoon and company drenched in blood feltthat their autonomy had been coerced. Southem lunch-counter owners faced with sit-ins probably feltthe same way.

It is probably a bit more complicated than that. The distinction that Schoon drew between"direct" and "indirect" civil disobedience, see supra note 120, is a helpful starting point. In "indirect"civil disobedience-violating a law other than the one you're protesting, United States v. Schoon,971 E2d 193, 196 (9th Cir. 1991)-the previous paragraph is applicable: protestors have brokensome law that concededly has a good purpose. Schoon presumably did not think that people shouldgenerally destroy government property, and most protestors arrested for breach of the peace ortrespass probably do not think that those crimes are generally a good idea. In "direct" civildisobedience, however, the assumption that the law only prohibits bad actions breaks down. Civilrights marchers might not have thought that everyone should be able to disturb the peace at all times,but they probably did think that everyone should be able to sit anywhere they want on a public bus.Most of us would say they were right Thus while the IRS agents may have had a legitimatecomplaint against Schoon, whether or not his protest was justified, the Southern lunch-counterowners had considerably less cause to complain. They had no right to exclude blacks to begin with.

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reason, however, to want to go beyond this quantum of punishment and furtherpunish the protestors to coerce their autonomy.

This is not a particularly complete explanation of civil disobedience. Inparticular, it plays a bit loose with the question of what general law protestors areenacting: while they see their actions as nobly motivated, many thieves might feel thesame way. The retributivist account depends more on intentional coercion of therights of others than it does on the subjective motivation of the actor doing thecoercion and does not fully explain the distinction between civil disobedience andconduct like that of Veratius.

3. Tort and Contract

As we have seen, committing a crime while intending to pay the penalty does notsatisfy the retributive purpose of punishment. Instead, it coerces the rights of otherswithout a counterbalancing coercion of the rights of the actor.

As we have also seen, some coercions of the rights of others need not be met bycorresponding rights-coercion punishments. Unintentional violations (e.g.,accidents), or violations that consist of intentional actions that are not intended toviolate rights (e.g., conversion of what an actor thought was unclaimed property) aretreated as torts and remedied only by compensatory damages. 58 Treating the actorrationally here does not require punishment; his will is not to violate the rights ofothers, and so violating his rights is not necessary to correct the effects of his action.

Breaches of contract can also be explained-4o a point. Here, no punishment iswarranted because the breaching party is not denying the rights of the counterparty;rather, he is ready, at the time of breach, to pay compensation. The problem for theHegelian account is that the same is true of Veratius. He, too, is willing tocompensate those whom he slaps.

The distinction is still salvageable. The difference is not between the specificintents of a breaching contract party and Veratius; rather, it is between how wegenerally conceive of the different activities. In general, we think of contract as a

In general, targets ofjustifie, direct civil disobedience have not really had their rights coerced.Although this is tangential to the main argument, it is a bit problematic. If the Hegelian account

cannot provide a reason for punishing justified direct civil disobedience, and that punishment canonly be rather imperfectly explained on a deterrence theory, see supra pp. 353-54, then we suspectthat such protestors ought not to be punished-which defeats their goal of getting punished to callattention to injustice. Perhaps the solution is simply that we cannot necessarily tell at the time whatcivil disobedience is justified and what is not. On this view, civil disobedience always involves doingsomething harmful that might warrant punishment: violating the law, that is, ignoring the results ofthe democratic process because they think that they are right and the people are wrong. This could besaid to violate the rights of the populace to have its will enacted as law, and is enough of a bad thingto wanant imposition of the punishment set in the criminal law.

158. Such damages constitute a coercion of rights, but not a punitive one as the point is to payback the victim, not to coerce the tortfeasor's rights. The latter effect is only incidental.

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regime in which one's rights are upheld either by performance or payment ofdamages. One's right in a contract is to the benefit of the bargain, which one canreceive either in specific performance or in expectation damages. Contracts, at leastsince Holmes, are conceived of economically; one's rights are to a quantum of value,not a specific thing. 159 Thus, paying damages rather than performing is not really acoercion of rights at all. On the other hand, we generally believe that we have aspecific right not to be slapped in the face. The difference between Veratius's iniuriaand a contract breach is that, while both actors stand ready to make good their injury,society conceives of those injuries in different ways: one is a violation of rights, theother simply a choice of which form of the right to uphold. In Hegelian terms,160

Veratius is instantiating a universal law along the lines of "coerce the rights ofothers," while the breaching contract party is applying a universal law more likeHolmes's famous statement about the meaning of contract: "The duty to keep acontract at common law means a prediction that you must pay damages if you do notkeep it-and nothing else."' 61

This distinction becomes much murkier when we move to Ford, arguably themodem descendant of Veratius. Like Veratius, Ford assaulted the bodily integrity of.... 162

others because the penalties for doing so were outweighed by the benefits to it.

Ford's conduct can be characterized in different ways depending on which level ofgenerality you look at: in general, Ford realized that some number of people would• • 163 ,-

die because of its cars, but it never intentionally killed any particular person. Thedistinction between "accident" and "intentional harm" may have been clear enough inRoman times, or even to Hegel, but as the modem world engages in more large-scaleactivities that cause accidents, and is more aware of the statistical certainty that someaccidents will result from these activities, that distinction is no longer tenable.

The retributivist's question about Ford would probably be, "did Fordintentionally coerce the rights of others (leading to punishment), or should its actionsbe characterized as an accident (leading to only tort damages)?" This question is notobviously informed by Ford's ex ante willingness to pay, and calculation of, damages.That ex ante calculation might be taken as evidence that the conduct is bettercharacterized as intentional rather than as accidental, but such a reading would be abit nafve when one realizes that any company engaging in large-scale, potentiallyaccident-causing activities prepares to pay damages for those activities. 164 If the

159. When contracts are less economic and more about specific things (e.g., with sentimentalvalue) they are more likely to be enforced specifically. See U.C.C. § 2-716(1) (2000) ("Specificperformance may be decreed where the goods are unique or in other proper circumstances.").

160. SeeStillman, supranote 133, at 177.161. Holmes, supra note 148, at 462.162. Compare CROOK, supra note 1, at 250-51, with Grimshaw v. Ford Motor Co., 174 Cal.

Rptr. 348, 384 (Ct. App. 1981).163. See Viscusi, supra note 9, at 569-70.164. Cf Baker, supra note 19, at 275. In the most typical circumstances-where the actor

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Pinto explosions are best characterized as accidental, then the retributivist accountwould suggest that punitive damages are inappropriate; if they are best characterizedas intentional, then punitive damages may be appropriate-but punishing Fordbeyond the measure of its expected punishment (compensatory damages) brings intoplay some of the same paradoxes we saw with Veratius. 165 In neither case does theretributivist account answer questions about why Ford's ex ante calculations of itsliability seem to influence feelings about its ultimate guilt. In this sense, theretributivist account does not solve the central difficulties of willingness to pay.

V. HISTORICIZING THE WILLINGNESS TO PAY

Having suggested that the existing literature does not fully address the difficultiesin self-set prices on criminal or tortious activity, this article now turns to history for abrief examination of two crucial developments in the pricing of criminal1 66 acts. Thefirst of these developments is the prevalence, in early legal systems, of two differentand perhaps competing sets of penalties: talion, or "eye for an eye" punishments,' 67

and composition, or the payment of monetary penalties to the victims of crimes. 168

The second involves the development and refinement of Christian notions of sin andpenance, particularly since the Papal Revolution of the twelfth and thirteenthcenturies.169 These two trends shed light on the complexities of our modem notionsof crime and penalty. I also consider some more speculative historical analysis-Nietzsche's fascinating discussion of the origin of the concept of guilt in the relationof debtors and creditors.

who expects accidents and buys liability insurance-that willingness to pay is seen as a good thing,and even as an indicator that resulting accidents are a result of bad luck rather than moral fault. Seegenerally id

165. See supra Subsection l. B. 1.166. In this part, words like "criminal" and "crime" become a bit nebulous. Early legal

systems did not always distinguish crime and tort in the way that we do; crimes were often viewed asoffending their victim rather than the state's justice system, see James Q. Whitman, At Origins ofLaw and the State: Supervision of iolence, Mutilation of Bodies, or Setting of Prices?, 71 CH.-KENTL. REv. 41, 56 (1995)-thus the prevalence of composition penalties paid to the victim discussed inthis part. Similarly, the Church did not always distinguish crime and sin in the same way thatmodems do; crimes were generally sins, and sins were often punished criminally by church or stateauthorities. See HAROLD J. BERMAN, LAW AND REvOLUTION: THE FoRmATION OF THE WESTERNLEGALTRADmON 73 (1983).

167. Whitman, supra note 166, at 45-46.168. Id at 45-46,49-50.169. See BERMN, supra note 166, at 170-71.

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A. Talion and Composition

1. The Basic Development

Early legal systems are marked by two approaches to penalties for crime: talionicpunishments, in which those who harm others are visited with identical or similarharms ("an eye for an eye, a tooth for a tooth"),170 and composition, in which thosewho harm others pay monetary penalties to their victims.' 71

The dominant historical understanding of these two approaches is the "self-helpmodel." 72 In its simplest form, this model assumes that talionic punishment beganas private (or clan) vengeance. 17 The early state emerged to regulate talionicvengeance to avoid the escalation of violence characteristic of the state of nature. 174

Eventually, the state itself began to exact the talionic punishment and "monopolizethe legitimate use of violence." 75 Finally, the state replaced talionic punishment withthe more humane system of monetary composition.l/7

This model is subject to significant criticism. Most notably, James Whitmanargued that the model misinterprets the sources, which do not indicate a simple shiftfrom talion to composition. 177 First of all, the model misstates the chronology. Thebetter reading appears not to be that composition developed after talion, but that theywere constantly interrelated, with composition as a way for the offender to ransomhimself out of talionic punishment at the victim's option.178 Second, it drasticallyoversimplifies the meanings of the two types of penalties found in the archaic codes.As Whitman notes, the famous talionic codes are not exclusively devoted to talionicmutilation. 179 "Indeed, it is one of the most familiar facts about pre-modem law of allperiods that it makes heavy use of mutilation penalties."' 80 Similarly, the famouscomposition codes are not exclusively devoted to setting the prices for composition:

170. Whitman, supra note 166, at 46 (quoting Exodus 21:23-25).171. Id. at49-50.172. The description of the self-help model here comes from Whitman, supra note 166, at 41-

43.173. Id. at42.174. Id.175. Id The phrase, of course, is from Max Weber.176. Whitman, supra note 166, at 42.177. Id. at44-45.178. Id. at 56-57 (explaining the work of J.D. Michaelis, an eighteenth-century scholar of

Mosaic law). Thus the Twelve Tables provide that "If a person has maimed another's limb, let therebe retaliation in kind, unless he makes agreement for composition with him." Whitman, supra note166, at 46 (quoting 1 FoNTEs IlRus RoMANi ANTEJusTIIANI 53 (Salvatore Riccobono et al. eds.,1968)).

179. Id. at 47.180. Id. Whitman cites a rule from the Laws of Hammurabi, which dictates punishing a child

who strikes his father by cutting off his hand. Id.

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Here again, though, we should note immediately that the setting of compositionis only a sub-category of what we find. The larger category, quite clearly, is themore general category of price-setting. Many of the composition enactments areassociated with other forms of price-setting both of commodities and ofwages.181

Thus the self-help model is too simplistic in its treatment both of talion andcomposition, treating each as an independent category, when in fact each can beviewed as part of a larger theme of pre-modem law (mutilation or price-setting).

2. Composition and Talion as Price

The notion of composition as a species of price-setting is particularly importantfor our inquiry. Whitman concludes:

The archaic codes seem, on their face, to have been produced by authoritieswhose overarching aim, with regard to the money economy, was not to control asystem of vengeance, but to set a system of prices. The concern of the early stateas price-setter, on some level, it seems reasonable to hypothesize, was not firstand foremost the control of violence, but the control of payments in money andweighed metal. 182

On this view, the early dawning of legal consciousness shows an odd similarity to themodem law and economics revolution. The punishment of misbehavior is simply asubcategory of a larger economic systematizing, just one part of the need to regulatethe complete economy.

But such regulation, whether of the economy as a whole or of the economy ofcrime and revenge in particular, will always be unstable. Judge Posner understands,as the Laws of Eshnunna183 and the Burgundian Code' 84 did not, that prices forcommodities must ultimately vary based on the supply of and demand for thosecommodities.' 85 Since the widespread failure of communist states, no modemwestern legislature is likely to promulgate a set of prices for all marketable goods, andstate attempts to set or influence the prices of individual goods are highlycontroversial. Modem criminal codes, like the Code of Hammurabi, set the penaltiesfor all recognized crimes.' 86 The correctness of this approach, for crimes though not

181. Whitman, supra note 166,at51.182. Id at 81.183. See id. at 51-52.184. See id. at 52-53.185. See POSNER, supra note 23, at 4-5.186. Indeed, modem codes go further than did the ancient ones in this respect. The modem

maxim is nulla crimen, nulla poena, sine lege, BERMAN, supra note 166, at 186; modem criminallaw does not merely aim to be comprehensive, it is required to be. An offense that does not appear in

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for commodities, cannot seriously be questioned; basic principles of legality requirethat crimes and their punishments be set in advance.

But the early linkage between punishment-setting and general price-setting isnonetheless instructive. Early legislators saw them as two parts of the sameproblem, 187 and presumably they saw it as a problem: How do you make people paythe right price for grain? How do you make people exact only the proper punishmentfor maiming? The self-help model can give some insights. However these codesarose, it seems reasonable to think that one of their goals was to repress escalatingfeud violence and replace it with correctly calibrated punishments for offenses. 1

But this repression could not have been easy; feuding clans who were accustomed totaking what vengeance they found appropriate would not easily acquiesce in allowingthe state to regulate and supplant their power to do so. It is quite plausible that thisunease is a common attribute of humanity, not merely of archaic feud cultures, and itstems not merely from a desire for vengeance but also from an uncertainty that theproper penalty for a crime or a tort can be set in advance by a table.

B. Sin and Atonement

1. The Sacrament of Atonement

While early evidence is not abundant, it seems that in its first millenniumChristianity featured some form of penance for serious sins89 This penance waspublic and involved excommunication, demonstration of a change of heart, a periodof repentance and probation, and finally a rite of reconciliation.' 90 Penance typicallyinvolved penitential works and reconciliation with God, the community, and thevictims of the penitent's actions. 191

In the eleventh and twelfth centuries, though, the westem Church developed anew doctrine of penance, which incorporated the notion of Purgatory and affirmed apriestly power to absolve the penitent.192 This priestly power is particularly

the codes is not an offense; a punishment that is not specified in advance cannot be inflicted.187. See Whitrnan, supra note 166, at 51.188. Regardless of whether the self-help model's chronology is right, there are examples of

societies where the punishment for harming a person is exacted by the victim's kinship group. Insome cases the punishment is worse than the crime, which leads to an escalating cycle of vengeanceand counter-vengeance. See, e.g., id at 46-47. An interesting parallel may be drawn between thisvendetta system and another early form of economic organization: the gift exchange, in which thegoal was not equivalency of value but rather escalation of gifts. See MARCEL MAuss, THE GITFr 1-2,63 (Ian Cunnison trans., Cohen & West Ltd. 1966) (1950).

189. See RICHARD P. McBR[EN, 2 CATHOLICISM 777-78 (1980).190. Id. at 778.191. BERMAN,supra note 166, at 172.192. See id. at 166-185 (tracing the development of the doctrine of Purgatory, the new

sacrament of penance, and the rise of Anselm's doctrine, set forth in Cur deus homo?, of Christ's

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important; it lent a particular judicial aspect to the proceedings that was notpreviously present:

[A] new formula was introduced in the West: Ego te absolvo ("I absolve you").This was at first interpreted as the priest's certification of God's action, resultingfrom contrition and confession. In the twelfth century, however, it wasinterpreted as having a performative, that is, a sacramental, as well as adeclarative, effect.1 93

Coupled with the rise of penitential manuals, which provided numeric formulas forhow much penance each particular sin required,' 94 these developments led inexorablyto a much more mechanical view of sin and penance. A subjective practice in whichsinners did good works, prayed, and reconciled with their victims and communities inthe hope of winning God's grace was replaced by a formal system in which a sinnerconfessed to his priest and received absolution after performing a penance set out in amanual. 1

95

Such a system is obviously subject to abuses. The pre-Reformation sale ofindulgences is the classic abuse in which the liturgical price for sin-contrition, actsof atonement, prayers, etc.-was replaced by a literal, monetary price.1 96 Whileearlier, and eastern, forms of "charismatic" penance 197 placed real contrition andreconciliation in the foreground, the later western formulaic approach highlighted theprice equivalency for sins.1 98

2. Anselm and Retribution

A second, intimately related, doctrinal change of the early second millenniumalso contributed to the rise of equivalency notions ofjustice. This is Anselm's theoryof Jesus Christ's sacrifice for mankind. 199 Berman gives the argument as briefly ascan be done:

God created man for eternal blessedness. This blessedness requires that manfreely submit his will to God. Man, however, chose to disobey God, and his sin

sacrifice and atonement).193. Id at 173.194. See id at 69. This discussion owes generally to James Q. Whitnan, Lecture on The

Development of the Western Legal Tradition, Yale Law School (Nov. 7,2002).195. Id.196. See BERMAN, supra note 166, at 171.197. Id. at 173.198. Seeid. at 171.199. See generally ST. ANsELM, WHY GOD BECAME MAN AND THE ViRGIN CONCEPTION AND

ORIGINAL SIN 26-27 (Joseph M. Colleran trans., Magi Books, Inc. 1969); BERMAN, supra note 166,at 177-85 (expounding Anselm's theology and its relation to retributive justice).

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of disobedience is transmitted by inheritance to everyone. Justice requires eitherthat man be punished in accordance with his sin, or else that he makesatisfaction for the dishonoring of God. As for punishment, none would beadequate.... As for satisfaction, there is nothing man can offer to God thatwould be valuable enough to restore his honor. Thus man cannot, though heought to, atone for his sin. God can (since he can do anything), but he ought notto. Since only God can and only man ought to make an offering which wouldconstitute satisfaction, it must be made by a God-Man [Jesus Christ]. 200

This theory had enormous implications for theology; our interest in it, though, lies inits impact on law. As Berman writes, "redemption was explained essentially in termsof a legal transaction."20' That transaction was not, however, a mere exchange. Itwas a repayment to restore the order of justice; Christ was necessary because no otheratonement could adequately expiate man's sins, and those sins needed to beexpiated2 2 This view of the necessity of Christ's sacrifice influenced views of thenecessity of temporal punishment:

The new concepts of sin and punishment based on the doctrine of atonementwere not justified in Germanic terms of reconciliation as an altemative tovengeance, or in Platonic terms of deterrence and rehabilitation, or in OldTestament terms of the covenant between God and Israel. . . .The mainjustification given by Anselm and by his successors in Westem theology was theconcept of justice itself Justice required that every sin (crime) be paid for bytemporal suffering; that the suffering, the penalty, be appropriate to the sinful act;and that it vindicate ("avenge") the particular law that was violated.20 3

3. Theology and Willingness to Pay

These developments in religious doctrine provide several insights into themodem discomfort about ex ante willingness to pay for offenses. The rise of a moremechanical, less charismatic form of penance supported a similar shift in criminalpunishment but did not fully displace the felt need for charismatic penance andpunishment. Controversy over indulgences and mechanical forms of penance may bedriven by the idea that these forms of penance omit or downplay the necessity forcontrition and reconciliation with the community. The same might be said of secularexamples of ex ante willingness to pay. Veratius's conduct was shocking because heunderstood iniuria and compensation as a simple transaction.2

04 A more correct

understanding would involve reconciliation with his victims and genuine contrition

200. BERMAN, supra note 166, at 177.201. Id at 181.202. Id at 177.203. Id. at 183.204. See CROOK, supra note 1, at 250-51.

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for his actions. Because paying for one iniuria and then embarking on the nextnegates the possibility of reconciliation or contrition, Veratius's readiness to pay was adisproof of those necessary ingredients, and so should lead to greater moralcondemnation.

The revolutionary theology of Anselm also has something to teach us about exante willingness to pay. Anselm's approach stressed the importance of justice as anindependent consideration.2 °5 Punishment is not merely about compensating victims,but also about restoring the balance of justice that has been denied by the crime.Such a theory might support simple accounting notions of guilt and repayment, underwhich ex ante willingness to pay would be no cause for condemnation. At the sametime, though, it makes clear that the issue is not just paying for the particular concreteharms caused by a crime or tort. An actor who is willing to pay for the harm hecauses, but who considers only particular harms and not the violation of justicecaused by his action, is justifiably subject to condemnation; his willingness to paymisunderstands what, exactly, he is paying for.

C. Guilt and Debt

In this abbreviated tour of the historical origins of society's attitudes toward guilt,punishment, and payment, one further stop is warranted. This is Nietzsche's famousquestion: "[H]ave the previous exponents of the genealogy of morals had even theslightest inkling that the central moral concept of 'guilt' [Schuld] originated from thevery material concept of 'debt' [Schulden]?"206 Nietzsche's view is that, for most ofits history, punishment was exacted

out of anger at harm done, anger which is then taken out on the person whocauses it-albeit held in check and modified by the idea that any damagesomehow has an equivalent and can really be paid off, even if this is through thepain of the culprit.20

7

He then traces this equivalency to primitive debtor-creditor law, which gave "preciseand in part horrifically detailed measurements" of the "pounds of flesh" that creditorscould take from insolvent debtors.208 He also gleefully notes that the Twelve Tablesat Rome, moving beyond this primitivism, "decreed the amount which creditorsexcised in such cases a matter of indifference, 'si plus minusve secuerunt, nefraudeesto."'' 209 He also notes the visceral satisfaction that inflicting pain can provide, and

205. See BERMAN, supra note 166, at 177.206. FRiEDRICH NIEZSCHE, ON THE GENEALOGY OF MORALs 44 (Douglas Smith trans.,

Oxford Univ. Press 1996) (1887) (bracketed German inserted by Smith).207. Id. at 45 (emphasis in original).208. Id. at 46.209. id. The Latin of the Twelve Tables translates "if they take more or less, let it be no

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the "festivity" of this infliction of pain, to explain why such punishments could beseen as equivalents of the debtor's debt or the criminal's crime.21°

This might provide an intriguing insight into the problem of ex ante willingnessto pay. In Nietzsche's view, guilt and debt are genetically related: punishment forguilt is a kind of payment for debt. Actors like Ford and Veratius understand this, to apoint; they are willing to pay for their offenses, which they see as a kind of debt andare surprised when that ex ante willingness to pay is not enough-in fact, it is anexacerbating factor in their guilt. The reason that they are surprised is not becausethey misunderstand the relation between guilt and debt, but that they misunderstandthe pre-history of debt. The origins of an exchange treatment for guilt may be in debt,but debt to the ancients was not the dry accounting matter it is to us now. The risk ofdebt and the possibility of that "festive" infliction of pain when debt could not berepaid made the concept of debt less dry and more visceral, with the result thatgrounding the concepts of criminal and moral guilt in debt was acceptable andcompelling. Modem bankruptcy laws and economic sophistication have made ourtreatment of debt dry and economic, with the result that the continued mapping ofmoral guilt onto concepts of debt, like that suggested by Ford's cost-benefit analysis,is no longer compelling. When guilt and debt were both terrible concepts, they couldbe equated; now that debt has become mundane, the link between them showsoccasional cracks.

VI. SOME APPROACHES TO PRE-PAYMENT

Informed by economic retributivist and historical perspective on the problem ofex ante willingness to pay for legal violations, we can now begin to draw some basicconclusions about the effect of that willingness on subsequent determinations ofmoral, criminal, or tort blame. This part will examine three important areas ofinterest: notions of price, problems of hubris and inequality, and issues of remorse.

A. Prices on Crimes

1. Prices on Lives and Prices on Crimes

The notion that setting prices on human lives is uncomfortable for most laymenis not novel. Kip Viscusi has written about jurors' reactions to cost-benefit analyses

211in the context of Grimshaw and similar cases. Viscusi, writing from the law andeconomics perspective, deplores jurors' emotional responses that lead to uneconomic

crime."210. Id. at47-48.

211. See Viscusi, supra note 9, at 547, 558; see also Robert J. MacCou, The Costs andBenefits of Letting Juries Punish Corporations: Comment on ktscusi, 52 STAN. L. REV. 1821, 1825(2000).

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damage awards like the one in Grimshaw.212 Other scholars support the jurors'intuitions and question the validity of cost-benefit analysis in making decisions abouthuman lives.213 Lisa Heinzerling, in particular, has mounted a sustained attack on theuse of this practice in environmental and safety regulation, using a combination ofintuitionist and economic arguments to refute the models of economists like

VIC~ .214Viscusi.21

Heinzerling and others who question cost-benefit analysis may have a point,though from an economic perspective their work is often suspect. 2 1 However, thecost-benefit analysis in Grimshaw can be seen from two perspectives. On one hand,what Ford (allegedly) did was no different than the cost-benefit analysis regularlyperformed by the Environmental Protection Agency ("EPA"), Occupational, Healthand Safety Agency ("OSHA"), the Department of Transportation, and othergovernment agencies which regularly make tradeoffs between human life andeconomic efficiency.216 On the other hand, what Ford did was troubling, not onlybecause it priced human life, but also, because it priced its own conduct. I argue thatthe latter aspect of Ford's behavior is under-analyzed and may have as much to dowith what got it into trouble as its pricing of human lives.

Thus, some argue that the prices set by economists on human lives are toolow.2 17 If true, this might be a justification for punitive damages, both to correctinsufficient safety incentives provided by this mistaken pricing, and to punishcompanies for callously disregarding the real value of human life. But there isevidence to suggest that juries are not punishing companies because those companies'

212. See MacCoun, supra note 211, at 1822-23.213. Cf id. at 1827-28.214. See Frank Ackerman & Lisa Heinzerling, Pricing the Priceless: Cost-Benefit Analysis of

Environmental Protection, 150 U. PA. L. REV. 1553, 1573-75 (2002); Lisa Heinzerling,Correspondence, Discounting Life, 108 YALE L.J. 1911, 1911 (1999) [hereinafter Heinzerling,Discounting Life]; Lisa Heinzerling, Comment, The Rights of Statistical People, 24 HARv. ENVrL. L.REv. 189, 189 (2000) [hereinafter Heinzerling, Statistical People].

215. For instance, Heinzerling chides economists for not "calculat[ing] the value of bothstatistical life and life itself," but instead "measurfing] only the value of risk [of death] and not thevalue of life." Heinzerling, Statistical People, supra note 214, at 204. This refers to the fact thateconomists construct the value of statistical lives by asking how much people must be paid (e.g., inincreased wages for risky jobs) to accept small risks of death. Id. at 203-04. Heinzerling's objectionis, however, surely misplaced; it is like a losing roulette player complaining that his $1 should havebought not only a 1-in-38 chance of winning $35, but also (separately) $35 itself.

216. Consider, for example, Richard Epstein's rhetorical suggestion that, if Pinto was acriminal, then so were the federal regulators who approved its design. See Epstein, supra note 55, at15, 18.

217. See, e.g., Ackerman & Heinzerling, supra note 214, at 1566 (arguing that economistsneglect the value of peoples' lives to other people); Heinzerling, Discounting Life, supra note 214, at1913 ("These 'willingness-to-pay' studies do not measure the ultimate value a person places on herown life; they measure only the value she places on an increased risk of death."); Heinzerling,Statistical People, supra note 214, at 204-05 (placing monetary values on life and risk).

2004/05]

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estimates of the value of life are too low. Viscusi conducted a study of mock jurors toexamine their attitudes toward risk analysis and punitive damages.218 Among thevariables in his study was the value used to conduct cost-benefit analyses.2 19 HisScenario 3 involved a company using expected jury verdicts (compensatorydamages), as Ford allegedly did, to value lost lives at $800,000; while Scenario 4involved a company using the approach of the National Highway Traffic SafetyAdministration (NHTSA) to value those lives at $3 million.220 The results wererevealing:

[U]ndertaking a sound risk analysis does not seem to be beneficial to thecompany's prospects. The propensity of the respondents to award punitivedamages is almost identical--O.93-in each case. But the level of punitivedamages awarded turns out to be greater when the company performs theanalysis correctly [using the NHTSA approach] than when it simply uses thecompensatory damages value. The geometric mean award value increases from$4.0 million in Scenario 3 to $5.3 million in Scenario 4. The median awardvalue is $3.5 million in Scenario 3, less than half the $10 million median valuefor Scenario 4--a statistically significant difference.22 i

Thus, valuing lives more highly led to greater punitive damages, which suggests thatjuries are not punishing companies (only) for undervaluing human life.

Viscusi's explanation for the difference involves "anchoring effects":

[T]he higher value-of-life amount used by the company in Scenario 4 ascompared to Scenario 3 provides a dollar anchor for the jury in determining theappropriate punitive damages award. Somewhat perversely, use of a highervalue-of-life estimate in a company's internal analysis may raise the target awardlevel in jurors' minds.

222

This explanation is consistent with the idea that juries are simply punishingcompanies for placing a value on human life, though they themselves are using thosesame companies' values as a measure of how much the companies should bepunished. But another difference between Scenarios 3 and 4 is that Scenario 4mentions that its valuation is that used by NHTSA to set safety standards.2 2 3 Thus,while both scenarios involve a company setting a value on life, Scenario 4's value is

218. Viscusi, supra note 9, at 552-53.219. See id220. Id at 592.221. Id. at 558.222. Id223. Viscusi, supra note 9, at 592. In Scenario 4, mock jurors were told that "the company

used a value of $3 million per accidental death, which is the value used by the [NHTSA] in settingauto safety standards." Viscusi, supra note 9, at 555.

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arguably more legalistic. It looks more like a price than a sanction. While the tortdamages at issue in Scenario 3 are a prediction of what the legal system will make thecompanypay for causing harm, they are based on ultimately unpredictable future juryverdicts.2 4 The valuations in Scenario 4, on the other hand, are taken directly from asort of price list officially sanctioned by the law.225 There may be greater discomfortabout a private actor co-opting a pre-set legal standard than about that actor predictinga punishment that ultimately remains in the hands of independent jurors.

This becomes more clear when we consider the example of Lucius Veratius.226

His outrageousness was not in valuing the harm he actually did "setting a price onhuman [slapping]"-but rather in co-opting the prices set by the law. The core of theproblem is not pricing harms, but rather pricing law violation.

2. The Difficulties of Pre-set Sanctions

In many respects, putting "prices" on law violations22 7 is a commendable andnecessary thing. It provides actors with notice of what is forbidden and exactly howforbidden it is. Both aspects are important. Actors should be on notice, not only thatboth speeding and murder are illegal, but also, that the penalties attached to the latterare much greater than those attached to the former.2 2 8 The differences in penaltiesindicate the different importance society attaches to different types of violations.Rational actors must have the chance to consider the societal importance of a normwhen deciding whether to conform to it.

Problems occur when an actor takes these penalties completely seriously as aself-contained price list. Veratius did this, viewing the penalty for iniuria not as anindication of societal disapproval but as simply a price to pay.229 Ford did the samewhen it made calculations about the price for committing torts and then prepared to

230pay that price. It does not matter if Ford calculated correctly or how it did thecalculation: the act of setting the price is the error. As we have seen, had thecompany used a higher, more accurate value for wrongful-death damages, rather than

224. Cf id. at 592.225. Cf id Of course, in an important sense, the NIITSA valuations are not really a price,

because the NHTSA does not charge anyone these amounts for killing drivers. Rather, it uses thesevalues as part of its own cost-benefit analysis in setting regulatory standards. Id

226. See CROOK, supra note 1, at 250-51.227. Here I ignore the distinction drawn by Cooter, see Cooter, supra note 63, at 1523, and

simply use the term "price" to refer to pre-set, listed penalties, whether prices or sanctions.228. See BMW, Inc. v. Gore, 517 U.S. 559, 574 (1996) ("Elementary notions of faimess

enshrined in our constitutional jurisprudence dictate that a person receive fair notice not only of theconduct that will subject him to punishment, but also of the severity of the penalty that a State mayimpose.").

229. See supra notes 1-4 and accompanying text.

230. See supra notes 5-12 and accompanying text.

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the lower value that Ford calculated courts would make it pay,23 the punitive232damages that the jury awarded might have been higher. What is at stake is not the

cost-benefit analysis, but rather Ford's conscious decision to pay the price fornegligence.

This reasoning also provides a way to understand civil disobedience and thenecessity defense. The commentators on Schoon dutifully point out that Schoon andcompany made a mistake:

The necessity defense has no role to play in a strategy of civil disobedience. Thepoint of civil disobedience is to force a society to recognize the contradiction ofusing a system of justice to defend an unjust institution. If the person practicingcivil disobedience is set free not because the offensive institution has beenremoved but because the system of justice has made an exception, then thecontradiction remains hidden, and the object of the protest is lost.

Of course, civil disobedience in this form is not the only sort of politicalprotest. And it is unrealistic to assume that all protesters will remain undeterredby the prospect of prosecution. Nevertheless, in an important sense the use of thenecessity defense not only conflicts with a commitment to order and majorityrule, but also robs the protest itself of some of its demonstrative power.233

This is fine; but it understates the real impact of civil disobedience. Submission to thepunishment has its effect not merely because the public sees a non-violent, heroicfigure like Dr. King languishing in jail for following his conscience. Rather, it iseffective and striking because the very willingness to accept society's price for thesupposed criminal action indicates a profound disrespect for the legal system. 234

Gandhi was correct in his speech to a judge who sentenced him for sedition:

Non-violence implies voluntary submission to the penalty for non-co-operationwith evil. I am here, therefore, to invite and submit cheerfully to the highestpenalty that can be inflicted upon me for what in law is a deliberate crime andwhat appears to me to be the highest duty of a citizen. The only course open to

231. Cf supra note 9.232. See supra notes 223-229 and accompanying text.233. Wride, supra note 13, at 1094.234. But cf Letter from Martin Luther King, Jr., from Birmingham Jail, to fellow clergymen

(Apr. 16, 1963), available at http://www.sas.upenn.edu/AfricanStudies/ArticlesGen/Letter_Birmingham.html. King wrote that "an individual who breaksa law that conscience tells him is unjust and who willingly accepts the penalty of imprisonment inorder to arouse the conscience of the community over its injustice, is in reality expressing the veryhighest respect for law." Id Insofar as this suggests that the motive for accepting the punishment is toarouse public sympathy, of course that is one motive; insofar as it claims to be respectful to the law,contrary to my claims, one suspects that Dr. King is using the word "law" to mean something like"higher law" (whether that of God or of the Constitution), and not the law of Jim Crow Alabama.

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you, the judge, is either to resign your post, and thus disassociate yourself fromevil if you feel that the law you are called upon to administer is an evil and thatin reality I am innocent, or to inflict on me the severest penalty if you believethat the system and the law you are assisting to administer are good for thepeople of the country and that my activity is therefore injurious to the publicweal,

235

Gandhi was pursuing higher motives in much the same way that Veratius wasgratifying his perverse impulses-by using the law's own penalty structure to make astatement, thereby rejecting that law in a much more high-handed way than a thiefwho attempts to conceal his crime. Whereas the Schoon defendants quibbled withparticular decisions about whether various activities should be punished, Gandhitreated the legal system itself like a mere obstacle, a cost of his campaign, rather thana system of moral obligations binding upon him.

Ex ante willingness to pay is crucial when making such a statement: whileseeking to evade punishment-whether by stealth, violence, or necessity defensearguments-implicitly accepts the obligatory force of the law, simply breaking thelaw and accepting the punishment, with plans to break it again, instantiates a beliefthat the law has no moral force. When people like Veratius instantiate that belief, wethink of them at best as eccentric and at worst sociopathic. But when people likeGandhi do so, not out of malice or strangeness but to achieve profoundly moral ends,we often question, not their conduct, but the laws that they break.

B. Willingness to Pay, Wealth, and Hubris

1. The Willingness to Pay Standard and Inequality

Cost-benefit analysis is based on the straightforward economic logic that goodsare worth what people are willing to pay for them and that the people who are willingto pay the most for goods are those who should get them. 36 This emphasis onwillingness to pay leads, of course, to favoring the wealthy, as those who have moremoney are willing to spend more of it for a given good.237 This standard naturallyexacerbates differences between rich and poor. The classic example is that, if a richgourmand is willing to pay $5 for a loaf of bread, while a starving beggar can onlygive his last dollar for the bread, then efficiency posits not only that the gourmand getthe bread, but that he values it more.238 This logic holds whether the wealthy actually

235. MAHATMA GANDw, A Plea for the Severest Penalty Upon His Conviction for Sedition,reprinted in THE LAW AS LrrERATURE 100-01 (Louis Blom-Cooper ed., 1961); see also Wride, supranote 13, at 1094.

236. See Ackerman & Heinzerling, supra note 214, at 1556.237. Idat 1574-75.238. POSNER, supra note 23, at 262.

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do pay for the good in question: even if they do not, presumably their gain is greaterthan that of other possible possessors of the good, so they could in theory compensatethe less-well-off out of their surplus. This line of reasoning led Larry Summers, whenhe was chief economist at the World Bank, to conclude that the "economic logicbehind dumping a load of toxic waste in the lowest wage country is impeccable. '2 39

2. Inequality, Wealth, and Hubris

This critique of cost-benefit analysis is relevant to our inquiry. If governmentalcost-benefit analysis tends to devalue the demands of equity and unduly burden thepoor, then such an analysis conducted by private actors tends to be much worse. Aprivate party who weighs the harms and benefits himself, and pronounces himselfwilling to pay for the harm he causes to society, is pronouncing his own norm that therich should get the economic advantages that cost-benefit analysis tends to give them.Thus, part of what is offensive about Veratius is the emphasis on his wealth;240 notonly "I can slap you and get away with it," but "I can do so because I'm rich." Hiswealth is presumably what allowed him to flaunt societal norms. This is whydemands for punitive damages against corporations are often expressed in terms of apercentage of the company's total assets or income, with the goal being to make thecompany "feel" the damage award.24 1 We have a sense that wealth should notprovide a right to flout societal norms.

Similarly, in the Grimshaw context, Ford will probably pay less if its victims arepoorer.242 An actor's ex ante willingness to pay tends to correlate with both his own

239. Ackerman & Heinzerling, supra note 214, at 1574 (quoting Memorandum fromLawrence H. Summers, Chief Economist, World Bank to Distribution (Dec. 12, 1991),http://www.whirledbank.org/ourwords/summers.html).

240. See CROOK, supra note 1, at 250-5 1.241. See Viscusi, supra note 9, at 558.242. See Heinzerling, Statistical People, supra note 214, at 193 ("mhe upshot of the

prevailing method for valuing statistical lives-which asks how much individuals are willing to payto reduce risk in their own lives-also favors the statistical lives of the rich over the statistical lives ofthe poor."). As to statistical lives, Heinzerling's claim is doubtful, since it assumes without muchevidence that economists and regulators produce different valuations for statistical lives for differentactivities, based on the socio-economic classes of people who tend to engage in those activities.Heinzerling cites Viscusi's claim that regulators should place "a higher value of life on the well-beingof the lives of airline passengers than those killed in motor-vehicle crashes because the airlinepassengers have a higher income." Id. at 193 n.13 (quoting W Kip Viscusi, Equivalent Frames ofReference for Judging Risk Regulation Policies, 3 N.YU. ENVTL. L.J. 431, 447 (1994)). However,regulators do not seem to do so. In fact, the NHTSA valuation used in Viscusi's study ofjury attitudeswas viewed as superior to compensatory-damages-based valuations in part because it went "beyondthe value of a person's earnings or the usual amount of a compensatory damage award" to "reflect [ ]the risk-money tradeoff based on the individual's own willingness to pay for greater safety." Viscusi,supra note 9, at 555.

Nonetheless, Heinzerling's claim is correct as to valuations of the lives of real (not statistical)

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wealth and the relative poverty of his victims. A system that values the well-being ofthe rich over that of the poor is likely to cause discontent. While many areas of lawcould be described as valuing the rich over the poor, ex ante willingness to pay puts itparticularly clearly. Willingness to pay is related to ability to pay, and can suggest tojuries that the actor considers himself above the law because of his wealth. Eventhough the actor is in fact willing to submit to the law's penalties, and thus may notview himself as "above the law" at all, his very ability to pay suggests that the law'spenalties do not have the intended punitive effect on him.

Civil disobedience is very different in this regard. Those who engage in civildisobedience are not necessarily wealthy, and the "harm" of their actions is notgenerally inflicted on those poorer than they are. More importantly, they are oftenwilling to suffer non-monetary penalties, which tend to disfavor the wealthy, who

243probably suffer more from jail time than do the poor. This suggests a moraldistinction between civil disobedience and actions like Ford's or Veratius's. At thesame time, it is possible that civil disobedience gains some rhetorical force by itsidentification with a technique that is more often associated with wealth and power.Protestors who are willing to pay the penalty for their "crimes" can express a type ofpower. They can thus identify themselves, not as desperate revolutionaries, but, aspeople who are able to make the type of decisions about imprisonment that, in othercontexts, wealthy actors can make about their willingness to pay financial costs.

C. Pre-Payment, Remorse, and Reconciliation

Obviously, committing a crime or tort while planning in advance to pay thepenalty for that offense negates the possibility of contrition or remorse. A man whoassaults another in a moment of passion may later regret his actions, and real remorsemight accompany the punishment imposed by the law. But a man who slaps anotherand then pays him the set monetary penalty before moving on to his next assaultmakes it very clear that he feels no remorse at all.

Remorse does not play a significant role in either deterrence or retributivisttheories of punishment, though it does have much to do with the practice of tort and

244criminal law. It clearly plays at least some role in our moral view of conduct,specifically that bad conduct without remorse is much worse than bad conductfollowed by remorse. Ex ante willingness to pay, as evidence of a lack of remorse,

people, in that typically wrongful death suits allow recovery of compensatory damages for thefinancial support that the decedent would have provided to his decedents, see, e.g, LAYCOCK, supranote 11, at 153, 155, so richer decedents' lives will be "worth" more than those of poorer decedents.

243. See, e.g., POSNER, supra note 23, at 247 ("mhe greater a person's earning capacity, thegreater his loss if conviction for a crime impairs it.").

244. See, e.g., U.S. SENTENCING GUtDELINES MANUAL § 3El.1 (2000) (reducing criminalpenalties for those who "accept responsibility" for their crimes); Steven Keeva, Does Law MeanNever Having To Say You're Sory, 85 A.B.A.J. 64,64 (1999) (describing the role of apologies in tortlaw).

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may therefore justify additional punishment simply because it indicates that the actoris morally inferior to someone who acts with no plans to pay the penalty, but laterdoes so remorsefully.

245

The broader point is that those who commit offenses with plans to pay thepenalty lack the rich understanding of their offenses, that seems to be intuitive to mostpeople. Their conduct can be analyzed from the point of view of deterrence orretribution, and in many cases will seem perfectly acceptable under those points ofview. The reasons that jurors, judges, and legislators nonetheless object to theirconduct come from notions outside of those theories--notions of remorse, but also ofreconciliation with victims and communities. Mechanical forms of punishment orcompensation can serve deterrence, retribution, and compensation rationales; but theyseem to do less for the other felt needs ofjustice-reconciliation, and remorse.

Ex ante willingness to pay, then, is problematic because it brings into sharp focusthe intuitive difficulties of a system of pre-set, mechanical punishments. While sucha system is entirely necessary to serve the major ends of justice, such as legality,deterrence, and retribution, it cannot fully capture all of our intuitions of what justicerequires. Usually, this is fine. We find the murderer more reprehensible because henever expresses remorse for his actions, but we are nonetheless assuaged by the factthat his punishment is extremely unpleasant, and we do not see too much need tochange the system to further punish him. But in cases of ex ante willingness to pay,the disconnect is clear. The offender freely accepts the penalty and still thinks he gota pretty good deal. His calculation throws into stark relief the failures of pre-setpenalties to address fully all of the concerns that motivate punishment. Therelationship between offense and penalty is not one of simple exchange, of amathematical proportion that provides the correct deterrence or that properly annulsthe guilt of the crime. Actors who are willing to pay the penalty for their offensemay understand and accept the mathematical proportions involved; but theydownplay the other factors-remorse, reconciliation, respect for the moraldeterminations of law-and decide for themselves which factors are and are notworthy of respect. Thus, ex ante willingness to pay the penalty for an offense cansometimes be a justifiable reason for increased punishment or blame, as a vindicationof legal norms that go beyond deterrence and retribution but are nonetheless a crucialpart of our sense of guilt and punishment.

245. Of course, this must be counter-balanced against other indications of moral goodness orbadness; the actor who is willing to pay the penalty, though perhaps not exactly remorseful, isprobably "accepting responsibility," while the actor who does not plan to pay the penalty will likelycommit his crime sneakily to avoid detection.

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