Economist Writing Every Day

Forgiveness is Important

Whether one might socially offend us or whether one commits a crime, we face a fundamental tension between punishment and forgiveness. Punishment is important because it acts as a deterrent to the initial offense or to subsequent offenses. But punishment is also costly. Severing social or commercial ties reduces the number of possible mutually beneficial transactions. We lose economies of scale and lose gains from trade when we exclude someone from the market. Forgiveness is important because it permits those who previously had conflict to acknowledge the sunk cost of the offense and proceed with future opportunities for trade. However, an excess of forgiveness risks failure to deter destructive behaviors.

In the US, we enjoy a state that can prosecute alleged offenders and enforce punishments regardless of the economic status of the offended. While not perfect, the state incurs great cost by being the advocate of those who could not enforce great retributive punishment by their own means. A victim may choose to press charges against an offender, or the state can press charges despite a permissive victim.

In fact, our system of prosecution is somewhat asymmetrical. The state can press charges against a suspect, regardless of the victim’s wishes. While a victim can’t compel an unwilling state to press charges, say if the evidence is scant, an individual can engage in litigation against the accused.

Most of the possible combinations of victim and state strategies result in some kind of prosecution of the alleged offender. Except for litigation, our punishments in the US tend not to be remunerative – the victim isn’t compensated for the evils of the offender. ‘Justice’ is often construed as a type of compensation, however.

Herein lies a problem.

If justice is often the best compensation that a victim can expect, then they will advise the court to assign a harsher penalty at sentencing. Besides, some crimes are quite heinous and the victim may consider all amounts of punishment to be inadequate. But, when a person is sentenced to prison, it is not just the victim who loses the ability to trade with the offender. All persons outside of prison lose access to the offender’s labor, ideas, and potential gains from trade. In this sense, considering the victim’s sense of justice as the appropriate evaluation produces a commons problem. The more that victims demand punitive punishment as their compensation, the more that everyone else loses access to trading partners. Victims over-fish in the sea of human access. By seeking justice in the form of socially and economically isolating an offender, they leave fewer potentially productive members of society with whom others may interact.

All sense of moral propriety aside, this commons problem drives part of my exasperation over the treatment of felons in many of the United States. Felons serve time, fulfill a sentence, and then are prohibited explicitly or implicitly from engaging in mutually beneficial trades. Whether via legal exclusion from certain activities or via stigma amongst employers and customers, felons persist in a state of exclusion. Not only do they lose the ability to enjoy gains from trade, society also loses the opportunity to enjoy their labor and potential for mutually beneficial arrangements.

Understandably, many victims cannot be adequately compensated even if direct remuneration were permitted. Sometimes, there is nothing that a convicted criminal can do to make the victim whole again. But, no amount of punitive exclusion of the criminal will change that. In this regard, forgiveness is a public good that is under-provided by some victims and the state. Recommending harsh punishments to a judge at a sentencing imposes the costs of the criminal’s economic exclusion on everyone else.

I hesitate to attribute too much to culture, but prescribing systemic forgiveness may be one of the great contributions of Christianity. If people find holiness in forgiveness, then it helps them to internalize part of the benefits of what would otherwise be a more underprovided public good. Below is a graph of a victim’s value of forgiveness, D1. D3 describes the value that would be optimal for society. D3 > D1 because the victim does not consider all of the costs that they impose on others through excluding the offender from the mutually beneficial gains of commercial activity. D2 represents the value that the victim places on forgiveness when it includes an attribute of ‘holiness’ or a secular equivalent of warm-and-fuzzies (maybe through signaling self-command or charity). The magnitude of this holy incentive is the height of the dotted line. While the dotted line may not be adequate to reach the socially optimal level of forgiveness, F3, it does get closer than the F1 which results from D1.

In a decreasingly Christian society with increasingly diverse ethics, moral self-restraint becomes less dependable. Changing material incentives is an alternative route to encouraging more behaviors that approximate the effects of forgiveness. Allowing victims the option of remunerative payment from the offender in lieu of enforcing economic exclusion may be a way to get to there. Pecuniary compensation of victims doesn’t come with the same warm-and-fuzzies as does forgiveness. But it may still make us better off, all the same.