Money as Punishment: Neoliberal Budgetary Politics and the Fine

ABSTRACT

In August of 2014, a young Indigenous woman, known as Ms. Dhu, died in the lock-up of the South Hedland Police Station after being detained for unpaid fines totalling $3622. Her death drew attention to the fact that fine defaulters – most of whom are Indigenous and female – are once again being imprisoned at astonishing rates in Western Australia, after the practice was more or less discontinued elsewhere. What does the nexus between the fine, incarceration and forced labour tell us about the relationship between money and penality in contemporary neoliberal/neoconservative states? Pointing to the combined influence of the Chicago and Virginia schools of neoliberalism on Australian public policy, I suggest that the recent expansion of monetary sanctions must be understood as a way of transferring the debt burdens of the state downwards, onto those classified as excessive ‘users’ of public services. Not only does the fine blur the boundaries between civil and criminal law, it also harnesses punishment to the fiscal imperatives of an increasingly austere, deficit-averse state.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Melinda Cooper is Associate Professor in the Department of Sociology and Social Policy at the University of Sydney. Her most recent monograph is Family Values: Between Neoliberalism and the New Social Conservatism (Zone Books 2017). She is coeditor, with Martijn Konings, of the Stanford University Press book series, Currencies: New Thinking for Financial Times.

Notes

1. Elsewhere, I have argued that the post-Keynesian state needs to be understood in terms of the alliance between neoliberal and new social conservative practices of government. See Cooper (2017). This article is an attempt to extend this argument with respect to the specific question of crime and punishment.

2. Becker will be my focus in this article. However, his work belongs to a much wider conversation among Chicago school ‘law and economics’ scholars concerning the most efficient management of crime and punishment. See Stigler (1970) and Posner (1985). For an alternative reading of this tradition, focusing on the work of Richard Posner, see Harcourt (2011).

3. ‘The solution must lie in public authority. Low-wage work apparently must be mandated, just as a draft has sometimes been necessary to staff the military’ (Mead 1986, 84).

4. The point is made by O’Malley, who observes that in such cases fines are ‘scarcely different to a consumption tax’ (2009a, 96). Jeremy Bentham was already attentive to the proximity between the fine and taxation, which makes it all the more interesting that Becker should leave this out of his analysis. In Bentham’s words, ‘When the face assumed by any law is that of a prohibition, if the penalty be nothing but pecuniary and the amount is fixed, while the profits of the offence are variable, the probability is, that in many instances the penalty, even if levied, which could not be without detection, prosecution, and conviction, would but operate as a taxed licence’ (1843, 394).

5. There is of course a long critical literature attending to the recurrent efforts by liberal economists to collapse the formal equality of the money form with equality of power. This literature begins with Marx 1977) and is enriched by Simmel 2004, 441–443).

6. Writing in the very different environment of the mid-1980s, Richard Posner felt compelled to acknowledge (and endorse) the stark class division implied by Becker’s theory of punishment. The ‘criminal law is designed primarily for the non-affluent’, he writes, while ‘the affluent are kept in line for the most part by tort law. This may seem to be a kind of left-wing suggestion (“criminal law keeps the lid on the lower classes”), but it is not. It is efficient to use different sanctions depending on an offender’s wealth’ (Posner 1985, 1204–1205).

7. A close reading of Wacquant (2009) confirms that his references to so-called ‘neoliberals’ are in fact references to social conservatives such as the new paternalist Lawrence Mead, who would be surprised to find himself ranged alongside Milton Friedman and Gary Becker.

8. This is the crux of O’Malley’s response to Beckett and Harris (2011) in his article ‘Politicizing the Case for Fines’ (2011).

9. Australia represents a good point of comparison with the US in this regard, as it has precisely followed Becker’s preferred option of generalising the administrative fine and severing the direct pathway from the fine to the court hearing. Yet even here, the fine to prison track is overdetermined for certain sectors of the population.

10. The exact figure is 54.1% for driving, motor vehicle, traffic and related offenses. A further 22.1% have been fined for offenses against good order; 9.7% for offenses against the person; 7.1% for break and enter and theft; 3.2% for drug offenses; 2.1% for property damage and environmental offenses; and 1.6% for other offenses. These figures only capture the most serious fine accumulated at time of imprisonment (Office of the Inspector of Custodial Services 2016, 16).

11. In this respect, Becker is harsher than his mentor, Jeremy Bentham, who was very much in favour of the day fine. See Bentham (1931, 353). Countries that use some form of income-contingent fine are Finland, Denmark, Sweden, Switzerland, Croatia, Germany and Macao. The practice is based on an analogy between prison time and labour, and responds to the argument that if rich and poor are expected to do the same ‘time’ in prison they should also be expected to pay the same price relative to their incomes. See Hamilton (2004) for a proposal on how to introduce them in Australia.

12. The rationale of the ‘user fee’, as defined by James M. Buchanan, is to reintroduce private contractual relations between the individual and the state. Via the user fee, the individual is empowered to ‘choose’ which state-provided services he will use and thus what amount of tax he will pay. Within this market-based imaginary, it makes sense for the price of government goods to be defined by the service provided rather than the income of the user, as in a progressive taxation system (Buchanan 1991, 155–157).

13. For example, the New South Wales State government projects that 5% of its overall revenue will come from ‘fines, fees and regulatory charges, and interest income’ in 2016–2017 (The Treasury 2016). Other states report similar percentages.

14. In 2013–14, gambling taxes provided 8% of state tax revenues (exclusive of GST) while motor vehicle taxes (including stamp duty on vehicle registration) represented 14% of state tax revenues (The Treasurer 2015). The GST, which is collected by the Commonwealth but redistributed to the states, on aggregate makes up a quarter of state government revenue.

15. For an overview of these figures in the 1970s, see Commonwealth Grants Commission (2001, 48). And for comparative data on the period 2015–2016, see ABS (2017).

16. Although my focus in this article is on the political and social impact of the fine, these figures present several difficulties of interpretation. For example, the Australian Bureau of Statistics uses the category ‘other revenue’ to refer to ‘all revenues not classified as taxes, social contributions, or grants. The major items are property income, sales of goods and services, fines, penalties and forfeits, voluntary transfers other than grants, and miscellaneous and unidentified revenue’ (ABS 2005, 14). There is no indication as to what proportion of ‘other revenues’ is constituted by fines. There is also some blurring between the budgetary categories of ‘user fees and charges’ and ‘fines’, since parking charges are routinely catalogued as ‘user fees’ but are imposed as a fine on the user who has not paid them. Moreover, it appears that local governments themselves use very different categories to account for fine revenue in their annual reports: for example, it was found that beachside council areas in Sydney that derive a significant, and some would argue exorbitant, portion of their revenues from parking fines, classify these under the generic heading of ‘parking services’ (Sheehan 2012). Be that as it may, it is clear from the long-term trends in local government revenues that councils today make much greater use of fines than they did in the 1970s – a trend that dovetails with the proliferating forms and functions of the administrative fine within the criminal justice system.

17. I am unable to engage with the vast recent literature on household debt, which has obvious affinities with my argument. See, for example, Susanne Soederberg’s (2014) analysis of household debt as a form of ‘debtfare’ replacing income based welfare. Here, I am attempting to extend the focus beyond the forms of indebtedness experienced by the waged and mediated by formal credit markets – beyond even the payday loan market for the unbanked and unwaged – to examine how the income-poor can incur debts to the state without ever taking out a formal loan.

18. Both of these recommendations were made by the Kimberley Community Legal Services (2017, 21, 26) in its recent report to the Australian Law Reform Commission.

19. This is another of the recommendations made by the Kimberley Community Legal Services (2017, 22–23).