If someone has violated the Clean Water Act by putting pollutants in our rivers, how should they be punished?
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The answer to this question has both an economic and a moral element to it. The economic aspect is much easier to answer than the moral aspect.
Economically, this person has caused damages to many others. For example, the pollution that they caused might have closed an area of the river for a while, thus denying income to people who make money from tourist activities on that river. As another example, there might have been a need to spend money cleaning up the pollution. Clearly, part of the punishment should be a fine that will make whole all those who had been damaged by the pollution. This would take care of what economists call the negative externalities of the action.
However, our sense of justice (as well as our desire to deter future wrongdoing) leads us to feel that there should be more of a punishment than that. Even after restitution has been made, there should be some further punishment to show that people cannot break the laws with relative impunity. The appropriate degree of this further punishment is harder to know. I would say that it should consist of further fines and/or jail time, depending on the severity of the pollution and the degree to which there were any extenuating or exacerbating circumstances.
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