Have you ever been at the shops and watched parents fail to control their kids?

"Get off that now and come." Kid doesn't move.
"Get off it now or you'll be in trouble." Kid doesn't move.
"You'll be in trouble if you don't come now." Kid doesn't move.
"I'll leave you here if you don't come now." Kid doesn't move.
"I mean it. You'll be left behind."

You get the idea.

Many of us parents are guilty of this.

We make threats we don't or can't carry out and essentially teach our kids not to believe what we say. We eventually snap and punish the child when we're finally fed up, but really we know it's our own fault for teaching our kids to ignore our instructions.

Yet when it comes to our state's judicial system, we make the exact same mistake. We catch people for committing a crime, give no punishment; catch them again, give no punishment; catch them again, give them a suspended sentence; catch them again, give them a really really strong warning that this is the last time; catch them again, tell them they have exhausted all their chances and they're now off to jail.

But it's too late to think jail will do much. They have become rather good at stealing and perhaps even dependent on the income it provides. And they genuinely don't know if they'll be in trouble or not each time they're caught.

Flashback:

I was about 4 or 5 when I stole a packet of gum from the checkout at Coles.

Mum found out.

She didn't treat me as though I had stolen a packet of gum. She treated me like I'd stolen a car. I was in SOOOO much trouble.

Part of my punishment was the shame of returning to the store and apologising to the staff. I was deeply embarrassed, and had stirred the wrath of my mother like I'd never seen before.

Guess what; I didn't steal any more.

At the time I obviously didn't want to be punished. It was painful and it could have been argued no real harm was done in taking a small packet of gum. But my mum was wise enough to know that if she didn't stamp that behaviour out right at the start, I might try stealing other things.

Now I am grown, I'm extraordinarily grateful that I was punished as a young child and put on a better path.

Flashback: Criminal neighbours

At 16 I realised I had reached the pinnacle of all wisdom and left home to live with a friend.

This "friend" unfortunately enjoyed chronic amounts of marijuana.

We also happened to reside a few doors down from some folk who enjoyed drugs and living differently.

Due to the presence of weed at our place, these delightful neighbours decided to befriend us. There wasn't really much choice on our part as to the depth of the relationship.

I got to know these individuals and tried and find out what made them tick. Here's a few interesting things that etched themselves into my memory.

They used to get dressed up and "go to work"

That's what they called it. They would actually decide "today we're going to go and do a bunch of break and enters." They called them B and E's because that sounded cool. They would put on the nicest clothes they had, do their hair, and venture out into the suburbs to see what loot they could find. And they called it going to work.

They didn't have a job, and they didn't want a job

Each morning I would get up, get dressed and walk to my job at a pet shop where I would clean up animal feces, serve impatient customers, and be on my feet for around 9 hours before walking home, all for about $400 a week.

I distinctly remember my conversation with one of these neighbours who was laughing at my decision to go to work each day.

Me: "Don't you want a job?"

Him: "Why would I want a job? I get money for free!" he said half laughing. "And if I need any more we can do some B & E's."

Me: "Don't you have to look for work in order to get the dole?"

Him: "All you have to do is get the yellow pages and pick some business names and write down their phone numbers."

They knew what to do if they got caught

These guys didn't just rob the odd house on occasion. They had all robbed HUNDREDS AND HUNDREDS of homes. Another of the neighbours shared some tips with me about how to avoid jail.

"Just don't say anything. Deny it. It doesn't matter if the cops catch you, just deny it. They have to prove it and they usually can't. I've got mates who have gone to jail but it's because they talked to the cops."

I was shocked, still am to be honest, that these people were so calculated in their decision to avoid legitimate employment, collect taxpayer funded welfare, and commit as many burglaries as they felt like.

But it eventually dawned on me. They're not stupid.

The economics of crime

Economist David D. Friedman has an interesting essay published on the Library of Economics and Liberty.

He asserts that "A mugger is a mugger for the same reason I am an economist—because it is the most attractive alternative available to him. The decision to commit a crime, like any other economic decision, can be analyzed as a choice among alternative combinations of costs and benefits."

In other words, people commit a crime after weighing up the risk vs reward, or the cost vs the benefit.

They may not open a spreadsheet and run a calculation.

But, when deciding whether to rob a house or not, the criminal is generally aware of two factors:

A: Roughly how likely it is they will be caught.

B: Roughly what the punishment might be if they are in fact caught.

Megan McArdle who writes at BloombergView is the author of the book "The Up Side of Down: Why Failing Well is the Key to Success".

Earlier in the year she was interviewed by well known economist and communicator Russ Roberts, research fellow at Stanford University's Hoover Institution.

Here's a fascinating extract from their conversation:

Roberts: Part of what we are talking about here is responsibility, second chances, moral hazard. All these things tie in to these decisions that we make at the policy level. And it's interesting to me that you profile a parole system that is relentlessly unforgiving, remarkably successful, and actually reduces the problem in an interesting way. So, talk about that briefly. We're low on time, but it's such a great story.

McArdle: It is a great story. So, it's a judge in Hawaii who looked at the normal parole system. Basically, you've got sort of a suspended prison sentence. And you have to show up for your probation appointments, take regular drug tests, and so forth.

And what happens in a lot of cases is that people violated their parole a bunch of times. And then eventually after 10 or 20 times the probation officer gets fed up and says, Okay, that's it; you are going to prison; you are not complying and we are going to send you.

The judge looked at this, Judge Alm. He said, this is crazy. He said, what we should do is what you do with your kids: every time you violate, we punish you. Instead of nothing, nothing, nothing, nothing, Bam!--5 years in prison.

And so that's what he did: he said, every single time you violate, you are going to jail. But only for a few days. And it has cut the rate of people who end up with prison terms in half.

They save the taxpayer money. And the probationers love it. It's one of the rare kind of win-win.

And I think this actually goes to why bankruptcy is great, and why this works better than traditional probation. Which is, you think about punishment--failure should not, as I say--it should hurt. Which is how you say, Don't do that. But you want it to hurt in a very specific way. And how do you think about that?

First thing, the pain should not be crippling. Right? Second, it should always happen. It should follow from things that don't work. Or in the case of probation often are things that are morally wrong. It happens every time. And then the third thing is that it should enable you to move on. Right?

And that is actually what this is focused on, is keeping you out of jail, keeping you connected to the labor market, to your family, not prisoners where you can learn more about being a criminal.

And it's phenomenally successful at focusing people on the future instead of focusing on their past. Because they are still in the community and they are still learning to be functioning members of the community. So, it's a phenomenally powerful. Because it does hurt. And it hurts immediately.

Over the past 50 years we've been struggling with this crime problem. The answer, though, has been harsher. Three-strikes and you are out laws. Harsher prison sentences. And what Judge Alm said--and what Mark Kleiman, from him I learned about this and who has written a great book on this called When Brute Force Fails--is that this is exactly the wrong way to think about it. (Click here for link to book.)

The thing is not to make the punishment more terrible. It's to make it more consistent.

And it's just remarkably effective.

And I wanted to put this in the book, because I end by talking about forgiveness and how important forgiveness is, and how much cheaper it is than we usually think. We usually spend too much time worrying about abuse and too little time worrying about the people whose lives are affected when we punish them. But that in this case, you do need to punish people.

But then how do you do it so that you maximize the chances of rehabilitation and minimize the damage to both society and the person? And this is why it's such a great story. Because you don't report on a lot of policy stories where there genuinely seem to be very few tradeoffs. But this is one of them.

Click here for full interview.

I found the above conversation fascinating as it asserts that the knee jerk reaction to a crime problem doesn't need to simply be "tougher sentences".

That may be the way to win votes as it appeals to anyone who is a victim of crime, and seems to make sense. But someone has to pay for the prison guards. The taxpayer ends up getting robbed twice, once when his home gets broken into, and again when he has to pay the costs of incarcerating the criminal.

But there are real world examples of policy makers and enforcers replacing randomised severity with swiftness and certainty of punishment by clearly specifying the rules and then delivering the promised sanctions every time the rules are broken.

And it's working.

NewsHour Weekend profiles an innovative probation program in Hawaii that has been so successful in reforming offenders and keeping them out of prison, it's now being copied in courtrooms across the nation.