On Traffic Fines

And why they should be flat, not proportionate

Speeding is bad because it harms others, more than it benefits the person doing it. It is just like any other externality, like pollution, or obnoxious noise. In order to prevent people from harming others by speeding, we fine it, roughly in accordance with the amount of danger it causes others; someone who is going extremely fast faces harsher penalties than someone who was merely going 15 over the speed limit. 

Speeding is not bad for its own sake, however. The benefit to the individual could exceed the total cost to bystanders. If the speeder could compensate all parties, then everyone would be made better off.¹ This is what is called Kaldor-Hicks efficient. It is only the difficulty of negotiating with everyone that we are unable to do this. Accordingly, we impose penalties which should be proportionate to the harm which it causes others. There are some people who derive especial value from speeding; someone rushing to a hospital to deliver a child, for example, or who would miss a flight. We would not wish for there to be excessively punitive fines, because we would lose all instances of speeding, even the most justified. This is the same reasoning behind a carbon tax. We derive a great benefit from using fossil fuels, but at the same time, it also harms us. When we reduce fossil fuel usage, it is important that we cut first the least essential sources of emissions, and not the most the sources which bring us the most benefit. 

The harm which someone causes by speeding does not vary with income. A rich person driving at a frightful speed is no more or less harmful than a poor person driving in the same manner; it does not make sense to penalize the former more than the latter. Yes, the rich person will have an easier time paying the fine; they will be less deterred, but the point is not deterrence. If we believe that we should always deter people from speeding, then you are saying the optimal amount of speeding is 0 – even in the cases where it would be Kaldor-Hicks efficient! This is why tying traffic fines to income, as Finland does, is bad; we are confused about how much speeding we want!

You could argue that, while they may pay a sufficiently large fine to encompass all the harm they cause others, the money is not redistributed to the drivers or pedestrians, and is thus not equitable. However, is this really so? Traffic fines flow (in most parts of the country) to the police department, which can use them to expand operations. While it would be considerably better if traffic fines were directly redistributed to all people, those who are poor benefit most from publicly provided police services, as they would be least able to afford private services in a world of no police. Besides that, it is good for us to buy and sell things based on money. Money can only be earned by providing things which other people want, or by force – and granting that most people do not work for the government (or if they do, they earn it doing at least somewhat useful things), we should allocate resources in a way that encourages good behavior. 

In a world of cameras, we should make speeding like a toll; an unavoidable payment for endangering other, fixed precisely to the harms done divided by the probability of being caught. Let us do redistribution in other things.

1. I’ve heard it suggested that there is no compensation which is possible for endangering others. This is not so — if you and another were driving along a road together, there is surely some value of money which would be sufficient for you to let them speed. The value that we derive from having people not speed is simply what each of us would accept, summed up. The claim also proves too much; if it is truly not acceptable to trade risk against other things, not only would it not be acceptable to drive, it wouldn’t even be acceptable to run.