SOME RESEARCHERS HAVE FOCUSED ON THE RELATIONSHIP BETWEEN CERTAINTY AND SEVERITY OF PUNISHMENT AND SUBSEQUENT RATES OF CRIME. FINDING AN INVERSE RELATIONSHIP, THESE RESEARCHERS CONCLUDE THAT PENAL SANCTIONS DETER CRIME. THERE ARE TWO REASONS TO QUESTION THIS INTERPRETATION: (1) BY CONCENTRATING EXCLUSIVELY ON PENAL SANCTIONS AS DETERMINANTS OF CRIME, THE RESEARCHERS HAVE NEGLECTED OTHER FACTORS (UNEMPLOYMENT, SOCIAL CLASS, ETC.) KNOWN TO BE ASSOCIATED WITH THE CRIME RATE; AND (2) NO ATTENTION HAS BEEN GIVEN TO THE POSSIBLE EFFECTS THAT CRIME RATES MAY HAVE ON THE SANCTIONING ACTIVITIES OF PENAL AND JUDICIAL SYSTEMS. THE SAME DATA USED IN PAST DETERRENCE STUDIES ARE ANALYZED TO DEMONSTRATE THAT CRIME MAY AFFECT CERTAINTY OF PUNISHMENT MORE STRONGLY THAN CERTAINTY OF PUNISHMENT AFFECTS THE RATE OF CRIME. THIS 'SYSTEM CAPACITY' PERSPECTIVE BRINGS INTO QUESTION THE ABILITY OF LEGAL THREATS, AS ADMINISTERED IN THE UNITED STATE, TO DETER CRIME. SUPPORTING DATA, DETAILS OF ANALYSIS, AND A LIST OF REFERENCES ARE INCLUDED. FOR RESPONSES TO THIS ARTICLE, SEE NCJ 47885-47887. (AUTHOR ABSTRACT MODIFIED--LKM)