A CRITIQUE OF THE DOMINANT ECONOMIC THEORY OF CRIME AND PUNISHMENT BEGINS THE DISCUSSION, ASSERTING THAT ECONOMIC THEORY CONTAINS A VALUE COMPONENT THAT FUNCTIONS TO LEGITIMIZES EXISTING POWER AND CLASS PRIVILEGE. A NECESSARY CONDITION FOR ANY THEORY OF CRIME AND PUNISHMENT IS A CONCEPT OF THE STATE THAT ACCOUNTS FOR THE IMMEDIATE REASONS CERTAIN ACTIVITIES ARE LABELED CRIMINAL. FURTHERMORE, NEITHER CRIME NOR PUNISHMENT CAN BE EXPLAINED THROUGH THE ABSTRACTION OF INDIVIDUAL CHOICE. RATHER, THE NECESSITY FOR DEFINING CERTAIN ACTS AS CRIMINAL STEMS FROM THE DOMINANT MODE OF PRODUCTION, ITS CONDITIONS OF PRODUCTION, AND EXPANDED REPRODUCTION. A POLITICAL EXPLANATION OF CRIME AND PUNISHMENT IS MORE APPROPRIATE THAN AN ECONOMIC ONE. THE DEVELOPMENT OF THE CAPITALIST SYSTEM AND ITS CENTRAL FEATURE, THE COMMODITY FORM, PENETRATES INTO ALL SPHERES OF SOCIETY AND THIS LAW MEDIATES THE CRITICAL IDEOLOGICAL FUNCTION BETWEEN CONSCIOUSNESS AND THE ACTUAL CHARACTER OF SOCIAL RELATIONS CONTAINING BOTH A SYSTEM OF BELIEFS AND RULES OF CONDUCT. AN HISTORICAL ANALYSIS OF THE DEVELOPMENT OF AMERICAN CAPITALISM, CRIMINAL LAW, THE EMERGENCE OF VARIOUS LAYERS OF SOCIAL CONTROL AGENCIES, AND THE DEVELOPMENT OF THE PRISON SYSTEM IS PRESENTED TO ILLUSTRATE THE THEORY, AND TRADITIONAL STATISTICAL TOOLS ARE USED TO ANALYZE SOME CONTEMPORARY FEATURES OF THE CRIMINAL JUSTICE SYSTEM. THE STUDY CONFIRMS THE HYPOTHESIS THAT CRIME IS ONE RESPONSE TO INADEQUATE INCOME AND SUCH INADEQUACY IS A RESULT OF THE SOCIAL ORGANIZATION OF PRODUCTION. IT PARTIALLY SUBSTANTIATES THE IDEA THAT CRIME FIGHTING IS A SUBSIDIARY FUNCTION OF THE POLICE WHOSE PRIMARY FUNCTION IS TO CONTROL MARGINAL SEGMENTS OF THE POPULATION. STUDY DATA AND A BIBLIOGRAPHY ARE PROVIDED. (AUTHOR ABSTRACT MODIFIED--DAG)