Deterrence is understood by economists as a response to alternative incentives (i.e., to obey or violate the law) which becomes effective if potential criminals realize that breaking the law will bring punishment rather than benefits. Retribution, on the other hand, is grounded not in individual utility or self-interest but in morality and the distinction between right and wrong. The article examines the philosophical, ethical, and legal complexities of deterrence and retribution, and concludes that moral commitment has a greater effect in determining law-abiding behavior than fear of punishment, because most people see crime as wrong, not simply disadvantageous. This suggests the possibility of an increase in crime rates if righteous indignation, and the sense of right and wrong on which it is based, were to disappear from society's understanding of law. Modern penologists are mistaken in overlooking retribution because it is a crucial factor in social control over crime. A legal system which allows no room for retribution will lack the resolve to punish criminals. No law enforcement system and no rule of law can exist without an understanding of law as the authoritative statement of public morality. Endnotes and 12 references are appended. For related articles, see NCJ 74975.