The concept of restitution used in this discussion incorporates two methods of making good a victim's loss: the property can be returned undamaged or the victim can extract some other benefit from the perpetrator to compensate for the loss. When individuals commit crimes, they cause primary harm to the victims and their families and secondary harm to community members by forcing them to sacrifice activities and expend resources to defend themselves against future crime. Community members also experience anxiety from fear of crime. Moreover, each criminal adds to the seriousness of secondary crime. In accordance with the restitution theory, members of the community in which the crime occurred may exact restitution from the criminal for secondary harm, either by punishment -- if it constitutes the most efficient means of protection against future violations -- or by requiring another form of payment. The criminal must pay the process costs of these two transactions. The restitutive analysis of punishment is utilitarian because it contains a forward-looking component that tries to restore the community's security. It also has retributive aspects because it looks backward to see who was responsible for creating the need for protection, cannot be logically extended to justify punishing the innocent, and shows that the criminal is not being used merely to secure social benefits. Furthermore, it is justifiable to punish individuals only if they are guilty of moral wrongdoings by violating a requirement of justice. In cases where it is not justifiable to punish the guilty because no immediate benefits would accrue, it is always justifiable to require some restitution for secondary harm. A concluding discussion of the theory's implications for current criminal justice matters explores criteria for criminal violations and deciding the severity of punishment. The paper includes 14 footnotes.