After comparing the retributive and deterrence justifications for punishment, the chapter demonstrates the irrelevance of rehabilitation and incapacitation goals to the crime rate. A review of the historical roots of deterrence theory then focuses on its foundation in utilitarianism, primarily that propounded by Bentham. A critique of Benthamian views suggests flaws in the utilitarian postulate that happiness is humankind's primary goal and that people rationally control their behavior according to what will make them happy. The chapter then develops a deterrence theory, independent of the tenets of utilitarianism, which focuses on actions based on subjective perceptions. The discussion notes that deterrence does not depend upon a general pattern of cost-benefit calculation in human behavior, but rather upon the observation that most people repond to incentives and disincentives 'as though' calculating. Also considered are the role of the probability of punishment in deterrence, the time span between crime and punishment, perception of punishment threats, the role of deterrence in the formation of criminal and law-bidding habits, and moral issues in implementing deterrence theory. Twenty-three notes and four references are provided.