> Can the punishment also be scaled to the harm, or potential harm, caused by the fraud? In a case like this, that would be nothing.
The harm is indeed relevant! "Crimes" without a victim, or where the victim and the perpetrator are the same person, should not be crimes.
But in this case, the harm is decidedly not nothing:
(1) How many consumers chose "Cakes of Deceit" over their competition, "A Taste of Honesty", on account of those premium ingredients? This pushes other businesses to engage in dishonest behavior in order to level the playing field.
(2) How many customers paid more for the "premium" offering because of its ingredients? What would they have paid had they known the truth? The difference between these two is the amount of money stolen from the customers.
(3) What is the economic impact to the sellers of the premium ingredients? Presumably, customers eating at "Cakes of Deceit" will come out with the opinion that "Kashmir Saffron" and "True Cinnamon" aren't any different than the cheap stuff.
This is far from a case of "no harm, no foul"
Also, you scale punishment to fit the difficulty of detection -- and I would argue, the guilty's ability to pay -- as it keeps the risk-reward equation balanced.
Imagine a shoplifter, Alice. She is caught stealing a $10 pack of cigarettes from the corner liquor store.
Alice offers to pay for the cigarettes once she is caught.
Sounds fair, right?
Suppose that we know that there is a one in ten chance of catching a shoplifter. That means for every ten times Alice tries to shoplift those $10 packs of cigarettes, she'll escape punishment nine times, and get caught once.
The corner store would be out $90 in goods in this case. Alice would be out the $10 for a single legitimate purchase. So we adjust the punishment upwards to make the process of shoplifting unpalatable to Alice in any case.
Now, what if Alice is wealthy, and just stealing for the thrill of it?
Well, a $200 fine probably won't mean much to her. So we scale the punishment until it does.
The Swiss do this, and I highly support it. If we are going to make something illegal -- which we do far too much, I must admit -- being wealthy shouldn't be equivalent to a Get Out Of Jail Free card.