I have heard many an argument that "punishment does not work".
Consider the activities of quite a few British MPs at present, diddling and fiddling their expenses. Although many have not undertaken outright fraud, the smell of something rotten hangs over the heads of all who have pushed the edge of the envelope in regards to claiming from the taxpayer.
What is the result?
Cabinet ministers have resigned under pressure, giving up oodles of perks and a big chunk of salary. A swag of MPs have said that they will not stand at the next election after being pressured by their local constituents. They are losing not only a source of income, but the chance to be part of a powerful elite. Others have paid tens of thousands of pounds in capital gains taxes that they may not be legally obliged to pay, but they have paid in order to atone for their sins.
That sounds like punishment to me.
Serious punishment. They're not being sent to prison (well, it might be too early to say that in some cases), but the mighty have fallen enormously. Power, prestige and pay have all been anihalated.
The effect on British politics has been electric. The punishment of the most odious sinners has provided a salutory lesson to the rest - I dare say that we won't see anyone trying to fiddle their expenses for a decade or so, until the lesson needs to be learned again.
In other words, the punishment of some will improve the behaviour of most of the remainder, as well as improving the behaviour of some of those being punished.
Sounds like punishment works just fine to me.