Taken from Theory and History by Ludwig von Mises
Part Two: Determinism and Materialism
Chapter 5: Determinism and its Critics
Section 5: Determinism and Penology
Mises explains why state punishment cannot be retributive and is only motivated by deterrence.

5. Determinism and Penology
A factor that often entered the controversies concerning determinism was misapprehension as to its practical consequences.
All nonutilitarian systems of ethics look upon the moral law as something outside the nexus of means and ends. The moral code has no reference to human well-being and happiness, to expediency, and to the mundane striving after ends. It is heteronomous, i.e., enjoined upon man by an agency that does not depend on human ideas and does not bother about human concerns. Some believe that this agency is God, others that it is the wisdom of the forefathers, some that it is a mystical inner voice alive in every decent man’s conscience. He who violates the precepts of this code commits a sin, and his guilt makes him liable to punishment. Punishment does not serve human ends. In punishing offenders, the secular or theocratic authorities acquit themselves of a duty entrusted to them by the moral code and its author. They are bound to punish sin and guilt whatever the consequences of their action may be.
Now these metaphysical notions of guilt, sin, and retribution are incompatible with the doctrine of determinism. If all human actions are the inevitable effect of their causes, if the individual cannot help acting in the way antecedent conditions make him act, there can no longer be any question of guilt. What a haughty presumption to punish a man who simply did what the eternal laws of the universe had determined!
The philosophers and lawyers who attacked determinism on these grounds failed to see that the doctrine of an almighty and omniscient God led to the same conclusions that moved them to reject philosophical determinism. If God is almighty, nothing can happen that he does not want to happen. If he is omniscient, he knows in advance all things that will happen. In either case, man cannot be considered answerable.[1] The young Benjamin Franklin argued “from the supposed attributes of God” in this manner: “That in erecting and governing the world, as he was infinitely wise, he knew what would be best; infinitely good, he must be disposed; and infinitely powerful, he must be able to execute it. Consequently all is right.”[2] In fact, all attempts
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[1]. See Fritz Mauthner, Worterbuch der Philosophie (2d ed. Leipzig, 1923), 1, 462-7.
[2]. Benjamin Franklin, Autobiography (New York, A. L. Burt, n.d.), pp. 73-4. Franklin very soon gave up this reasoning. He declared: “The great uncertainty I found in metaphysical reasonings disgusted me, and I quitted that kind of reading and study for others more satisfactory.” In the posthumous papers of Franz Brentano a rather unconvincing refutation of Franklin’s flash of thought was found. It was published by Oskar Kraus in his edition of Brentano’s Vom Ursprung sittlicher Erkenninis (Leipzig, 1921), pp. 91-5.