From torture and execution, Foucault moves to considering calls for reform. In his view, the reform movement was humanitarian in the sense that man (and the pain he felt) became a standard against which punishments were assessed. The body changed from being the place where punishment acted, to a reason why it should act differently. The reformers first attempted to separate torture and cruelty from punishment; of course, for Foucault the link between torture and investigation means that, strictly speaking, torture was never part of punishment. In general, Foucault is unimpressed by interpretations of penal reform that see it as motivated by a love of one's fellow men. He takes a more calculating attitude to humanitarian reform.

This calculation extends to the processes that surrounded reform. Reform was possible within a structure in which crime itself was changed and reduced. As with his explanation of execution, Foucault looks at deep economic and social structures. The shift in the forces of production (referred to by other writers as the Industrial Revolution) led to an increase in productivity and a greater emphasis on property. In turn, this led to an increase in property crime, but also to an alteration in the operation of power in society. The fact that the reformers called for change as these deep shifts occurred was not a coincidence. Rather, it was a "strategic coincidence," a change in the way power works. The intentions or free-will of the reformers were unimportant.

Foucault then dissects the reformers' case. Just as their calls for reform were linked to shifts in power, they attacked the way power worked in society. Foucault's metaphor of the economy is important here. Penal reform looked at the way that power operated, and its relationship to the king. It tried to maximize the efficiency of the whole operation. Fundamentally, reform was concerned with efficiency and illegality.

Another discussion of popular illegality follows. Foucault sees illegality as integrated into the workings of the state in pre-modern France. It is a necessary part of the state, but is also a space in which poor people can speak and act. Illegality is affected by structural and economic changes. What Foucault calls a "crisis" of popular illegality is really yet another shift towards illegal behavior that centers on goods. Whereas the peasant previously rioted to protect his land rights against a landlord, now he stole chickens. Or possibly did both: Foucault is unclear on this point. This is a strange attitude to popular behavior in the period, which many historians have criticized.

Illegality was also linked to the structure of the monarchy, which allowed it to occur. Reform began to attack illegality without attacking monarchy because the reformers wanted to make power work better. This interpretation has the benefit of explaining why many reformers were middle-class figures who were hostile to the lower orders. Foucault sees the theory of the contract (found in eighteenth- century authors such as Pufendorf and Rousseau) as the technology by which punishment came to act. If all the citizens agreed together to form a state, and to punish those who broke the laws, a great power was created. This power, whether it took the form of a monarchy or a republic, was immense. In part, the reformers were concerned with restraining the power to punish, in case it became dangerous. The answer they found, according to Foucault, was humanity. They used man as a standard to measure punishment and power against. They were not all that concerned for the criminal himself. This seems like a remarkably cynical view.

From the idea of reform as calculation comes another calculation: the obstacle- sign. Punishment becomes a sign that shows the public the right path to follow, but which also relates exactly to the crime. This is very different to the execution. Punishment is no longer concerned with re-establishing order, but with preventing crime. Those who see a criminal being punished are now not necessary as part of the ritual. Rather, the ritual is designed to stop them from committing crime.