Prof Morgan said Scandinavian methods were more effective
The age of criminal responsibility should be raised to ensure fewer young people become serial offenders, the ex-head of the Youth Justice Board says.
Rod Morgan said placing youths in foster care or boarding schools could be more effective than locking them up.
The age of criminal responsibility is 10 in England, Wales and Northern Ireland and eight in Scotland.
Former Conservative home secretary Michael Howard said this was a "quite reasonable" threshold.
There are currently about 3,000 young people in custody in England and Wales.
Professor Morgan said the number had doubled in recent years and added that keeping one youth in a secure home cost the taxpayer £200,000 a year.
He added that the system in place in Finland - where the age of criminal responsibility was 15, just three young people were in custody and there was more focus on psychology and rehabilitation - should be studied.
He told BBC Radio 4's Today programme such methods were "working", adding: "The sad thing about this country is we are moving in the opposite direction."
Prof Morgan said that since the early 1990s "we have become more punitive. We are locking up twice as many young people and children as 10 to 15 years ago and we are criminalising many more of them.
"The interesting thing about this country is we already have certain statutes on the books that would allow us to follow the Scandinavian example."
Asked about the age of criminal responsibility, he replied: "I would prefer to raise it but I don't think that's a political option at the moment."
He added: "If we were to use our few state boarding schools and intensive fostering, it would cost less and it would be much more effective."
Mr Howard was home secretary at the time of the abduction and murder of three-year-old James Bulger by two 10-year-old boys in 1993, which led to widespread public outrage over youth crime.
He said of the age of criminal responsibility: "It's been 10 for a while and I think that's quite reasonable.
"I think it's a mistake to suppose that young offenders are sent to adult prisons, where hardened adult prisoners are held. These cases are dealt with by magistrates who sit in the juvenile court.
"Before a case gets to court in the normal course of events he's likely to be reprimanded first by the police and warned and then goes before the courts."
Custody was used "only when everything else has been tried", he added.
In a report last year, the United Nations Committee on the Rights of the Child recommended raising the age of criminal responsibility in England, Scotland and Wales.
Prof Morgan was chairman of the Youth Justice Board for England and Wales from 2004 to 2007.