Punish the older boy appropriately and swiftly. You need to drive home the point that starting a fight will always result in punishment. This behavior is socially unacceptable and if you can't impress this upon him in the safe and virtuous home environment he will learn the lesson in the real world with real world consequences.
As for the younger kid, I think the welt on his face is probably consequence enough. If he continues to advocate for more 'justice' than this, do not bend. Remind him of what a little shit he was being and how every act has consequences. Make sure his brother is within earshot so that he knows he was dealt with fairly.
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Strong advice. I do believe in clear, quick consequences. Especially with young kids.
My uncertainty enters in that the younger boy certainly did his best to provoke his brother. And there is some history of this pattern.
Also: the boys' idea of "fair" is not the same. I think this is what I'm trying to get at. Kids care about fairness a lot, but they also have kinda horrible instincts for what it is.
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If it is a clear pattern of provoking his older brother then additional punishment may be warranted. Your job (and it's not an easy one) is to provide clear, fair, and swift arbitration. You provide the moral structure that will shape your kids' behavior and morality throughout their lives. I think you're doing a good job based on the fact that you cared enough to ask for advice. Keep it up! You're a good parent.
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Kids seems to pick one fairness dimension only... e.g. the time spent with the kid, the number of times spent with the kid, the number of words, the number of hugs, the number of gifts, the size of the gift, the number of slices... "you are doing more with my brother than me!!!"
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