Here's the summary: Consequences should be related to the poor choice made, so that children can draw a logical conclusion to why they are being punished.
Here's an example: Children won't eat dinner; do not force them, excuse them and when they go get something to eat later charge them for it. Either they can pay it with money they have now, or it can be taken out of their allowance.
Here's another example: Child makes a mess, child cleans up a mess. Child won't clean up a mess, child pays you to do so.
And so on and so forth. Basically, every punishment should be something that would happen if they were independent and on their own. Over all, this can be challenging with young children because I don't think they have the maturity to consider being independent of parents yet, let alone how to problem solve independently.
I agree that in theory this logic is important for a parent to help a child grasp. I think that it is impossible to always have a "real life scenario" punishment. For example: Child jumps off bunk bed and injures themselves to the point of needing to go to the Dr. Having them pay the Dr. Bill at age 5 will not help them comprehend anything.