Theories of White-Collar Crime

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Theories of White-Collar Crime




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Presentations text content in Theories of White-Collar Crime

Slide1

Theories of White-Collar Crime

Slide2

The “Discovery” of White-Collar Crime

Today, people are well aware of white-collar crime, and judges are willing to impose harsh sentences on white-collar criminals

However, this has not always been the case

In the 1960s people were very indifferent to white-collar crime and even sympathized with the offenders

Seen as much less serious than street crime

Edwin Sutherland changed the field when he published his essay on white-collar criminality

Argued that respectable executives, physicians, and politicians frequently violated the public’s trust and committed crime

At this time, white-collar crime was not recognized

White-collar crime existed but was unseen; rather, the focus was on crime of the lower-class

Slide3

The “Discovery” of White-Collar Crime

Five factors coalesced to increase concern about white-collar crime:

The turbulence of the 1960s and 1970s (Vietnam, Watergate, Kent State) caused the public to mistrust those in power, including the government and corporate officials

The Civil Rights Movement increased the salience of equality before the law

Consumer and environmental movements disclosed how corporations were defrauding consumers and polluting the environment

Television shows regularly publicized how those in positions of power abused the trust placed in them

Celebrated prosecutions of white-collar offenders were greeted with praise by the public

Slide4

The “Discovery” of White-Collar Crime

Criminological attention in white-collar criminality increased dramatically after the 1970sRediscovered Sutherland’s work on white-collar crimeWhite-collar crime now seen as a specialization in the field

Slide5

Sutherland: “White-Collar Criminality”

Sutherland worked for more than a decade collecting relevant materials (since 1928) before setting up his concept of white-collar crime or crime related to business

Claimed criminality in business was expressed most frequently in the form of misrepresentation in financial statements, manipulation of the stock exchange, commercial bribery, bribery of public officials, misrepresentation in advertising, embezzlement, etc.

Presented his work at a meeting of sociologists and economists in 1939 and published it in 1940

This work deemed him the father of white-collar crime

Argued his intent was scientific in that traditional theories that explain lower-class crime cannot explain business crime

Claimed he had no intention of reforming the business world

Slide6

Sutherland: “White-Collar Criminality”

“White-collar” was the term used to describe respected members of the community in trusted occupational positionsWhite-collar crime is defined as a crime committed by a person of respectability and high social status in the course of an occupationThis definition is intentionally vague with many scholars still debating what conduct should be called white-collar crime

Slide7

Sutherland: “White-Collar Criminality”

Sutherland offered two distinct criteria for white-collar crime in his 1940 work:

The crime had to occur in the course of the person’s occupation

The crime had to be committed by a person of respectability and high social status

Sutherland wanted to focus on the crimes of the rich and powerful

This criteria causes much difficulty because hard to determine how much respectability a person must possess for it to be white-collar crime

Slide8

Sutherland: “White-Collar Criminality”

Argued the varied types of white-collar crime could be reduced to two categories:Misrepresentation of asset values Examples: fraud, swindlingDuplicity in the manipulation of powerExample: double-crossOffender holds two antagonistic positions The trust of one position is violated in the interest of the other position

Slide9

Sutherland: “White-Collar Criminality”

Sutherland addressed what should be considered white-collar crime

Some argue that research should only focus on those acts that have resulted in a conviction in a criminal court

Sutherland rejected this view

Realized many harms perpetrated by companies were not treated as crimes and they could escape criminal prosecution because they had the power to shape the laws passed and how the statutes were enforced

Slide10

Sutherland: “White-Collar Criminality”

Sutherland addressed what should be considered white-collar crime

Argued

convictability

should be central to the decision on what counts as white-collar crime

Whether the white-collar offense could potentially be prosecuted under criminal law or would have been if pressure were not placed on the prosecuting agency

Also recognized the impact of class bias in the courts

Recognized other agencies besides the criminal court must be included (e.g., administrative boards, etc.)

Contended people who are accessories to the crime must also be included when counting white-collar crime

Slide11

Sutherland: “White-Collar Criminality”

Claimed crimes of the lower-class and white-collar crimes differ principally in the implementation of the criminal laws that apply to them

Lower-class crime handled by the CJS with penal sanctions, while white-collar crimes often result in no official action or are dealt with as civil cases or by regulatory boards

The difference in the implementation of the criminal law between lower-class crime and white-collar crime is due principally to the difference in the social positions of the two types of offenders

Powerful, white-collar offenders are able to influence the law and often bypass it

Also, white-collar victims are often unorganized, lack technical knowledge, and cannot protect themselves, thus allowing the white-collar offender to better defend himself/herself

Slide12

Sutherland: “White-Collar Criminality” and The Importance of Studying White-Collar Crime

In his 1940 piece, Sutherland identified why it was important to study white-collar crimeThe public’s ignorance about the costs of these white-collar offensesA single scandal can costs millions with the financial cost of white-collar crime probably several times as great as the financial cost of all the crimes which are customarily regarded as the “crime problem”White-collar crime has “social costs”White-collar crime lowers morale and produces “social disorganization on a large scale”Creates distrust that damages social relationsLowers confidence in central institutions

Slide13

Sutherland: “White-Collar Criminality” and The Importance of Studying White-Collar Crime

White-collar crime does take lives and hurts peopleThere are “physical costs” where people die, are injured, and are made illExamples: defective products, unsafe working conditions

Slide14

Sutherland: “White-Collar Criminality” and The Importance of Studying White-Collar Crime

White-collar crime calls into question almost all theories of crime

Many theories unable to explain this type of crime

Many traditional theories focus on the role of poverty, and most white-collar offenders are not in poverty

Need to develop general theories of crime that can explain all varieties of illegal conduct—or—

Create theories specific to white-collar crime—or—

Develop general theories that use the same core variables to explain all types of crime but argue that the content of those variables differs across offense types

Sutherland did this with differential association theory arguing white-collar crime, like all crime, is learned

Slide15

Sutherland: “White-Collar Criminality” and the Importance of Studying White-Collar Crime

Corporations have such a large impact because they touch everyday American life through employment and products we consumeTherefore, we need to study the crime committed by these agencies

Slide16

Sutherland: “White-Collar Criminality”

Overall, Sutherland made three important contributions to the field:

Introduced the concept of white-collar crime and noted what kinds of actions fell under this umbrella

Put to rest that crimes by respectable members of society did little damage

Challenged the existing criminological theories of crime

Slide17

Sutherland’s Book: White Collar Crime

In 1949, Sutherland presented the results of his analysis of 70 of the largest industrial and commercial corporations over the course of their lifetimeFound every company had at least one adverse legal decision, and they averaged 14 violations98% had two or more transgressionsCounted criminal convictions and civil court decisionsEven when restricted to criminal convictions only, 60 percent of the corporations had convictions, with an average of four convictions eachThus, most corporations were recidivists

Slide18

Theories of White-Collar Crime

Tend to incorporate one or more of four central factors:Exposure to a criminal cultureLife in a competitive financial systemUnique illegitimate opportunities produced by a legitimate work settingThe decision to break the law by respectable people

Slide19

Theories of White-Collar Crime

Exposure to a criminal culture

Sutherland argued in differential association theory that people offend because they are exposed to definitions favorable to crime and to the techniques needed to commit any given criminal act

Crime is learned by interacting with others who are already involved in criminal pursuits

Applied this theory to crime in disorganized inner-city areas

Also applied this to white-collar crime

Slide20

Theories of White-Collar Crime

Exposure to a criminal culture

Proposed many sectors in the legitimate work world were socially disorganized and more organized for crime than against it

White-collar crime had similar causes as street crime

Criminal cultures flourish in many white-collar sectors creating a “normalization of deviance”

When under pressure to create results, criminal values can arise

When dangerous risks arise, there is a tendency to define them as technical issues that can be safely ignored or solved

Norms arise to minimize or normalize the risks

Slide21

Theories of White-Collar Crime

Exposure to a criminal culture

People learn certain unethical and illegal business practices are normal

Efforts made to teach newcomers criminal values and skills

Resistance is seen as not being a team player

Companies provide strong differential associations that favor and reward legal violations

Learn the techniques and definitions of crime while developing an ideology that accepts criminal violations

Variations in illegalities are linked to the degree to which corporate cultures support criminal practices

Slide22

Theories of White-Collar Crime

Competitive financial worldSome argue money is the root of all evilPeople may commit crime to solve financial problemsDonald R. Cressey argued embezzlement was a response to a “non-sharable problem” when the person is in a position of trust and can rationalize the feelings of guiltExample: gambling debts, excessive family expensesOthers argue white-collar crime is nurtured by the ever-present profit motivationMaximization of profits supersedes concerns for the well-being of workers, customers, or the communityAny means necessary used to make money

Slide23

Theories of White-Collar Crime—Shover and Hochstetler: “Choosing White-Collar Crime”

Opportunities to offendWork is filled with both legitimate and illegitimate opportunitiesShover and Hochstetler use the concept of lure to describe the presence of attractive targets for offending Lure is arrangements or situations that turn headsHowever, the chance to offend is not a full-fledged opportunity unless credible oversight is lackingThus, lure is not a criminal opportunity unless there is a lack of oversightLure makes the criminally predisposed and tempted sensitive to whether their actions are being monitored and how oversight can be defeated

Slide24

Theories of White-Collar Crime—Shover and Hochstetler: “Choosing White-Collar Crime”

Opportunities to offend

A criminal opportunity is an arrangement that offers potential for criminal rewards with little apparent risk for detection

Lure is a key determinant of the supply of opportunities for white-collar crime

People and organizations can be

predisposed

to exploit lure

The middle-class and upper-class backgrounds of white-collar criminals can lead to a predisposition to exploit lure

Slide25

Theories of White-Collar Crime—Shover and Hochstetler: “Choosing White-Collar Crime”

Opportunities to offend

Middle-class family and community life may be a “generative world”

Socialized to exert social power in relationships, take risks, and be competitive

May become arrogant and uncaring toward others or have a sense of entitlement

Develop linguistic skills to help them neutralize constraints and deny guilt

Slide26

Theories of White-Collar Crime—Shover and Hochstetler: “Choosing White-Collar Crime”

Opportunities to offend

Many white-collar jobs involve trust with little oversight

The regulatory and criminal justice systems often provide no or ineffective oversight of powerful lures in white-collar settings

Often place corporate economic interests above the interests of workers or consumers

Lure becomes opportunity in the absence of credible oversight

Slide27

Theories of White-Collar Crime—Shover and Hochstetler: “Choosing White-Collar Crime”

Opportunities to offend

Self-restraint is the first line of defense against criminal decision-making

Lure is a criminal opportunity when offenders are indifferent to the tug of conscience, reputation, or concern for family and peers

State oversight is external to the individual

Not very effective

Can be direct observation by individuals or impersonal monitoring via periodic audits, television cameras, or computer programs

Slide28

Theories of White-Collar Crime

Opportunities to offend

Benson and Moore argue three properties characterize white-collar offenses:

The offender has

legitimate access

to the location in which the crime is committed

The offender is

spatially separated

from the victim

The offender’s actions have a

superficial appearance of legitimacy

The above conditions provide ample opportunities to deceive others and to conceal conspiracies to offend

Slide29

Theories of White-Collar Crime

Decision-making by respectable offenders

Must deal with the cognitive dissonance of a being a good person doing a bad thing

Use the techniques of neutralization (Sykes and Matza)

People have to invoke beliefs that would neutralize normative controls

Makes breaking the law permissible

Slide30

Theories of White-Collar Crime— Benson: “Denying a Guilty Mind”

Decision-making by respectable offendersBenson calls this “denying the guilty mind” or denying criminal intentDo not deny behavior, but deny that their actions were motivated by a guilty mindDevelops the concept of “accounts” or the justifications white-collar offenders use to permit them to neutralize feelings of guilt before and following criminal behaviorTwo varieties of accounts:Prior to the criminal act or during an ongoing criminal enterprise that might last months or yearsRelieves feelings of guilt and allows the conduct to continueRationalization occurring after the actAllows the offender to cope with the stigma of being publicly defined as criminalFurnishes an excuse for their conduct

Slide31

Theories of White-Collar Crime— Benson: “Denying a Guilty Mind”

Decision-making by respectable offenders

Benson argues these people break the law but deny they are a “true criminal”

Do not have a past arrest record

Accounts explain why crime is not really serious and why the offender is not really blameworthy

Accounts are tied to the offender’s social situation

In a capitalist society, offenders are likely to explain criminality by arguing illegal practices were necessary to make profits for shareholders and to keep the firm afloat

In a bureaucracy, offenders can argue they were just following orders or did not have the decision-making power because of the diffusion of responsibility

Slide32

Theories of White-Collar Crime— Benson: “Denying a Guilty Mind”

Decision-making by respectable offenders

Accounts are also shaped by the specific criminal enterprises in which they are engaged

Antitrust violators

Focused on the everyday character and historical continuity of their offenses and argued they were following established and necessary industry practices

Need to make profit to survive

Their actions were blameless and a harmless business practice

Were very critical of the motives and tactics of prosecutors

Compared their crimes to the crimes of street criminals

Slide33

Theories of White-Collar Crime— Benson: “Denying a Guilty Mind”

Decision-making by respectable offendersAccounts are also shaped by the specific criminal enterprises in which they are engagedTax violatorsClaim everyone cheats somehow on their taxesSee self as getting an unlucky breakArgue they did not know due to the complexity of the tax lawsSimple errors resulting from ignorancePoor recordkeepingArgue they have altruistic motivesCompare self to street criminals

Slide34

Theories of White-Collar Crime— Benson: “Denying a Guilty Mind”

Decision-making by respectable offenders

Accounts are also shaped by the specific criminal enterprises in which they are engaged

Violations of financial trust (embezzlement)

Unlike the other offenders, admitted responsibility

Argued they were under extraordinary circumstances and the offense was an aberration in their life history

Argued they had some restraint because they did not take more money

“Was not himself” during the crime

Slide35

Theories of White-Collar Crime—Benson: “Denying a Guilty Mind”

To effectively deny the guilty mind, the offender must:

Minimize the seriousness

of their criminal act

Argue they may be helping others

Contend everyone was doing it, so it was normal

Lack of identifiable victims

Convince others their

blameworthiness

was slight

Argue the complexity of the laws and regulations are to blame

Crimes due to ignorance or inattention—accidental

Contend there were extenuating circumstances

The decision to offend is shaped by the offender’s location in the life course, in a particular society, and in a specific occupation

Slide36

Theories of White-Collar Crime— Shover and Hochstetler: “Choosing White-Collar Crime”

Decision-making by respectable offendersShover and Hochstetler argue that white-collar crime is a reasoned choice Assert that it is rational to the extent that offenders weigh the costs and benefits of the crimeBut, like street criminals, offenders weigh the potential payoffs of crime more heavily than the estimated risksIndividual propensities shape what offenders weigh and choose

Slide37

Theories of White-Collar Crime— Shover and Hochstetler: “Choosing White-Collar Crime”

Decision-making by respectable offenders

This rational choice is also placed within the social context of the offender

White-collar settings are filled with lure and little oversight

Individuals respond differently to opportunities (lure) depending on their internal self-restraints and their criminal predispositions

Thus, the choice to offend is a product of lure, oversight, and the internal restraints and motivation of the offender

White-collar offenders often pay more attention to the profits from their schemes than to the risk of being detected

Benefits are easily seen as large, with little state oversight

White-collar crime is committed when people estimate the payoff as greater than the risks or consequences of being caught

Slide38

Theories of White-Collar Crime— Shover and Hochstetler: “Choosing White-Collar Crime”

Decision-making by respectable offenders

The key in lowering white-collar crime is to use public policy to constrain individual decision-making so that those who consider crime do not find it to be a profitable option

To determine the effectiveness of deterrence of white-collar crime, one needs to examine the subsequent, short-term effects of increased sanctions on specific types of white-collar offending

The results are mixed

Slide39

Summary

Sutherland introduced the concept and study of white-collar crime

Many theorists since Sutherland have tried to explain why white-collar crime occurs

Some argued that exposure to a criminal culture in a work setting was the cause (Sutherland)

Others focused on the competitiveness of the corporate world

Still others examined the opportunities for and lure of white-collar crime (Shover and Hochstetler)

And finally, others explained white-collar crime by the decisions of offenders and their ability to rationalize the behavior or deny their guilt (Benson, Shover, and Hochstetler)


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