Controversies in White-Collar Crime

Gary Potter

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781317523680
• Edition: 1
• Topic: Law
• Subtopic: Criminal Law
• Index: Law

Original writings explore the issue of white-collar crime and the controversies that surround it, focusing on the vastness of state-corporate and white-collar crime, the victimization that results, and the ways these crimes affect society environmentally, politically, economically and personally.

CHAPTER 1

Thinking About White-Collar Crime

Gary W. Potter

Karen S. MIller

---

In his much-read and debated paean to orthodox, conservative crime ideology, Thinking About Crime, Professor James Q. Wilson dismisses the importance of white-collar crime in American society by arguing that the essence of “real” crime is (1) the arousal of fear and the occurrence of injury; (2) a rending asunder of the “social contract”; (3) the commission of acts that are not merely dangerous but more importantly “immoral”; and (4) the commission of acts that are clear violations of criminal statutes.¹ To Professor Wilson’s way of thinking, crimes committed by those with economic and social power are really ambivalent acts for which condemnation is apparently a matter of personal taste. He says:

By contrast, while some nations punish businessmen who form industrial trusts, others elevate such men to peerage. Some nations think the quality of the environment or the safety of cars or the corruption of political life are largely private matters; others think they are public ones. But all nations punish, in the name of the state, theft and unjustified violence.²

So, price-fixing, anti-trust violations, pollution, dangerous working conditions, bribery, and unsafe consumer products could be, in Professor Wilson’s view of the world, both private affairs and even honorary acts. In fact, Professor Wilson gets somewhat indignant about the whole topic, arguing:

To me, and I suspect most citizens, all this seems obvious, and thus one should not have to apologize for writing a book about predatory crime and leaving to others the important task of writing about “white-collar” crime. But some leftist intellectuals are so preoccupied with turning all discussions of social problems into an attack on the prevailing economic and political order that their customary response to the public’s concern with street crime is to change the subject.³

Not wanting to incur Professor Wilson’s wrath, let’s not change the subject. No one disputes that “street crime” is a serious problem with serious consequences, despite an unbroken, 27-year pattern of declining victimization.⁴ But, like many conservative intellectuals so preoccupied with justifying repressive crime control policies and so insistent upon apologizing for the immoral behavior of the powerful that makes a mockery of the social contract, Professor Wilson protests too much. The facts of “white-collar crime” are simple. In any given year, it causes exponentially more economic damage than all street crimes put together. In any given year, it kills, maims, and injures exponentially more innocent people than all street crimes combined. It makes the social contract a social joke by violating obligations to consumers, employees, and the state. In the words of C. Wright Mills, it mocks social and political order by creating a “higher immorality.”⁵ And, as Clinard and Yeager point out, it reveals what Professor Wilson feels to be ambivalence, as what it really is, social hypocrisy of the most despicable kind:

Corporate crime provides an indication of the degree of hypocrisy in society. It is hypocritical to regard theft and fraud among the lower classes with distaste and to punish such acts while countenancing upper-class deception and calling it “shrewd business practice” A review of corporate violations and how they are prosecuted and punished shows who controls what in law enforcement in American society and the extent to which this control is effective. Even in the broad area of legal proceedings, corporate crime is generally surrounded by an aura of politeness and respectability rarely if ever present in cases of ordinary crime. Corporations are seldom referred to as lawbreakers and rarely as criminals in enforcement proceedings. Even if violations of the criminal law, as well as other laws, are involved, enforcement attorneys and corporation counsels often refer to the corporation as “having a problem”: one does not speak of the robber or the burglar as having a problem.⁶

So, let us begin thinking about white-collar crime by addressing the issue of heinousness, both economic and predatory.

White-Collar Crime, the Arousal of Fear and the Occurrence of Injury

The Cost of White-Collar Crime

In simple calculations of economic loss it is clear that losses from white-collar crime exceed losses from “street crimes” by an enormous margin in any given year. The economic losses resulting from street crimes are generally estimated by the FBI’s Uniform Crime Reports to be between $10 billion and $13.5 billion a year.⁷ The total economic damage from white-collar crime exceeds this total in every category. For example, Clinard and Yeager estimated the annual cost of corporate crimes to be between $174 billion and $231 billion a year.⁸ A 1982 analysis of the costs of corporate crime by U.S. News & World Report estimated that price fixing, false advertising, corporate tax evasion, and corporate fraud cost $200 billion a year.⁹ The General Accounting Office established the annual loss from healthcare fraud at $70 billion a year.¹⁰ Researchers estimate that employee theft, pilferage, and embezzlement cost about $200 billion a year.¹¹ Medicaid and Medicare fraud cost us about $61 billion a year.¹² Unnecessary surgery costs the public about $4 billion a year.¹³ The costs of pollution, occupationally generated disease, adverse patient reactions to unsafe drugs, and the like are impossible to calculate with any degree of accuracy. So the total, very conservative estimate, of economic costs from white-collar crime would be between $509 billion and $566 billion a year, or roughly 38 to 57 times the cost of street crime, and none of this takes into account personal tax evasion by those who are involved in white-collar crime, which is safely estimated to be about an additional $100 billion.

The Occurrence of Injury

Some critics, like Professor Wilson, would tell us that these losses, while significant are spread across 217 million or so consumers, taxpayers, and workers. Being somewhat diffuse these losses are said to be less traumatic and upsetting to the victims than a robbery or burglary. Nonetheless, the loss is still about $2,608 per person, far in excess of the average loss of less than $62 from street crimes. But conservative critics would also aver that street crimes cause injury and death, thereby inculcating fear and trauma in potential victims. But even here, the claim of injury and death as an index of the severity of street crime is far too facile. White-collar criminals kill and maim in numbers that are truly staggering. As Steven Barkan points out, conservative estimates of the carnage from white-collar crime would include 55,000 annual deaths resulting from injuries or illnesses occurring at work; 30,000 annual deaths from the sale of unsafe consumer products; 20,000 deaths from various forms of environmental pollution; and 12,000 annual deaths from unnecessary surgery.¹⁴ In addition, about 100,000 workers die each year in the United States from work-related diseases, and an additional 11,000 die from work-related accidents.¹⁵ Somewhere between 12,000 and 16,000 people die each year from unnecessary surgeries.¹⁶ There is no way to determine how many people die from the inappropriate prescribing of prescription drugs; or inadequate nursing home care, or the denial of medical care in order to maximize insurance company profits. Nonetheless, again a very conservative estimate would be that at least 240,000 people die each year as a result of white-collar crime, compared to an annual homicide total of about 23,000, or a ratio of corporate carnage to street crime of about 10 to 1. And these numbers do not reflect the two million workers injured each year on the job because of dangerous working conditions maintained by their employers in violation of prevailing safety standards; or the 380,000 workers who contract new cases of job-related illnesses; or the 20 million serious injuries caused each year by unsafe and defective merchandise produced by corporation and sold to consumers.¹⁷ These 22 million corporate assaults are 26 times the total number of simple and aggravated assaults committed every year in the United States.

The Arousal of Fear

“Fear of crime” is a highly subjective criteria. As we know, many of the public’s perceived “fears” are based not on facts but on incorrect perceptions. For example, the public believes violent crime is constantly increasing, but in reality victimizations have been on a steady three-decade decline. The public ...

Table of contents

• Cover
• Title Page
• Copyright Page
• Acknowledgments
• Preface
• Table of Contents
• Chapter 1 Thinking About White-Collar Crime
• Chapter 2 White-Collar Crime
• Chapter 3 State-Corporate Crime in a Globalized World: Myth or Major Challenge?
• Chapter 4 Toward an Understanding of Academic Deviance
• Chapter 5 A Critical Model for the Study of Resource Colonialism and Native Resistance
• Chapter 6 Toxic Crimes and Environmental Justice: Examining the Hidden Dangers of Hazardous Waste
• Chapter 7 The Scandalization of America: Political Corruption in the Postmodern Era
• Chapter 8 Downsized by Law, Ideology and Pragmatics - Policing White-Collar Crime
• Chapter 9 Globalization, State-Corporate Crime, and Women: The Strategic Role of Women's NGOs in the New World Order
• Chapter 10 States, Corporations and the 'New' World Order
• References
• Index