Trusted Criminals
WHITE COLLAR CRIME IN CONTEMPORARY
S O C I E T Y 4 TH E D .
CHAPTER 8
EXPLAINING WHITE COLLAR CRIME
THEORIES AND ACCOUNTS
Designed by: Jordan Land, M.S.
Introduction
 A Theory is a formal version of an explanation,
although it is not necessarily a comprehensive
explanation
 It attempts to explain a class of events, whereas an
explanation might simply attempt to make sense of a
specific event
 In the conventional view, a good theory can be tested
and fits the evidence provided by research
Underlying Assumptions and Points of Departure
 Every attempt at explanation invokes certain
metaphysical, ontological, and epistemological
assumptions about the ultimate nature of reality and
being, and how we come to know and understand
our world
 It is important to understand that almost anything
we might say about white collar crime is rooted in
our assumptions, whether explicit or implicit,
concerning such questions
What Do We Want To Explain?
 The conventional answer is that we must explain
criminality, or what makes individuals or
organizations commit white collar crimes
 A second answer is that we must explain the crime,
or the event itself
 Criminal behavior has been treated as both an
individual propensity and as an event
 Among the elements cited to explain criminal
behavior are motivation, freedom from social
constraints, skill, and opportunity
What Do We Want To Explain?
 A third answer to the question is that
criminalization must be explained first

The process whereby particular activities, entities and
individuals come to be defined as criminal
 A truly substantial explanation for white collar crime
must address each of these matters, and ideally it
must explore the variety of interrelationships
involved in white collar crime as criminality, as an
event and as criminalized activity
What Do We Want To Explain?
 Yet another issue in the explanation of white collar
crime is the appropriate explanatory level

Macro-level

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Micro-level


Focuses on the conditions within a society or the organization that
promotes white collar crime
Focuses on the offenders and their individual propensities and
choices
Meso-level

Focuses on situational factors
The Biogenetic Explanation
 At its core was the notion that criminals are
inherently different from other people, even down to
their appearance
 This explanation was promoted by Franz Joseph
Gall’s phrenology and Italian criminologist Cesare
Lombroso’s concept of the “born criminal” as an
atavistic type
 During much of the 20th century , biogenetic
explanations of criminality emerged, focusing on
factors ranging from body type to brain chemistry
The Biogenetic Explanation
 Some criminologists who do not embrace the
conservative agenda accept the proposition that
genetic and brain dysfunction factors may play a role
in criminality
Psychological Explanations
 The focus is on personality, mental processes, the
enduring effects of early childhood traumas, and the
like
 The single most famous psychological explanations
of human conduct were advanced by Sigmund Freud
 Freudian approach can be viewed as a reflection of
the eternal conflict between the desires of the
individual and the needs of civilization
 More specifically, could be linked with defects in the
superego, the ego or the id
Personality
 Personality traits are among the most examined of
all psychological explanations of white collar crime
 There are relatively few studies exploring the
relevance of personality for involvement in white
collar crime
 They have not produced any clear evidence of
psychological abnormality, and most offenders
appear to fall within the range of normal personality
types
Personality
 Personality is most typically associated with the
behavioral characteristics of an individual
 Character and identity are associated with an
individual’s nature, especially his/her moral or
ethical qualities
Sociogenic Explanations
 Some theoretical and empirical work that adopts a
sociogenic framework also addresses the matter of
criminality, especially in terms of alleged differences
in criminal propensities among members of different
social classes or groups
 Gottfredson and Hirschi (1990) suggested that
varying levels of self-control are fundamental factors
in people’s choices to commit crimes and that low
social control is more pronounced among lower-class
individuals
Organizational Responsibility
 When we engage in the common practice of referring
to organizations or networks of organizations as
actors, we are not simply speaking of a sum of people
and their individual actions but of patterned
institutional practices
 Sutherland moved back and forth rather freely
between discussing the crimes of people of the upper
socioeconomic classes and the crimes of corporations
Organizational Responsibility
 Donald Cressey criticized his former mentor
Sutherland for attributing human capabilities to
corporations rather than distinguishing them from
real people
 Cressey insisted that we must recognize that
corporations are not people, cannot learn, do not
have motivations and cannot form intent
Organizational Responsibility
 In a specific response to Cressey’s critique,
Braithwaite and Fisse defended the notion that
corporations can take criminal action and can be
properly held responsible for such action
 They argued that a mixture of observable and
abstracted characteristics defines both individuals
and corporations
Organizational Responsibility
 The entire organization is seldom involved in
corporate crime
 The majority of personnel do not directly participate
 Organizations create opportunities for illegal
conduct by:




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Disproportionately serving affluent, accessible
victims
Generating impersonal transactions
Creating and allocating resources
Providing strategic devices to facilitate and cover up
illegalities
Conditioning the development of new normative
prescriptions capable of being violated
The Various Dimensions
of Organizational Criminality
 Different levels of organizational analysis are relevant to
understanding organizational crime
 On the psychological level, the organization is viewed as
a context or environment that can influence individuals’
attitudes and behavior in a criminal direction
 On a structural level, the organization is viewed as having
structural features and social processes that facilitate the
commission of crime
 On an ecological level, the organization is viewed as part
of an environment or interdependent system that has
criminogenic tendencies
The Various Dimensions
of Organizational Criminality
 Some organizations are crime coercive whereas
others are crime facilitators
 Theories of corporate crime have either attempted to
explain why some corporations commit crimes and
others do not or have addressed the apparent overall
increase in corporate illegalities at particular periods
of time
The Various Dimensions of Organizational
Criminality
 Externally, a variety of factors are related to
corporate crime, including:

Economic climate, political and regulatory
environment, level of industry concentration, style
and strength of product distribution networks,
product differentiation and normative traditions
within industries
 Corporations are more likely to engage in corporate
crime when legitimate opportunities to achieve their
goals are blocked but illegitimate opportunities are
available
Explaining White Collar Crime: Theories and
Perspectives
 Many explanations of white collar crime focus more
on the crime rather than on criminality
 Sociological theories emphasize structural factors
 A structural perspective in criminology focuses
either on social conditions that account for specific
forms of criminal behavior or on how the
distribution of power and resources influences how
crime is defined and generated
 Some white collar crime is carried out individually,
but much is a cooperative activity involving two or
more individuals
General Theories of Crime and White Collar
Crime Theory
 Sutherland advanced his theory of differential
association as a general theory that could account
for both conventional and white collar crime
 Although general theories may have some success in
accounting for natural and physical phenomena, they
are less usefully applied to the enormously variable
realm of human activity
Classical Criminology and Rational Choice
 The core notions of humans as capable of making
rational choices and of a system of justice with
equitable punishments that fit the crime have long
been central to the operation of our criminal justice
system
 The classical assumptions about human nature have
recently been embraced by neoclassical
criminologists and proponents of rational choice,
routine activities and social control perspectives
Classical Criminology and Rational Choice
 Criminologists essentially see criminal offenders as
people who reason and plan strategically, adapt to
particular circumstances and weigh costs and
benefits
 Individuals who commit crimes are not averse to
breaking laws if they see an opportunity they
perceive to have a low likelihood of sanctions and the
expectation of personal benefits
Classical Criminology and Rational Choice
 Rational choice assumptions would appear to be
especially applicable to white collar crime
 If we assume that humans have the capability of
making rational choices, then those who are better
educated and better positioned in life would seem to
have an advantage in considering and acting on
various options
Alternative Dimensions of Crime and Choice
 Paternoster and Simpson have characterized corporate
crime as criminal activity that is rooted in instrumental
and strategic choices made by risk-averse managers who
weigh various options’ perceived costs and benefits to
themselves
 Routine activities theory also incorporates an
assumption of rational decision making in its approach
to crime
 The theory focuses on crime events as a consequence of
the presence of motivated offenders, suitable victims or
targets and the absence of capable guardians
Social Control and Bonds
 Social control theory reverses the conventional
questions of why someone engages in criminal
behavior and instead asks why someone does not
engage in criminal behavior

The answer is that people with strong bonds to
conventional institutions are constrained from
engaging in delinquent or criminal conduct
 If social control theory is valid then we would expect
that corporate executives with stronger bonds to the
corporation are more likely to engage in corporate
crimes on behalf of the corporation
Control Balance and Control Fraud Theories
 Control balance theory holds that crime and
deviance are a function of the “control balance ratio”
or the amount of control one exercises relative to the
amount of control imposed upon one
 So either a surplus of control or a deficit of control
should foster criminal behavior and deviance
 Control fraud holds that when control over an
organization is realized, that organization becomes a
weapon for perpetrating fraud and theft
Social Process and Learning
 Differential association views criminal behavior as
learned through contact with others with a lawviolating orientation
 An overriding limitation of this theory is that it does
not adequately account for structural origins of the
illegal patterns of behavior and appears to confuse a
process of involvement in criminal behavior with a
cause of such behavior
Social Process and Learning
 Differential association does not address the
problem that some white collar crime is
individualistic and that collective forms of white
collar crime are committed by individuals who hold
many attitudes that are favorable to obeying laws
 Sutherland’s theory hardly provides us with a
comprehensive explanation of white collar crime
Interactionism and Labeling
 Interactionist or labeling perspectives on crime are
derived from a symbolic interactionist tradition
emphasizing that meaning emanates from human
interaction
 Labeling theory has been principally concerned with
the process of societal reaction on perceived crime
rather than with the standard etiological question,
“What made them do it?”
Interactionism and Labeling
 The first point relevant to white collar crime is that
powerful individuals and organizations are more
likely than the powerless to be able to avoid being
labeled as deviant or criminal, or to be able to
negotiate more successfully the terms of any effort to
so stigmatize them
 The claim that the labeling process itself inspires
more criminal behavior than it deters has been
challenged on various grounds, and it is difficult to
demonstrate empirically
Interactionism and Labeling
 White collar offenders who have been processed by
the criminal justice system typically have more
legitimate options than conventional offenders and
are likely to be able to minimize the full effects of the
stigma
Neutralizations, Rationalizations and Accounts
 The interrelated concepts of neutralization,
rationalization, and accounts play a central role in
efforts to make sense of white collar criminality
 White collar offenders tend not to be classic “outlaw”
types
 White collar criminals most typically conform to
most laws and social conventions and are unlikely to
identify with or endorse the activities of conventional
offenders
Neutralizations, Rationalizations and Accounts
 So, how do they become lawbreakers?
 First, you must understand a vocabulary of motives:
Excuses- tend to be defensive
 Justifications- positive interpretations of actions
 Neutralizations- future or ongoing behavior
 Accounts- are invoked after the behavior has occurred
 Rationalizations- mental processes which allow a person who is
committing or about to commit a crime to overcome guilt or moral
inhibitions and justify the crime to themselves or others
 People who embezzle money rationalize that they were
only “borrowing” it

Structural Strain
and the Structure of Opportunity
 Emile Durkheim’s conception of anomie referred to a
situation of normlessness, a breakdown of the
guidelines for conventional behavior during rapid
social change
 The insider trading crimes of the 1980s have been
linked with an anomic situation that fostered “the
unbridled pursuit of pecuniary rewards”
Structural Strain
and the Structure of Opportunity
 Merton’s revised notion of anomie refers to an
enduring situation in a society in which a generalized
goal of material success is promoted, but the means
to achieve such success legitimately are not equally
distributed
 Merton also gives the label “innovative” to one class
of adaptations that those who lack equal access to
legitimate means use to achieve material success

Among those “innovations” is illegal behavior
Structural Strain
and the Structure of Opportunity
 Anomie theory has been applied quite specifically to
understanding the innovative corporate use of illegal
strategies to realize goals that cannot be achieved
legitimately
 There are theorists who have produced variations of
Merton’s theory:
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Status deprivation theory
Differential opportunity theory
General strain theory
Institutional anomie theory
Conflict Theory and Criminogenic Societies
 Conflict theory rejects the consensus theory notion
of the social world as an organic or integrated system
 In its so-called “non-partisan” form, conflict theory
is concerned with identifying how the values and
interests of different groups in society are
disproportionately able to influence the character
and content of the law
The Structure of Contemporary Capitalist Society
and White Collar Crime
 The most basic form of structural explanation for
white collar crime forces on the nature of society
itself
 One principle version of conflict theory is Marxist or
neo-Marxist theory
 Karl Marx viewed crime as an essential product of a
social class society, and of capitalism in particular

He believed that humans manifest such patterns of
behavior, and that capitalism promotes these
tendencies in human beings
The Structure of Contemporary Capitalist Society
and White Collar Crime
 In the Marxist view, the worst crime committed in
the name of capitalism is the systematic exploitation
of the working class
 Marx suggested that crime by the rich and poor alike
is a rational, inevitable response to an economic
system that fosters greed, egoistic or individualistic
tendencies, competitiveness, and debasement of
humans

Whenever the capitalist system undergoes an
economic crisis, pressures to commit crimes increase
Limitations of the Marxist Account
 There are two obvious limitations:
1.
It does not explain either the existence of significant
levels of white collar crime in socialistic countries or
significant variations among different capitalist
countries
2.
It is not helpful in explaining why some individuals
and organizations within capitalist societies engage
in white collar crime while others don't
Radical and Critical Perspectives
on White Collar Crime
 Reiman (1982) argued that Marxism is materialist in
explaining white collar crime as resulting from the
organization of material production
 Whereas radicalism is idealist, at least when it
explains white collar crime as a function of the
intentions of elites
 Much of the radical criminological work for this
period examined the criminalization process as
opposed to the “causes” of crime
Radical and Critical Perspectives
on White Collar Crime
 Since the 1980s, new perspectives emerged within an
evolving radical or critical criminology
 These perspectives include:

Left realism, peacemaking criminology, feminist
criminology, and postmodernist criminology
 Neither the causes of crime in the conventional sense
nor white collar crime itself have been important
preoccupations of these perspectives
 They have been more concerned with how crime is
conceived of or constituted
Explaining Criminalization
and White Collar Crime
 Explaining criminal behavior and crime has
historically been the primary focus of criminology
 In a legalistic sense, no crime exists until and unless
there is formal recognition that a type of activity
should be designated a crime
 The criminalization process has been directly linked
with patterns of engagement in white collar crime
Explaining Criminalization
and White Collar Crime
 The seminal critic of capitalism, Karl Marx, did not
favor criminalization as a response to exploitative
and harmful corporate activities
 For Marx, law by its very form was likely to favor
privileged segments of society
 The failure to criminalize some forms of harmful
white collar activity can help promote such activity
 The removal of legal control can create a whole range
of new criminal opportunities
Integrated Theories of White Collar Crime
 Coleman (1987) developed an integrated theory that
centers on the coincidence of appropriate motivation
and opportunity

A culture generates motives for lawbreaking when it
emphasizes “possessive individualism,” competition,
and materialism, justifies rationalizations, and
removes unified restraining influences
 Braithwaite (1989) based his integrative theory on
two traditions:
1.
2.
Structural Marxist theory
Differential association theory
Integrated Theories of White Collar Crime
 Critical criminologists who address corporate crime
typically adopt an integrated theoretical approach

Taking into account variables operating on the level
of the:
Organization of the economy
 Corporate structure
 Market forces
 Organizational culture
 Interpersonal workgroups dynamics
 Rationalizations
 Identity factors

The Subprime Mortgage Market Frauds
 The disintegration of the subprime mortgage market
in the U.S. beginning in 2006, led to millions of
homeowners in foreclosure on their homes or facing
the prospect of foreclosure
 An application of a sophisticated integrated theory of
the subprime mortgage market frauds had certain
elements:



Structural level (macro)
Organizational level and Dramaturgic level (meso)
Individualistic level (micro)
The Subprime Mortgage Market Frauds
 On the structural level
 A capitalistic political economy has a core
characteristic - the relentless pursuit of profit and a
constant search for new markets
 On the organizational level
 We have uncoupling of mortgage originators from
mortgage holders
 On the individualistic level
 Those who were at the center of the frauds were
sometimes afflicted with egocentric, overly
optimistic, narcissistic, entitlement-oriented, and
excessive risk-taking personality attributes, as well as
character flaws in terms of integrity