White collar crimes are estimated to cost society many times more than crimes such as robbery and burglary. The amount of death caused by corporate mishap, such as inadequate pharmaceutical testing, far outnumbers those caused by murder. White collar crime is relatively unstudied and not well understood. As a result, white collar criminals are able to slip through the cracks with massive profits and minor punishments. Understanding what motivates these crimes of greed should be the first step in understanding how to prevent them.
White collar crime was first defined by Edward Sutherland in 1949. Since then, criminologists have come to accept that white collar crime is as damaging, if not more so, than street crimes such as robbery, burglary, arson and murder. Sutherland explained white collar crime through differential association--a theory of crime that had major impacts on the entire field. Differential association explains that criminal behavior is a learned behavior. Since that time a handful of new theories have been applied to these crimes.
The rational choice theory has become one of the most used explanations for white collar crime. Rational choice states that humans will weigh the pros and cons of a behavior, and then act in their self interest. In the context of white collar crime, an individual would analytically compare the outcome of committing a crime compared to the outcome of not committing a crime. If the commission of a crime has a outcome with more positive than negative effects, the individual will commit the crime.
Theorists argue that this perspective does not account for societal influences and individual differences. For example, some offenders could be predisposed to crime because of their genetic makeup.
Types of white collar crime include the illegal dumping of commercial waste, fraud and anti-competitive business practices. These examples are all driven by the desire to increase corporate efficiency and profitability.
Corporations are required to dispose of waste in an environmentally-friendly manner, which can be expensive. Companies are often forced to outsource their waste management at a hefty markup. Some corporations choose to dump waste illegally or allow it to evaporate into the atmosphere. Individuals commit these crimes to reduce company expenses, which increases profits.
Fraud occurs when an individual or corporation is intentionally deceived for profit. A company may misrepresent products, or use misleading advertising to increase sales. These crimes are committed, once again, with the intention of increasing corporate profits.
Anti-competitive business practices include offenses such as unfair pricing and monopolizing products and markets. Both of these crimes are designed to disable competitors. With competitors out of the pictures, corporations are able to sell shoddy products for high markups. Again, the motivation is corporate profitability.
Financial incentives drive most white collar crime, but the fact that not everyone chooses to violate the law must be considered. What stops people from breaching society's moral codes for profit? Some theorists argue that strong social bonds and community involvement with a strong moral convictions reduce the likelihood of criminality. According to this theory, a family-owned business with strong beliefs against crime would be unlikely to engage in white collar crime. On the other hand, a company consisting of weak social connections and a goal of profit at all costs would be likely to engage in criminal behavior.
Anecdotal evidence shows that white collar criminals are sometimes given preferential treatment in the legal system. If a white collar criminal is tried for his or her offenses--which rarely happens--their prison sentences are short, and fines are trivial. This lack of punishment could motivate further criminal activity.
Cracking down on white collar criminals could reduce the problem. If theorists are correct and white collar crime is a rational choice, the fear of apprehension would play a role in the decision making process. Without fear of consequences, white collar criminals see few disadvantages to committing illegal acts.
Many people don't realize that they shoulder the burden of white collar crime. The cost of white collar crime is paid for by the public. Companies that fail because of shoddy business practices are often protected by the government to prevent widespread economic collapse. For example, the savings and loan scandal in the late 1980s and early 1990s was estimated to cost American taxpayers more $500 billion. The costs of white collar crime are massive, but spread out in such a way that they are difficult to detect. This feature of white collar crime further enables and motivates criminals to offend.