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Trusted Criminals Designed by: Jordan Land, M.S.

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1 Trusted Criminals Designed by: Jordan Land, M.S.

2 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

3 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

4 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

5 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

6 What Do We Want To Explain?
Yet another issue in the explanation of white collar crime is the appropriate explanatory level Macro-level Focuses on the conditions within a society or the organization that promotes white collar crime Micro-level Focuses on the offenders and their individual propensities and choices Meso-level Focuses on situational factors

7 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

8 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

9 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

10 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

11 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

12 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

13 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

14 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

15 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

16 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: 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

17 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

18 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

19 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

20 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

21 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

22 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

23 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

24 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

25 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

26 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

27 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

28 Social Process and Learning
Differential association views criminal behavior as learned through contact with others with a law-violating 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

29 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

30 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?”

31 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

32 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

33 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

34 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

35 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”

36 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

37 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: Status deprivation theory Differential opportunity theory General strain theory Institutional anomie theory

38 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

39 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

40 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

41 Limitations of the Marxist Account
There are two obvious limitations: It does not explain either the existence of significant levels of white collar crime in socialistic countries or significant variations among different capitalist countries It is not helpful in explaining why some individuals and organizations within capitalist societies engage in white collar crime while others don't

42 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

43 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

44 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

45 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

46 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: Structural Marxist theory Differential association theory

47 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

48 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)

49 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

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