White-Collar Crime: History of an Idea

The legacy of Sutherland. Sutherland's interest in the topic dates at least to the 1920s, although the research resulting in his White Collar Crime was initiated during the depression years of the 1930s. The first public treatment of the subject occurred when Sutherland titled his presidential address to the American Sociological Society in 1939 "The White Collar Criminal." He was apparently drawn to the topic in his search for a general theory of crime. The usual explanations in his day (and often today) stressed poverty and other pathological social conditions, but, argued Sutherland, these factors could not be a general cause of crime if crimes were also committed by persons of respectability and high social status. In the book-length version of the speech, which appeared a decade later, Sutherland aimed simultaneously to weaken theories depending on the behavior of the deprived and the depraved, and to provide support for his own social-learning approach to crime causation—the theory of differential association.

Sutherland was rather casual in his conceptualization of white-collar crime, at times stressing social status, at times behavior carried out in an occupational role, and at times crime committed by organizations or by individuals acting in organizational capacities. The confusion is reflected in his most frequently cited definition: "White collar crime may be defined approximately as a crime committed by a person of respectability and high social status in the course of his occupation" (p. 9). His book was devoted, however, to the crimes of organizations, not of persons: seventy large corporations and fifteen public utilities. Thus, a firm basis for ambiguity had been laid. Those following Sutherland sometimes focused on persons of high status, sometimes on occupations, and sometimes on corporate bodies.

Sutherland's book described the illegalities committed by those corporations, arguing that the corporations share most of the characteristics of professional thieves: their offenses are deliberate and organized, they are often recidivists, and they show disdain for law. Needless to say, with these conclusions the book had a controversial reception. Many in the social sciences hailed it as a landmark, whereas many in law and business attacked it as misleading and distorted. The principal basis for disagreement concerned the underlying concept of crime. The "crimes" of the corporations Sutherland examined were rarely prosecuted in criminal court: they were violations of administrative rules or simply contract cases to be processed, if at all, in civil court. Many in the legal community insisted these were not crimes at all. Sutherland's answer was that businessmen were more able to influence the course of legislation; it was only their greater power (relative to the lower-class criminal) that kept their offenses out of the traditional criminal law.

The battle over definition aside, Sutherland's pioneering work stirred few fires in the two decades after its publication. Detailed studies of particular offenses, such as Donald Cressey's examination of the violation of financial trust, were the exception rather than the rule. Of the triumvirate of status, occupation, and organization that underlay Sutherland's conception, interest tended to turn away from the status dimension itself, and toward those crimes made possible because of the defendant's occupational role (Newman). Some analysts spoke not of white-collar crime but of occupational crime. Offenders studied in these terms were not exclusively of high status. They included retail pharmacists, meat inspectors, and bank tellers. Although a much-publicized case of price-fixing in the electrical industry in 1961 (Geis and Meier) helped sustain an interest in the topic of crimes committed through, and on behalf of, organizations, sustained study of organizational crime did not flower until the next decade. Criminological research and theory continued to concentrate on juvenile delinquency and violent crime.

It is unclear why Sutherland's work generated so little new research or theory, although several reasons are plausible. The massiveness of Sutherland's undertaking, as well as confusion regarding the concept itself, may have played a part. The 1950s and 1960s were not depression decades, and the problems of a younger generation occupied public and governmental attention. It had also provided more convenient, historically, for social scientists to study the weak and deprived, rather than those in more powerful positions. The symbolic and evocative nature of the concept remained, however, awaiting changing conditions for new meaning to be infused into it.

From offender to offense. Societal interest in white-collar crime grew rapidly in the 1970s, rivaling the attention street crime had received in the preceding decade. Prosecutors gave it higher priority than in the past. Targets of investigation included individual businessmen, corrupt politicians, and such corporate activities as international business bribery, the manufacture of dangerous products, and environmental pollution. The renewed interest was motivated at least in part by the discovery of corruption and other illegal practices at the highest levels of government, and by a growing sensitivity to dangerous corporate practices. The growth in interest was great enough that it could be fairly labeled a social movement (Katz, 1980).

When the pace of scholarship on white-collar crime also revived, it became evident that the wide range of phenomena suggested by the concept had to be broken down into components. Attention had focused so much on the nature of the offender that actual criminal behavior had gone unexamined. It seemed to make little sense to include under a single rubric as diverse a set of activities as bank embezzlement, land swindles, price-fixing, fraudulent loan applications, and bribery. The first important shift away from the legacy of Sutherland was accomplished by taking the offense itself as the principal object of inquiry. In the first such effort, Herbert Edelhertz proposed to define white-collar crime as "an illegal act or series of illegal acts committed by nonphysical means and by concealment and guile, to obtain money or property, to avoid payment or loss of money or property, or to obtain business or personal advantage" (p. 3). A related shift is to search for behavioral patterns that characterize different types of white-collar crime. Susan Shapiro, for example, distinguishes fraud, self-dealing, and regulatory offenses (pp. 20–24), and Mitchell Rothman separates frauds, takings, and collusion.

The impulse that gives rise to typological efforts is the felt need to put order into the enormous range of behaviors at issue. The statutes that define white-collar crime, passed by legislatures for various purposes at various times, are a patchwork. Important as they may be for prosecution, the legal categories are of limited value for analytic purposes. A given statutory offense may include a wide array of actual behaviors; bank embezzlement, for example, may range from a simple theft by a bank teller to a complex fraudulent loan arranged by a trust officer. Essentially the same behavior may be punished under statutes as different as those governing mail and wire fraud, securities fraud, and false claims and statements. Typologies allow one to see some of the similarities between crimes as different as bribery and price-fixing, which share the element of collusive activity.

The underlying assumption of this type of analysis—still to be proved—is that parallels in behavior may suggest parallels in either the causal processes producing such behavior or in the methods of detection and enforcement brought to bear upon them. Such work is likely to be only partially successful until there is greater agreement on the core properties of white-collar crime. To the extent that the legal categories themselves are a function of concerns not reflected in the underlying conduct—a concern, for example, that the conduct be reachable by federal authorities, or that regulatory agencies can police it—typologies that concentrate on underlying conduct may be prematurely dismissive of the important role played by legal categorization itself.

From offense to organization and consequence. A second trend is to emphasize not behavior but its consequences. This trend rediscovers issues that occupied reformers at the turn of the twentieth century—a concern for the power of organizationsand the harms they commit. From the late nineteenth century on, harms caused by the production and sale of adulterated goods and similar activities were recognized as "strict liability" offenses—criminal acts not requiring proof of a guilty mind. Throughout the twentieth century these activities, and many others later recognized to pose a similar threat, came increasingly to be the subject of administrative regulation, which was seen as a wiser and more effective device for protecting the public interest. Regulation expanded as new dangers to health and to life itself were recognized—dangers to individuals posed by the air they breathed, the water they drank, the food and drugs they consumed, the automobiles and other products they used, and the places at which they worked.

Rediscovery of the power of organizations to inflict physical damage as well as economic injury has led some scholars to direct their attention to specifically organizational offenses. The central concern here is those actions taken by the officials or other agents of legitimate organizations that have a serious physical or economic impact on employees, consumers, or the general public (Schrager and Short). A growing number of analysts thus speak of organizations as offenders of "organizational deviance," and of illegalities committed through the organizational form. This is a response to a society in which organizations increasingly are major actors, and although it reflects experience in the United States, both the concept of white-collar crime and a concern with corporate and governmental offenses are found throughout the world.

The focus on organizational offenses brings with it enduring issues of law and policy. One is the question of the standard by which individual conduct is to be judged. Should organizations' executives be sanctioned for failure to supervise middle-level officials engaged in wrongdoing? Should strict liability be employed, as in some of the earlier public-welfare offenses? How should sanctions be distributed between organization and employees? When the focus is on the corporate body itself, there is the question of how best to protect against harmful corporate practices without stifling organizational innovation and creativity. For example, should unwanted conduct be deterred through increased penalties against the corporation? Or is it more effective to control wrongdoing by reaching inside the organization, either through rules governing production processes and information flow, or rules regarding the composition of the board of directors? The treatment of the offenses of organizations remains fraught with complex policy choices (Coffee; Kadish; Stone).

Finally, there is the issue that sparked the original debate over the concept of white-collar crime: Are these offenses administrative rule violations or "real" crimes? The most complete follow-up study to White Collar Crime defines its subject as any act, committed by a corporation, that is punishable by the state, whether through criminal, administrative, or civil law. The title of this study, Corporate Crime, while reflecting the shift to the corporate form as a primary focus of inquiry, maintains the view that such conduct be labeled criminal (Clinard and Yeager, p. 16). The corporate sanctions examined, however, are overwhelmingly civil or administrative. Thus, the matter of definition remains controversial some forty years after Sutherland's initial exploration of white-collar crime.