Why white-collar crimes are committed (criminology theory) - Essay Example

Edwin H. Sutherland coined the term "white-collar crime" in 1940 and his theory states that white-collar crime occurs because of exposure to other white-collar criminals, called the Differential Association Theory. This holds true today, although theories of criminology have been broadened and made more complex due to the advent of new technologies that enable new kinds of white-collar crime. Still, Sutherland's theory seems to make the most sense in terms of why white-collar crime has become so prevalent.

The simple pain vs. pleasure theory also applies, to a point. White-collar crime is often committed through a systematic deployment of certain transactions, either personal or electronic, that shifts assets from one place to another (the white-collar criminal's hands). If we look at the more common views of white collar crime that have come to public attention in recent years, we can start with Ford Motors in the 1970's; three young women were killed in an accident involving a Ford Pinto; it was found that the gas tank feeder tube in the trunk was in a vulnerable position and prone to explode upon impact in a rear-end collision.

Ford saw that re-fitting the tubes would increase the production cost of each car by about eleven dollars, so the company refrained from making any changes for seven years; finally, Ford was forced to recall the cars (W. Sue Feinstein, 1996). This would be one profile of white-collar crime: negligence with the motivation to retain profits. In this case, the victims were the 500 or so people who died as a result of the defective gas feed tubes. In addition to the Differential Association theory is the Self Control Theory Of Delinquency, also applied to white-collar criminals.

Defined as "acts of force or fraud undertaken in pursuit of self interest" (Gottfredson and Hirschi, 1990, p. 15), one can see where the Ford crime fit within this theory, the corporation being the "self" in self-interest. A look at the famed S&L scandal in the 1980's is an example of how white-collar crime affects the economy. The basic chronology of events began when deregulation enabled S&L corporations to lend money to themselves. In 1980, the FDIC insurance was raised from $40,000 to $100,000.

While there were several factors that doomed the S&L industry, such as fixed interest rates on home loans and sudden inflation. The most notorious white-collar criminal involved in the S&L failures was Charles Keating of Lincoln Savings in Irvine, California. He allegedly duped customers into buying "junk bonds" and extracted $1 million from Lincoln Savings in anticipation of the company's collapse, which happened weeks later (Wikipedia). All convictions were later overturned through plea-bargaining and other legal maneuvers, and Keating maintained that the blame for the downfall of Lincoln Savings was with the government regulators and not his actions.

This act of white-collar crime fits the bill for both theories named above; Keating was acting in self-interest without regard for the well being of Lincoln or its customers. Of course, we cannot overlook Enron. The story is complex and frightening with the implications for the