Analysis of Edwin Sutherland definition of white collar crime and with
levelled criticism
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Introduction
White collar crime can actually be defined in various ways, but generally
speaking, it is a crime of deceit motivated by financial gain. It's committed by
a person of high social status and respectability. It doesn't involve physical
violence, but the aftermath of its greed is devastating. Examples of white
collar crime include fraud, embezzlement and money laundering. White-
collar crimes are “characterized by deceit, concealment, or violation of trust
and are not dependent on the application or threat of physical force or
violence.” It is mostly executed by people with high social status and in
respectable positions, like business or government professionals. “With a
financial motive to obtain or avoid losing money, property, or services or to
secure a personal or business advantage.” Examples of such crimes can be
money laundering, fraud and embezzlement. Such crimes do not involve
physical violence but it could ruin millions of lives.
When a company goes through huge money loss they need to recover it in
some way. Since white-collar crimes were not violent in nature as compared
to conventional or traditional street crimes, the concept of white collar crimes
did not fit into the description of crimes to society. So these crimes were
widely accepted and considered as part of business tactics by shrewd
professionals or businessmen. Hence complaints against such crimes very
unheard and unpunished. It was Edwin H. Sutherland a 20th-century
professor and sociologist, who developed the concept of white collar crimes
in 1939 through the article “American Sociology Review”. He pointed out
that crimes were not just restricted to inner-city but also could be committed
by those who are well educated and in the higher status of the society. He
also goes on to compare such high-status offenders to lower class offenders.
Edwin Sutherland
Edwin Sutherland was a 20th century sociologist and professor, who received his
PhD in sociology in 1913 from the University of Chicago. Sutherland spent most of
his career teaching and developing theories of criminal behaviour. Sutherland was
the first person to study white collar crime, and to publish an article on it,
broadening the field of criminology to study more than just street crime. For
decades he studied the conduct of 70 major American corporations and 15 utility
companies. In 1939, he developed the phrase 'white collar crime'.
Sutherland offered a formal definition of white collar crimes as “a crime
committed by a person of high social status and respectability in the course of
his occupation.” This definition also includes crimes committed by
corporations and other legal entities. He wanted to make sure justice was
served no matter what your social status is because earlier these elite
criminals could get away with anything using their power. This gave a wider
scope to existing theories about crime and challenged many conventional
theories.
His life
Edwin H. Sutherland served as the 29th President of the American
Sociological Society. His Presidential Address, "White-Collar Criminality,"
was delivered at the organization's annual meeting in Philadelphia in
December 1939. To most teachers and students of sociology, Edwin
Sutherland is known as a distinguished criminologist, the author of scholarly
books and articles. Edwin H. Sutherland died at Bloomington, Indiana, on
October 12, 1950. Just a few weeks before this he had attended the meeting
of the American Sociological Society in Denver.
White Collar Crime Defined
Edwin Sutherland's development of differential association theory in 1947
marked a watershed in criminology. The theory, which dominated the
discipline for decades, brought Chicago-style sociology to the forefront of
criminology. It is well known that differential association explains individual
criminality with a social psychological process of learning crime within
interaction with social groups. Less well known is Sutherland's attempt to
explain aggregate crime rates across groups and societies. Here, he specified
the theory of differential social organization to explain rates of crime with an
organizational process that implies group dynamics. This entry reviews
Sutherland's theory of differential association, discusses attempts at revision,
and assesses the empirical status of the theory. It also examines recent
attempts to revisit and elaborate the concept of differential social
organization as well as current areas of research in which it is being used.
The typical profile of a white-collar criminal includes the following
attributes;
• The person has high social status and considerable influence,
enjoying respect and trust, and belongs to the elite in society.
• The elite have generally more knowledge, money and prestige, and
occupy higher positions than other individuals in the population
occupy.
• Privileges and authority held by the elite are often not visible or
transparent, but known to everybody.
• Elite members are active in business, public administration, politics,
congregations, and many other sectors in society.
• The elite is a minority that behaves as an authority towards others in
the majority.
• The person is often wealthy and does not really need the proceeds of
crime to live a good life.
• The person is typically well educated and connects to important
networks of partners and friends.
• The person exploits his or her position to commit financial crime.
• The person does not look at himself or herself as a criminal , but
rather as a community builder who applies personal rules for his or
her own behavior.
• The person may be in a position that makes the police reluctant to
initiate a crime investigation.
• The person has access to resources that enable involvement of top
defense attorneys, and can behave in court in a manner that creates
sympathy among the public, partly because the defendant belongs to
the upper class, often a similar class to that of the judge, the
prosecutor, and the attorney.
Differential Association Theory
Sutherland stated differential association theory as a set of nine propositions,
which introduced three concepts; normative conflict, differential association,
and differential group organization, that explain crime at the levels of the
society, the individual, and the group.
Occupational and Business Crime
A distinction in white-collar offenses can be made between occupational
crime and business crime. Occupational crime is committed by persons in an
organizational setting for purely personal gain and to the detriment of the
organization. Business crime is committed by or on behalf of the organization
for profit or enhancement. Of course, in business crime organizations cannot
commit illegal acts independently of human agents.
Occupational crime is typically committed under conditions of low levels of
socialization and weak accountability. Employees may be unfamiliar with
organizational goals or simply ignore organizational goals, while at the same
time exerting efforts toward personal goals due to weak restraints by the
accountability system. The presence of occupational crime may be
symptomatic of larger failures in an organization’s system since an
organization without committed and accountable employees suggests a
higher likelihood of failing in the end. Occupational crime tends to be
committed by privileged individuals who feel no attachment to the
organization, and who do so purely for personal gain.
Business crime, on the other hand, is typically committed under conditions of
high levels of socialization and strong accountability. Employees not only
identify with the organization but also its goals. The pursuit of organizational
goals over individual goals does not imply the absence of crime. Rather,
achievement of organizational goals becomes so important that if it cannot be
done in legal ways, dedicated employees do it in illegal ways.
Both occupational and business crime is committed within the organizational
context. Corporate crime is committed for business advantage and examples
include cartels and corruption. Illegal price fixing and market sharing occur
in cartels to enable participants in cartels to achieve more profits. Bribes are
offered to potential customers, allies, and public officials to enable contracts
and licenses.
Normative Conflict: The Root Cause of Crime in Society
At the societal level, crime is rooted in normative conflict. For Sutherland,
primitive, undifferentiated societies are characterized by harmony, solidarity,
and consensus over basic values and beliefs. Such societies have little
conflict over appropriate behaviors and, consequently, little crime. With the
industrial revolution, however, societies developed advanced divisions of
labor, market economies, and a breakdown in consensus. Such societies
become segmented into groups that conflict over interests, values, and
behavior patterns. These societies are characterized by specialization rather
than similarity, coercion rather than harmony, conflict rather than consensus.
They tend to have high rates of crime. Sutherland hypothesized that high
crime rates are associated with normative conflict, which he defined as a
society segmented into groups that conflict over the appropriateness of the
law: some groups define the law as a set of rules to be followed under all
circumstances, while others define the law as a set of rules to be violated
under certain circumstances. Therefore, when normative conflict is absent in
a society, crime rates will be low; when normative conflict is high, societal
crime rates will be high. In this way, crime is ultimately rooted in normative
conflict, according to Sutherland and Donald Cressey.
Differential Association Process: Explanation of Individual Criminal
Acts
At the level of the individual, the process of differential association provides
a social psychological explanation of how normative conflict in society
translates into individual criminal acts. Accordingly, criminal behavior is
learned in a process of communication in intimate groups. The content of
learning includes two important elements. First the requisite skills and
techniques for committing crime, which can range from complicated,
specialized skills of computer fraud, insider trading, and confidence games,
to the simple, readily available skills of assault, purse snatching, and drunk
driving. Such techniques are necessary but insufficient to produce crime.
Second are definitions favorable and unfavorable to crime, which consist of
motives, verbalizations, or rationalizations that make crime justified or
unjustified, and include Gresham Sykes and David Matza's techniques of
neutralization. For example, definitions favorable to income tax fraud include
“Everyone cheats on their taxes” and “The government has no right to tax its
citizens.” Definitions favorable to drunk driving include “I can drive fine
after a few beers” and “I only have a couple of miles to drive home.”
Definitions favorable to violence include “If your manhood is threatened, you
have to fight back” and “To maintain respect, you can never back down from
a fight.”
These definitions favorable to crime help organize and justify a criminal line
of action in a particular situation. They are offset by definitions unfavorable
to crime, such as “Tax fraud deprives Americans of important programs that
benefit the commonwealth,” “All fraud and theft is immoral,” “If insulted,
turn the other cheek,” “Friends don't let friends drink and drive,” and “Any
violation of the law is wrong.” These examples illustrate several points about
definitions of crime. First, some definitions pertain to specific offenses only,
such as “Friends don't let friends drink and drive,” whereas others refer to a
class of offenses, such as “All fraud and theft is immoral,” and others refer to
virtually all law violation, such as “Any violation of the law is wrong.”
Second, each definition serves to justify or motivate either committing
criminal acts or refraining from criminal acts. Third, these definitions are not
merely ex-post facto rationalisations of crime but rather operate to cause
criminal behaviour.
Sutherland recognized that definitions favorable to crime can be offset by
definitions unfavorable to crime and, therefore, hypothesized that criminal
behavior is determined by the ratio of definitions favorable to crime versus
unfavorable to crime. Furthermore, he recognized that definitions are not all
equal. Definitions that are presented more frequently, for a longer duration,
earlier in one's life, and in more intense relationships receive more weight in
the process producing crime.
The individual-level hypothesis of differential association theory can now be
stated. According to Matsueda, a person will engage in criminal behavior if
the following three conditions are met:
• The person has learned the requisite skills and techniques for
committing crime.
• The person has learned an excess of definitions favorable to crime
over unfavorable to crime.
• The person has the objective opportunity to carry out the crime.
According to Sutherland, if all three conditions are present and crime does
not occur, or a crime occurs in the absence of all three conditions, the theory
would be wrong and in need of revision. Thus, in principle, the theory is
falsifiable. The process of differential association with definitions favorable
and unfavorable to crime is structured by the broader social organization in
which individuals are embedded. This includes the structures and
organization of families, neighborhoods, schools, and labor markets. This
organization is captured by the concept of differential social organization.
Differential Social Organization Explanation of Group Rates of Crime
At the level of the group, differential social organization provides an
organizational explanation of how normative conflict in society translates
into specific group rates of crime. According to differential social
organization, the crime rate of a group is determined by the extent to which
that group is organized against crime versus organized in favor of crime. In
industrialized societies, the two forms of organization exist side by side—and
indeed are sometimes interwoven in complex ways, such as when police take
bribes and participate in organized extortion, or baseball players take steroids
in full view of teammates. Sutherland hypothesized that the relative strength
of organization in favor of crime versus organization against crime explains
the crime rate of any group or society. Thus, compared to suburban
neighborhoods, inner- city neighborhoods are weakly organized against street
crimes and strongly organized in favor of such crimes. Compared to other
groups, the Mafia is strongly organized in favor of crime and weakly
organized against crime. Compared to the United States, Japan is strongly
organized against crime and weakly organized in favor of crime.
Moreover, the group-level process of differential social organization is linked
to the individual-level process of differential association. Groups that are
strongly organized in favor of crime display numerous and intense definitions
favorable to crime. Conversely, groups that are strongly organized against
crime display numerous and intense definitions unfavorable to crime.
Matsueda suggests that it follows that differential social organization
explains group crimes rate by influencing the availability of definitions
favorable and unfavorable to crime within the group. When groups are
strongly organized in favor of crime and weakly organized against crime,
they will present an abundance of definitions favorable to crime and few
definitions unfavorable to crime. Individuals in such groups have a high and
exposed to the few anti-criminal definitions in the community. Those
residents will refrain from crime because of an excess of definitions
unfavorable to crime. The opposite also holds. In low-crime communities,
some residents are exposed to the few criminal definitions in the community,
and isolated from the abundant anti-criminal definitions. Given the
opportunity and skills, they will engage in crime because of an excess of
definitions favorable to crime.
Criticism
Sutherland’s definition of white collar Crime has evoked criticism from
certain quarters. Coleman and Moynihan pointed out that the lack of definite
criteria for determining who are ‘persons of respectability and status’ has
made Sutherland’s definition of white collar crime most controversial. It
seems likely that what Sutherland meant by this is absence from convictions
for crimes other than white collar crimes. The element of ‘high social status’
as used in the definition also leads to confusion: Clearly it has far narrower
meaning than is given to that term in everyday usage.
Sutherland himself did not stick to this meaning and included thefts and
frauds committed by middle or even lower middle-class workers in course of
their employment or work. Some critics have suggested that such crimes
should have been called as ‘occupational crimes’ instead of being termed as
‘white collar crime’. It is further argued that in fact the important element in
the definition of white collar crime is not the socio-economic status of the
individual, but rather the type of crime and the circumstances of its
commission. These usually include pilfering, false accounting, bribery,
embezzlement etc.
Tax-evasion is not an authentic white collar crime, at least in terms of
Sutherland’s definition because although associated with work, it is not
committed in the course of an occupation. Some critics further allege that
such violations come within the purview of the Special Commissions,
Tribunals and Boards instead of normal criminal justice administrators.
Sutherland, however, justifies the special procedure of trial for white collar
criminals by administrative agencies on the ground that it would protect the
offender from the stigma of criminal prosecution.
Another criticism quite often advanced against Sutherland’s definition of
white collar crime is that it includes even those violations of law which are
not committed in course of occupation or profession and these violations do
not necessarily belong to upper strata of society or the so-called ‘prestigeous
groups’. For example, tax evasion is not committed only by persons of high
status but it can be committed by persons belonging to middle or even lower
strata of society.
Yet another objection against the definition of white collar crime is that it
does not necessarily require mens rea which is an essential ingredient of a
crime. The doctrine of mens rea based on common law has no application to
statutory offences in India and the requirement of guilty mind may be
excluded either expressly or by implication in such cases.
One of the drawbacks of his definition is that it does not include the crimes
outside an individual’s occupation like concealment of facts related to
personal assets, large-scale purchase on credit cards, false income tax returns
filed, deceitful claims to acquire benefits and social security etc. One of the
confusion related to his research was that white collar crime according to
Sutherland is a crime committed by a specific person and a specific type of
crime. Later it was verified that white-collar crimes are not of a specific type
rather it is crime committed by a specific type of person.
Sutherland contributed by challenging both the legal and criminal aspects in
his works. In his research he found that out of 980 decisions made against
mercantile and industrial corporations for unlawful actions. Only 158-161 of
these were criminal courts and could be considered as criminal acts. Even
most of the white collar crimes are in violation of penal laws they are mostly
handled by commissions or administrative tribunals. In the legal sense when
such crimes are handled by administrative tribunals there is no conviction of
the offender and he cannot be classified as a criminal.
Conclusion
Edwin Sutherland created the concept of white-collar crime more than 70
years ago to draw attention to the fact that crimes are committed by
individuals in all social classes. It is well known that Edwin Sutherland
(1940) introduced the concept of white collar crime in his 1939 American
Sociological Society address in Philadelphia. In the present context only two
observations need to be made. First, Sutherland has also been faulted with
having contributed to the long history of conceptual confusion in this realm
both because he defined white collar crime in somewhat different ways at
different points, and because these definitions themselves were intrinsically
problematic; second, Sutherland’s (1949) own major work on white collar
crime focused on the crimes of corporations.
White-collar crimes and related abuses are not adversaries that can
be targeted, met, attacked, and defeated once and for all. They are, rather,
forms of group behavior that can be expected to surface again and again in
response to new opportunities, or to avoid the loss of money, property,
markets, or personal advantages. Since total victory and perpetual safety are
not attainable, society’s general objective in this area should be to marshal
and deploy its public and private administrative, research, and law
enforcement resources to contain white-collar crime, that is, to deter, detect,
investigate, and prosecute (criminally and civilly) these crimes and related
abuses.
In reacting to white-collar crime challenges, we will have to
distinguish more carefully between socio-logical and economic impacts.
Doing so should help to set enforcement priorities and allocate resources. For
example, welfare frauds may be insignificant in economic terms as compared
to antitrust violations, but welfare programs are most vulnerable to attack
whenever frauds are exposed.
White Collar Crime types-
Sutherland offered a formal definition of white collar crimes as “a crime
committed by a person of high social status and respectability in the course of
his occupation.” This definition also includes crimes committed by
corporations and other legal entities. But due to urbanization and
industrialization in the late 19th century, lead to becoming huge breeding
grounds for corruption. Suthereland’s found it hard to give a clear and
consistent interpretation of his definition, which is limited to a person of a
particular social status. He emphasized on the position and trust of the
offender of such crimes in occupational settings. He maintained that political
graft, embezzlements, fee-splitting, illegal abortions were all slices of white-
collar crime. Such crimes have been exposed various times in different forms
as economic, political, commercial and financial activities.
Sutherland’s White Collar Criminality does leave a number of questions
unanswered, many of which remain unresolved to this day. Although,
scenario of the world and international laws have been changed time to time
hence it is indispensable to contemplate Sutherland’s White Collar
Criminality definition.
Sanjay Sarraf
05/05/2021
