Analysis of Edwin Sutherland definition of white collar crime and with

levelled criticism ________________________________________________________________________

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