Crime and Punishment in American History - Lawrence M. Friedman [184]
Regulatory crimes are nonviolent; they are not street crimes. Some regulatory criminals are despicable and shadowy figures—the purveyors of quack medicines, for example—but others are members of the middle class, or may even come from the ranks of the rich and the powerful. This is, of course, more typical of finance crimes, rather than in crimes that rape the consumer. There are also violators in the upper ranks of corporations whose crimes are more lethal; who dump toxic wastes or hide the news that their products can kill people. Many acts become regulatory crimes, as we pointed out, for administrative reasons, rather than because that they involve “real” criminality—that is, what we define as evil, guilt, blameworthiness. But the line is hard to draw.
And getting harder. People in our times feel themselves dancing on the deck of a doomed ship. They hear that the air is poisoned, the water full of muck, resources shrinking, forests shriveling, the planet collapsing from consumer debauchery and wanton material waste. In this climate, some regulatory crimes—polluting water and air—get redefined as real crimes, as crimes against the human race. What started out as malum prohibitum ends up as malum in se.
White-Collar Crime
The sociologist Edwin Sutherland was apparently the first to coin the phrase “white-collar crime,” which was the title of his book that appeared in 1949.51 The phrase is hard to define precisely. It refers, at core, to “nonviolent, economic crimes that involve some level of fraud, collusion, or deception” committed by “persons in traditionally ‘white-collar’ jobs.”52 The first part of this definition is probably more reliable than the second; income tax fraud, for example, is on the usual list of white-collar crimes; but anybody with an income can commit it, including truck drivers, baseball players, and nurses.
White-collar offenses include, conventionally, some important regulatory crimes (price-fixing, violations of the Sherman Act, violations of the Securities and Exchange Act), along with such old and well-known crimes as embezzlement. Some white-collar crimes—various mail frauds and con games—are committed by individuals acting alone or with a henchman or two; some (embezzlement) are committed by individuals within organizations; some are crimes by organizations (price-fixing agreements between major corporations, for example).53
The first three decades of the twentieth century were not notable for enforcement of laws against white-collar criminals. The small-fry—embezzlers, counterfeiters, writers of bad checks—were prosecuted as before, and there was always some enforcement of laws against regulatory crimes. A few prosecutions of wealthy crooks did occur—stock manipulators, and so on—and there were spasms of trust-busting by the federal government. The Teapot Dome scandal, during the presidency of Warren Harding, produced some high-profile trials all the way to the threshhold of the White House.54bt But the business of America was business; there was a certain lack of zeal for punishing business behavior, even sharp and shady practices.
The stock market crash of 1929 was more than a financial shock. The prestige of Wall Street and big business also came tumbling down. One strand of the New Deal fed on popular disgust with “malefactors of great wealth.” The crash also resulted in some attempts to punish financial jugglers. Samuel Insull, a Chicago tycoon in the public utility business, was charged with mail fraud and embezzlement in October 1932. He was, however, acquitted at the trial, which took place in 1934. This acquittal apparently so outraged and disgusted Edwin Sutherland that it helped stimulate his work on white-collar crime.55 The Securities and Exchange Act, passed in 1934, created a whole new cluster of white-collar crimes. It also set up a mechanism, the Securities and Exchange Commission (SEC), which was responsible