The criminality of the system


Corporate and White-Collar Crime

edited by John & Leonard Minkes


210 pages, $71.92(pb)

Despite the famous anarchist phrase "don't rob a bank, open one — it is legalised robbery", the capitalist world pretends there is a division between what corporations legally do and what they do illegally. So, there are books on the subject of corporate and white collar crime.

Managers, management, corporations, and CEOs commit very serious crimes against workers, animals, the environment, consumers, and the public.

In the current economic meltdown, the corporate media have been able to shift the public's mind towards bailouts and rescues. This is important because it lets those responsible off the hook.

The crisis also reveals how the system determines crime.

When your house has become next to worthless and you can't service your loan, "your bank" will sell the house off. If you stay in your house because you have nowhere else to go it is you who commits the crime.

But the system holds that huge payouts to the managers responsible for you losing your house are not a crime. A class-based legal system will make certain of that. Compliant lawmakers have always made sure some corporate crimes are not crimes at all.

On this, Minkes & Minkes' work provides an insightful look at corporate crimes. The book includes 10 chapters by 12 authors from the USA, Britain, Japan, Canada, and Israel. The lack of an Australian contribution does not indicate there is no corporate crime in Australia, (James Hardie Industries as just one example).

In their introduction, the editors outline the nature of corporate crime and the role it plays in so-called "organisations".

Organisation is the neutral-sounding term used by management writers to cloak the fact that these are profit-making companies.

The chapter by Steve Tombs highlights corporate crimes against health and safety. Tombs says many victims of corporate crimes are unlikely even to be aware any crime has taken place.

One of the first things management seeks is the famous blame-the-victim approach. Tombs provides a useful list of websites on the pathologies of corporations (, and ).

Laureen Snider's chapter on "Corporate Economic Crimes" highlights the cases of Barings, BCCI, Parmalat, Bre-X, and Enron. She concludes that there is little evidence that corporations have changed their corporate habits.

James Gobert's chapter on "The Evolving Legal Test of Corporate Criminal Liability" discusses the Corporate Manslaughter and Corporate Homicide Act 2007 in Britain.

He concludes the failure in bringing justice to corporations lies in the system itself. He fails to explore, however, that the system is set up to with limited corporate liabilities. Joel Bakan's book and documentary The Corporation — The Pathological Pursuit of Profit and Power shows this impressively.

Robert Allinson's chapter "The Foundation of Business Ethics" says that as greed is the foundation for business, it is difficult to avoid the urge to increase wealth by unethical or even by illegal means.

This statement, perhaps, hits the core of what so-called "business ethics" is all about.

Interestingly, Allinson quotes the godfather of economic rationalism, Adam Smith, who said no society can be flourishing and happy if the greater part of the members are poor and miserable.

In our present global society, vast numbers of people are miserable and poor — in relative and absolute terms. Meanwhile, the rest pretend to find happiness in consumerism.

The chapter by Omi Hatashin discusses "Crimes and Culture: Corporate Crimes and Criminal Justice in a Different Cultural Environment".

Hatashin looks at Japanese law and Japan's penal code. He makes us aware that corporate crime is not a cultural issue but part of the structure of capitalism and its modern excesses of managerialism.

Gerald Mars's chapter on "Rethinking Occupational Deviance and Crime in the Light of Globalisation" discusses how managers become cheats. He argues cheating simply provides the flexibility that makes many corporate organisations work.

He explains that, such practices are inherent to organisations rather than an anomaly. This is despite the fact that standard management textbooks tell students the exact opposite.

The final chapter of the book deals with "Getting Beyond the Moral Drama of Crime: What We Learn From Studying White-Collar Criminal Careers". It was Edwin Sutherland who coined the term "white collar crime" in 1939. Economic offences are committed through combinations of fraud, deception, or collusion.

David Weisburd, Elin Waring and Nicole Leeper Piquero discuss the difference between crime in the street and crime in the suite.

There is a reason why stealing a candy, a bar of chocolate or underpants is a crime and why the CEO of Union Carbide, responsible for the Bhopal gas leak that killed tens of thousands in India, retired peacefully in New England.

The highlight of the collection is Maurice Punch's "The Organisation Did It: Individuals, Corporations and Crime", which reveals that corporations can kill and managers can murder.

Managers tend to conform to the values of corporations and managerial group norms. Corporations are not the harmonious places that standard textbooks make them out to be.

Instead, managers are driven by a range of motives: competition, rivalry, power, status, market share, profits, quarterly returns, speed to market and innovation.

Looking at corporate crimes, the behaviour of managers, management, and capitalism, Punch concludes that the term "business ethics" is the ultimate oxymoron.

Overall, management shrouds unethical behaviour and corporate crimes in what Punch calls the Myth System. It consists of glossy brochures, mission statements, corporate outreach and philanthropy, ethical codes, trendy adverts, role-model executives, and an edifice of good corporate citizenship.

In reality management is about rivalry, schisms, factions, fiefdoms, back-stabbing, dirty politics, the manipulation of data, facades and charades, collusion between various actors, the lack of unanimity, and cohesion involving bribery and creative accounting.

Punch quotes a manager who describes the cynical informal code as: "The code is this: you milk the plants; rape the business; use other people and discard them; fuck any woman that is available, in sight, and under your control; and exercise executive prerogatives at will with subordinates and other lesser mortals."

It is not surprising that inside such a culture, corporate crime is rife. This is fertile ground for authoritarian behaviour from above, obedience and servility from below and, of course, devious rule-bending from management.

Punch backs all this up with plenty of case studies.

He concludes by stressing the closeness of management to corporate crime.

Zygmunt Bauman's masterpiece Modernity and the Holocaust (1989) would have strengthened one of the most decisive arguments of Punch's work.

According to Bauman, the uniqueness and scale of the Holocaust crime was only possible by applying modern management methods still taught today at every business school.

Overall however, the collection has three shortcomings: firstly, it does not analyse corporate crime inside a framework that links it to a political-legal system that is based on the same elements as corporations: the money and power code (Habermas).

Secondly, it fails to link corporate crimes to the corporate mass media. The media has no interest in pointing the finger at the system as such, because they are corporations themselves operating in exactly the same way and committing the same crimes.

Lastly, the book lacks a chapter that can assist those on the receiving end of corporate crimes to emancipate themselves from it. To do this, one needs to fundamentally question the system of corporations and also find ways to resist them.

In spite of this, Corporate and White Collar Crime still provides highly useful insights into the world of management, managerial behaviour, capitalism, and corporate crimes committed by managers, CEOs and company executives.

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