Vincenzo Ruggiero is Professor of Sociology at the University of Middlesex in London and at the University of Pisa in Italy. His latest book is Understanding Political Violence (Open University Press, 2006).

A user's guide to white-collar crime

Some classical works shape the logic, the rationale and the philosophy underlying liberalism and the notion of market freedom. They strive to rid the prevailing culture of the time from the traditional obstacles and the moral restrictions surrounding economic initiative and its development. Providing a theoretical behavioural framework that remains inescapable for entrepreneurial activity, they assign to those involved predictable and mutually-binding roles while encouraging – or proscribing – precise conducts to all.

Such a framework contains boundaries attempting to separate acceptable practices from unorthodox ones, thus indirectly formulating tentative definitions of crime and its control. Adam Smith and John Stuart Mill, though from different perspectives, discuss notions such as transgression, deviance, conventional criminality as well as élite criminality. In their writings, therefore, the echo can be detected of contemporary discussions around crimes committed by powerless as well as powerful individuals or groups. Both are concerned about the creation and acquisition of wealth, individual and collective behaviour in the marketplace, the legitimacy of certain conducts as opposed to others, and ultimately the circumstances in which competition and enterprise may cause human and social harm. When does freedom amount to crime?

In Adam Smith, justice is violated when individuals are injured as individuals, as members of a family, or as members and citizens of a state. Violations may undermine our natural rights, for example the right of liberi commercii, namely the right to exchange goods and services with those who are willing to deal with us. Those who hamper such a right violate what Smith terms iura perfecta, that is to say "rights that we have a title to demand and, if refused, to compel another to perform". Iura imperfecta, conversely, pertain to expectations, to duties which might be performed by others for our benefit, but to which we have no entitlement, nor can we compel others to perform. For example, beggars may be the objects of our charity and may be assumed to have a right to demand it, but we are not compelled to share our wealth with them.

Smith believes that the activities carried out within markets and the logic of economic initiative itself transform selfishness into its opposite: that is to say, regard and consideration for others. Thus, by being selfish within the rules of market relations, we are actually being good to our fellow human beings: private selfishness turns into public altruism. But are there cases in which external governance of "selfishness" is required? In the chapter "Delinquency" of his Lectures on Jurisprudence, the author clarifies his views. The initial distinction is made between damage produced by "wilful injury or the malice propense" of the offender, and damage caused by "faulty negligence or culpa".

It comes as no surprise, after much reasoning, that crimes committed by wealthy and powerful individuals and groups will fall under the rubric of offences resulting from faulty negligence rather than wilful injury. Smith could not have anticipated the future success of his formulations. A cursory look at the literature on white-collar and corporate crime reveals how frequently Smith's notions recur. It is noted that this type of crime is characterized by the relative invisibility of the victim, that it is of difficult detection, and that often it is not a mala in se (affecting "compulsory" rights) but simply a mala proibita (affecting "discretional" rights). White-collar and powerful offenders are said to escape detection and prosecution due to their wealth, status and authority – to their lack of an "offending mind" (mens rea) – and to act in the name of freedom. Interfering with their conduct amounts to limiting that freedom.

Even in what people do for pleasure, Mill complains, conformity is the rule, and choice is only exercised among "things commonly done". In this way, while refusing to follow their nature, people will soon discover that they have no nature to follow. The sad conclusion is that peculiarity of taste and eccentricity of conduct are shunned like crime. But what about the cases where peculiarity and eccentricity amount indeed to crime? "If anyone does an act hurtful to others, there is a prima facie case for punishing him by law or, where legal penalties are not safely applicable, by general disapprobation." Conducts causing harm to others, therefore, may escape formal punishment where statutory penalties are difficult to apply or are nonexistent. Using our contemporary vocabulary, we may suggest that conducts for which penalties can be "safely applicable" correspond to conventional criminal conducts, while those for which legal intervention is problematic fall in the domain of the economy, and correspond to unorthodox or illegitimate entrepreneurial practices. Mill appears to suggest, therefore, that the latter practices are punishable through mere general disapprobation.

There is a crucial part in Mill's argument, where the author discusses the variable liberty within a highly controversial commercial activity, namely the marketing of poisons. Here, he notes that authority control should not infringe on the liberty of producers or sellers, but on that of buyers. But even in this case, "the preventive function of government... is liable to be abused to the prejudice of liberty". Persons should just be warned of the dangerousness of what they're buying. In a clarifying example, Mill describes a person attempting to cross a bridge which has been ascertained to be unsafe. There is no time to warn the person of the danger, but she might be seized and turned back without any real infringement of her liberty, "for liberty consists in doing what one desires", and she does not desire to fall into the river. In other cases, the person may desire just that, and once warned of the danger, should be left free to make her choice. The conclusion stemming from this example might be that those in charge of the building of the bridge should be granted the freedom to make it unsafe. Potential victims, on the other hand, should be granted the freedom to voluntarily become victims, thus participating in the free entrepreneurial process.

Digging deeper into liberal thought, the nexus liberty-crime emerges more clearly as a crucial point of juncture where classical economics meets criminology. A recurring justification of corporate offending is that self-interest turns into collective interest, and that deviance is legitimate when no harm to others is caused: conducts affecting others are translated into conducts merely affecting those who adopt them. In this sense, one might suggest that harmful behaviour claims legitimacy when moral principles (defining our obligations and responsibilities to other people) are presented as ethical convictions (defining our individual choices). When this occurs, even crime may be perceived as an altruistic enterprise. Adam Smith and John Stuart Mill contribute to the creation of a horrified intimacy between "free individuals" and their diabolical counterparts: as Terry Eagleton would put it, between Faust and Mephistopheles, Ahab and Moby Dick, Leopold Bloom and Stephen Dedalus. As I would put it, they allude to a subtle affinity, a secret complicity, between entrepreneurs and delinquents, between freedom and crime.



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