Production of Corporate Crime in Corporate Capitalism (From White-Collar and Economic Crime, P 157-170, 1982, Peter Wickman and Timothy Dailey, ed. - See NCJ-82224)

• NCJ Number: 82231
• Author(s): H C Barnett
• Date Published: 1982
• Length: 14 pages
• Sale Source: Lexington Books
• Language: English
• Country: United States of America
• Note: An expanded version appears in Crime and Delinquency, V 27, N 1 (January 1981).

Annotation

How the political-economic structure of U.S. corporate capitalism has reproduced corporate crime is discussed, and changes in law and enforcement that could reduce the extent of such crime are suggested.

Abstract

Corporate crime occurs when management chooses to circumvent market constraints prohibited by the state. The incentive for businesses to illegally circumvent market constraints is increased profits which outweigh the possible costs of the illegal action. When illegal circumventions of the market continue to be profitable, corporate crime is reproduced, and the costs are borne by labor, consumers, investors, taxpayers, or other corporations. Corporate crime can also have detrimental effects on the efficiency and stability of economic and political institutions. Legal constraint on corporate crime must be severe enough to deter the crime and maintain the legitimacy of the state, while not being so severe as to diminish substantially the contribution of large corporations to growth in output and employment. More severe sanctions could constrain the growth in manufacturing, environmental, and labor violations, but they may not solve the problems associated with the illegal exercise of market power by firms in oligopolistic industries. Corporate dismemberments may reduce productive efficiency and financial stability while not significantly altering the degree of effective competition. Should this be true, limitations on the exercise of market power might better be implemented by requiring greater public representation on boards of directors and greater public oversight of managerial decisionmaking. Increased enforcement and increased public involvement in corporate decisionmaking both presuppose a greater public or government access to corporate data. Reliable data are necessary to determine the existence of an offense and to determine the corporate and social costs of compliance with legal requirements. Eleven references and seven notes are provided.