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The Roots of Modern White-Collar Crime: Does the Modern Form of White-Collar Crime have its Foundation in the Transition from a Society Dominated by Agriculture to One Dominated by Industry?

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Abstract

The purpose of the present paper is to investigate whether the process of transition from an agricultural to an industrial society was a watershed for white-collar crime, such that this type of crime increased rapidly in connection with the industrialization process. The theoretical reasoning behind this notion is that the transition process promoted a mentality characterized by self-centered values and a culture of competitiveness, which together paved the way for fraud perpetrated at the expense of others. The data are from Statistic Sweden’s historical records and cover the period of 1864–1912. Since there is no way to measure all crimes that can be defined as white collar crime, we have used bankruptcy offences as an example of white collar crime. The results do not support the notion that the transition period from an agricultural to an industrial society showed an increase in bankruptcy offences. Instead, the results show that when fluctuations in the economy are taken into account, the industrialization process per se entailed less bankruptcy offences. On the other hand, other research using the case of Sweden has shown that it was first after World War II that bankruptcy offences increased rapidly. Our argument is that the transition process as a structural mechanism had a greater impact on bankruptcy offences when industrialized capitalism became advanced.

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Notes

  1. Sutherland (1949).

  2. Friedrichs (1996).

  3. Coleman (1987, 1998), Colley (2005), Locker and Godfrey (2006), Robb (1992, 2006), Schlegel and Weisburd (1994), Taylor (2005), and Wilson (2006).

  4. Shapiro (1984), Croall (1992), Gratzer and Stiefel (2008), Howard Davia et al. (2000).

  5. Magnusson (1996), Schön (2000).

  6. Magnusson and Ottosson (2003).

  7. Robb (1992, 2006).

  8. Coleman (1987).

  9. Ibid and Coleman (1998), Schlegel and Weisburd (1994).

  10. Locker and Godfrey (2006).

  11. This, of course, implies that we don’t catch all bankruptcy offences of the period. However, keeping in mind problems with historical data, using data on convicted crimes probably best catch the crime rate in the society. At least we know that these crimes have been committed. A weakness with the data is however, that convicted crime contains selection problems on the individual level. But since we are only interested in the amount of crime, and not who committed the crime, this is a minor problem. There is no reason to believe that the selection effects during our research period vary in such way that our analyses get spoiled (see note 22). Using reported bankruptcy offences would be an alternative.

  12. Edvinsson (2005).

  13. Magnusson (1996).

  14. Ibid.

  15. Magnusson (2000).

  16. Schön (2000).

  17. James (2001), Schön (2000).

  18. Coleman (1987, 1998), Locker and Godfrey (2006), Robb (1992, 2006), and Wilson (2006).

  19. Magnusson (2000).

  20. Gratzer (2001).

  21. Sutherland (1949).

  22. To a scholar, it looks like we take the position of a revisionist definition of white-collar crime (see Geis (2007). Formally this is true, we have no other data than data from penal law, but our choice of this particular section of the law points to the fact that such criminal behavior would not have been possible in occupations other than those involving rather free entrepreneurship.

  23. Gratzer (2001).

  24. This section of law has been constant in its intention, purpose and scope during the period of investigation, concentrated to fraudulent acts by the debtor of the creditor’s property or the debtors misuse in his trade activity of invested capital by the creditor. The modifications have over the period been concentrated to the strength of penalty (Sverige Rikes Lag chapt. 23 1–6 § 1911).

  25. Ryding (1888).

  26. The general profit ratio is measured by dividing the aggregated industrial gross surplus by the aggregated industrial net stock of produced assets. For more information, see Edvinsson (2005).

  27. The data are based on the calculation made by Ibid.

  28. Ibid.

  29. Our own calculations based on Edvinsson (2005).

  30. North (1990).

  31. Gratzer (2001).

  32. Ibid. Found that 53 percent of the variation in bankrupt offence could be explained by the variation in bankruptcy in general.

  33. Locker and Godfrey (2006), Robb (1992, 2006).

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  1. Department of Sociology, Umeå University, Umeå, Sweden

    Tage Alalehto & Daniel Larsson

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  1. Tage Alalehto
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  2. Daniel Larsson
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Correspondence to Tage Alalehto.

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Alalehto, T., Larsson, D. The Roots of Modern White-Collar Crime: Does the Modern Form of White-Collar Crime have its Foundation in the Transition from a Society Dominated by Agriculture to One Dominated by Industry?. Crit Crim 17, 183–193 (2009). https://doi.org/10.1007/s10612-009-9079-7

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