“Behind every great fortune lies a great crime.” This maxim is attributed to 19th century man of letters Honoré de Balzac – the suggestion being that business activity of any kind is inherently corrupt and criminal.
This is something of an overstatement, an exaggeration even. In fact this exact aphorism, though widely attributed to Balzac, is actually a paraphrase of a passage from his 1835 novel Father Goriot: “The secret of a great success for which you are at a loss to account is a crime that has never been found out, because it was properly executed.”
Balzac’s actual words about wealth are more balanced and circumspect than the bastardised lore. But if you were to scan the FT and the business pages of media outlets in recent years you may conclude that the Bastardised Balzac on business is closer to the truth: rate-fixing scandals like Libor and currency exchange, institution-led money-laundering schemes for global crime and terror syndicates, tax avoidance, fraud and deception all occur on an industrial scale.
Given this apparent white-collar crime wave, it seems that the most logical way to analyse the activities of big business or finance is through thinking like criminologists. So could it be that business studies is in fact the new criminology?
The new wave of business studies
Back in the 1970s a generation of young academics set about challenging conventional wisdom in criminology. The result was the so-called new or radical criminology. These radicals believed that all groups and classes engage in crime but poorer groups are simply more likely to be labelled as criminals and prosecuted.
This class-focused approach to crime is all well and good, but it tends to overlook how businesses engage in criminality during their normal commercial activities. To avoid this, we need not so much another new form of criminology but a new business studies with a focus on criminal intent.
The starting point for this new form of business studies requires two things: understanding the criminal impact of institutions, and the victimhood of business activities.
The standard definition of crime is that it involves some form of behaviour that harms, or intends to harm, individuals or the public at large. When considering who is responsible for criminal harm, the justice system and public discussions about crime tend to be obsessed with the individual wrongdoer or offender. News reporting that demonises certain individuals as criminals actually humanises criminality. There is a fascination with what American criminologist Alexander Liazos famously called “nuts, sluts and perverts”.
As such, the reporting and analysis of crime tends to give scant attention to the bigger picture: how powerful business institutions engage in unethical, illegal and destructive behaviour. These activities get less attention, not so much because they take place under the radar, but because they are part and parcel of the normal, taken-for-granted processes and routines of the business world.
Effectively we need to dehumanise corporate crime. Blame the system – the structure of incentives, the regulatory framework (or lack of one), the nature of governance – not the “bad apple” banker.
Recognising the victims
The idea that crimes committed by businesses have no – or few – actual victims is a great fallacy. In part, this false impression is down to the fact that such crimes so rarely result in prosecutions. These crimes, especially those involving finance, are complex and not easily understood by judges, let alone juries. The perpetrators meanwhile are apparently respectable, institutions and individuals alike.
If we think of victimhood in the world of business crime, we have another clue as to why punishment does not always follow. These victims are not always directly visible or physically affected; often they are diffuse, distant and detached from those perpetrating the crime. Victims can be submerged in financial data and technical analysis. Reports on fraud or mis-selling are no match for the emotive language of nuts, sluts and perverts.
When victims like these it is all too easy to ignore the criminal. The result according to the UK’s former leading public prosecutor, Ken Macdonald, is that if you “mug someone in the street … you go to prison, but mug their savings … you can buy a yacht”. In other words: crime pays especially when the crime is business.
A call to arms
The logical conclusion is that academics should take on the mantle of crime fighters. More specifically, business and management academics should be at the forefront of this anti-crime initiative, for it is they who know where the dead bodies of white-collar crime are buried.
What I am suggesting is that we should make the switch from business to crime analysts. The change is necessary and it has been done in allied fields like journalism. To take one prominent example, former Rolling Stone reporter and political commentator Matt Taibbi started penning financial pieces in 2009. As Taibbi’s coverage of the American banking industry deepened, his financial journalism became crime stories and his modus operandi became that of a crime reporter.
Business academics could put their specialist knowledge and research skills in service of exposing crime: in effect we could become investigative social scientists, being willing to explore and reveal the true extent of business crime.
The question is whether we are willing to embrace this investigative rather than professional academic role. The professional and institutional pressures from our ivory prisons demand that we fall into line: that means producing peer-reviewed publications that offer only a glancing nod to what matters socially and politically. Meanwhile, the true extent of business criminality goes criminally under-reported.