Is Street Crime More Harmful than White Collar Crime? By general definition, a crime is a wronging, proclaimed by law against society. All acts of disobeying the law are crimes. Be it an assault or embezzlement one has committed a wrong. Yet, we have learned values and morals from our surroundings which gave us concepts of the degree of harm pertaining to a particular crime. From our being submerged in a culture, our concept of crime is usually that of a physical one. We as a society, generally conjure images of a personal assault on oneself when defining the concept of a crime. Very rarely would ones first connotation of crime be of an executive of a large firm stealing money from the business. We as a society, generally define our concepts by our surroundings. Society is more frequently exposed to street crimes though televisions show like Cops. It is very rare that a day goes by that we do not learn a murder, physical attack or robbery through the media. Those so called street crimes affect our neighborhoods and society everyday. Those crimes are contributing to the destruction of society, our cities and our streets. The street crime is the most harmful of crimes in the eye of the typical American; the overall feeling is that street crime is responsible for the disintegration of society as we know it. To demonstrate the harm caused by society by street crime, one has to look no further than to inner city neighborhoods. Street crimes are responsible for injuries, death, sexual assaults and the loss of personal property through force. They can also be attributed to the decline of local business and the drop in education and pride in ones communities as well. In the lower economic neighborhoods, many resort to crime for financial reasons. Members of the community sell drugs or rob as means of support. These deviants do not inflict these crimes on neighborhoods other than their own. The members of society through their illegal actions are destroying society. Due to an increase in street crime, businesses close early and people avoid being on the streets. This allows the deviant, liberal opportunity to break the law. However, white-collar crime also directly affects society, perhaps at a greater cost than street crime. While the predatory deviant victimizes society both directly and indirectly, the same can be said for the corporate scandal. Direct victimization is the personal attack, be it a robbery assault or extortion, individuals in society will react. People live in constant fear of being a victim of crime; yet usually trust the CEO of a company such as Kenneth Lay. This individual fear can lead to indirect victimization, that on society as a whole. This is evident in a neighborhoods loss of economic development and criminal deviants become the role model for the younger members of society due to their appearance as a figure of wealth and power. These street crimes lead to the downward spiral of society economically and morally. Another aspect of how street crime ruins society is that the act is usually committed within the society itself. Most street crimes are committed by deviants to the members of their own neighborhoods. This is due to the closeness of their potential victims. This is why neighborhoods which characteristically generate the cause of deviant behavior generally have a higher rate of crime occurring within them. While all crimes are a wrong committed against society, some do more damage to society then others. Street crimes are perhaps the most harmful to society, caused by the deviant criminal behavior on ones own neighborhood, this causes its destruction. Street crime has caused the legal economical, educational and moral declines in many neighborhoods. Violent street crime is not only a wrong against an individual of society but an act in the crumbling of society itself.
While it is important to understand the extremely local toll street crime causes, let us examine the affects corporate crimes have on a community, specifically Weirton. Before the development of Weirton Steel as an ESOP, the community was faced with potentially huge layoffs and the possibility of complete demise of a town. The town thrived on its steel production; steel production was the heartbeat of the town. After the employees agreed to a 20% pay cut, appointed board members and elected a new union leader, the town viewed this as a positive step. Still, years later, is the community in better shape than it was 15 years ago? The significant effect white collar crime has on a community can not be identified as easily as street crimes. The problems are more deeply rooted than that of a simple assault; this is especially true for an ESOP. While Arthur Anderson looked the other way, board members and management was using company funds for personal gain. Also, contracts were provided because of relationships and not based upon what was best for the company. Even while I write this (and my argument is that this type of crime is equal if not worse) I have trouble accepting white collar crime as a more powerful crime, yet I know it is. The community has been affected on a number of levels. First, the obvious overall problem the community faces is the direct effect of the older demographic that does not have a solid retirement. While the generations of employees have relied upon the retirement plans set forth by the company, the current retirees were planning on retiring on the stock option that was available to them at the time Weirton became an ESOP. Smith quoted the stock at $0.06 a share, certainly not enough to live comfortable. Yet, the board, auditors and management is living comfortable after selling stock early and voting to give themselves generous retirement packages. Second is the sociological problem. For families who may have only known the steel industry, what does one do? While the board members are moving on to bigger (and sometimes better (Carnegie Library)) jobs, thousands of families are in third and fourth generation steel workers. These families, as Mark Glyptis, President of Independent Steelworkers Union stated, are very proud of what they do and seemingly love the business.
While we examine the Weirton example the question is who is to blame? Certainly most will point the finger towards Bob Loughhead, some may say the board as a whole, while other may suggest the union and workers needed to be more involved. These are probably all true. By all means Bob Loughhead, according to the writings of Phillip Smith must hold significant responsibility for the misdoings. However, I believe it was the boards responsibility to oversee everything. A good example of how this was let go can be seen with the Glaser report. Smith argues:
“I was to ask Herb for a copy of the Glaser report, which I did. For some time I received no reply. In November, I wrote again asking for a copy, and also included in my letter a request for a copy of the the UEC (United Engineers and Consultants) study on the Bricmont furnaces. I received no response from Herb. Then, on the evening before the November board meeting, as we were going into the dining room for dinner, Board Secretary Bill Kiefer handed me a manila envelope. He cryptically said that this was in response to my request to the chairman.”
This type of behavior, while Smith may argue is how things needed to be done, is not acceptable by the board. Smith argues how the board (or more specific Board members) was “left out” of major decisions, yet he refuses to see the importance of his role. He did ask questions, but were they enough? Blame can also be along to the Union. It is the responsibility of the Union reps, Mark Glyptis, to investigate. While I refuse to accept the “he was worse” role that both of these gentleman have taken, I also don’t believe they were the leading problem. Again, it is the way our society has structured itself that leads to these problems.
A clear problem has emerged with corporate scandals. Is capitalism to blame, is personal greed to blame or are the masses really run by a select few? Charles Smith wrote in his recent New York Times article:
California Gov. Gray Davis stated that Enron and the Bush administration were to blame for the Golden State's electricity crisis.
"I inherited the energy deregulation scheme which put all of us at the mercy of the big energy producers. We got no help from the federal government. In fact, when I was fighting Enron and the other energy companies, these same companies were sitting down with Vice President [Dick] Cheney to draft a national energy strategy," stated Davis.
However, Davis is playing fast and loose with the real facts of his relationship with Enron. For example, according to the Sacramento Bee, Davis has received $119,500 in campaign donations from Enron, including $42,500 since becoming governor. Davis openly stated that he would not return the Enron money.
Just as Phillip Smith and Mark Glyptis did at Weirton, many people would view this as wrongdoings, yet will not act. It has come to be understood that business comes before everything else in America. If the crime is white-collar and the actor is educated or holds a major position, people tend to simply shrug their shoulders. Corporate activity and the ethical base on which it is founded to inform boards has major flaws. Companies and Board Members must be held accountable not only for their specific actions, but also for the ethics underlying those actions. Investors need to reward public companies with support in the stock market rather than abandon those not posting consistently positive quarterly results, or posting misleading or deceitful quarterly reports. Greater transparency and commitment to the bottom line can assist in educating investors and boards as a whole, as can assessment of possible alternatives on a “what if” basis. The cost of avoidance of damage nearly always is less than its repair. This cannot be anymore clear than the current happenings in Weirton Steel. The retirement fund is in government bailout, and the threat of closer is once again very real. When the simple outsider looks at what has gone on in Weirton Steel for the past 10years, it is difficult to put together a convincingly positive cost-benefit analysis.
The significance of the Weirton saga is best understood in the context of debates over worker ownership and participation, and class in America. For most of American history worker ownership has encompassed everything from counterculture cooperatives, to corporate-initiated profit-sharing plans, to radical calls for economic democracy. Since the mid-nineteenth century political elites have tried to claim worker ownership as a “solution” to problems of productivity and the growing antagonism and conflict between capitol and labor. In wresting the issue away from labor, political elites upheld a version of worker ownership that has focused on equality rather than control. Simply, this version of worker ownership sees workers as consumers and bases its appeal on financial incentives (primarily, stock ownership or some form of profit sharing) to bring labor and management together under one roof to improve productivity, quality and overall company performance. The result of the “Board Betrayal” shows how workers interpret worker ownership and what they claim as their legitimate sphere of control is shaped by more than economic rationality or their position in the workplace. Looking at how workers reason over issues of control, could Weirton ever have changed? Will it be able to today? If you ask Mark Glyptis he may tell you Weirton Steel is headed in the right direction (as he did when he visited), however based upon the above argument it is my opinion Weirton Steel is headed for disaster, no matter how many government bailouts they receive.
Capitalism has proved to be the strongest economic system in the world; however it does not come without cost. The costs for corporate America seem fairly clear. From the arguments listed above, and more specifically the Weirton Steel example, it is apparent who the losers are…the working class. Our society continues to struggle with separation of class, and the result is nothing less than astounding. While corporate America labors with its new identity in the 21st century, the employees can only watch, wait and wonder; wonder what will become of a destroyed wealth. While our society seems focused upon localized crime, the leaders of major corporations are stealing the wealth of employees and gambling with the stabilization of a complete economic system. It seems only fitting that one of these leaders continues to profit from misconduct. Phillip Smith has named names; he has put his neck out; but for what? Has Mr. Smith offered any of the profits from his book to go to the people whom he help persecute? Has Mr. Smith offered suggestions on how things can change; or has he merely produced this book for personal gain? He does come out of the Weirton Steel saga looking better than most. It needs to be accepted that Phillip Smith played a large roll in the downfall, perhaps not as much as other actors, yet a roll nonetheless. Mr. Smith, after leaving Weirton Steel, continues to profit from the transgression that took place at Weirton Steel. Corporate America can only hope that other CEO’s and board members of corporations accused of wrongdoing can profit from unscrupulous behavior. I wonder when Kenneth Lay’s book will be out. Here’s a good title for a book: “How Tyco Robbed Kids so it’s CEO Could Own His Very Own Jet.” What do you think?
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Varano, Charles. Forced Choices: Class, Community, and Worker Ownership.