White collar crime involves deceiving people, institutions, community or government for monetary gain (Von Lampe, 2008). Examples include; insider trading, money laundering, evasion of tax, corruption and embezzlement. White collar crime is nonviolent and mainly committed by people with high status in the community.
Impact of white collar and economic crime
According to Godson (2017), when money is lost in business through crimes such as money laundering and corruption, the company suffers the cost of regenerating the funds. A company, therefore, puts in place a mechanism for raising funds lost. As a result, business is subjected to increased cost, which leads to higher prices for consumers, decreased pay for employees or even retrenchment of staff. Crimes such as insider trading lead to loss of investor and stakeholders trust which results to the downfall of a company. A perfect example of how companies can fall as a result of insider trading is the United States in the 1980s.
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White collar and economic crimes lead to substandard and low-quality goods, commodities, equipment and facilities (Smith, 2017) . For example, corruption leads to the supply of substandard facilities in hospitals leading to improper health care system. Bribery also prevents efficient operations in government and the private sector. Tax evasion is the refusal to pay taxes to the government; it affects government expenditure and its ability to raise revenue thus poor or no development at all for its citizens ( Webley, Robben & Hessing,2010).
Crimes such as money laundering involve passing of dirty money through financial institutions such as banks and trying to use it as legitimate money, for example through the purchase of an asset. Such crime encourages theft and gives a bad reputation to the financial institutions involved. Insurance fraud consists in being dishonest and affects innocent people who insure through increased premiums (Smith, 2017) . A good example is a request for compensation through a staged accident. Some countries such as Pennsylvania treat insurance fraud a felony.
Why it is so difficult to measure the extent of white-collar crime
Most white collar crimes go unreported. The risk of reputation makes most companies not to report crimes committed such as tax evasion ( Geis, 2014). Companies fear the loss of clients if such crimes are reported within the institution. Top managers in a company fail to admit white collar crimes that happen in their businesses because they fear losing revenues. Improper law enforcement also leads to unreported white collar crimes. For example, policemen focus more on street crime as compared to white-collar ones. Prosecution of people involved in white collar crime is difficult and particularly when it affects a whole institution thus making it hard to report these crimes.
Kinds of economic crime that affect the whole country
Bribery, corruption and procurement fraud are economic crimes that affect everyone in a country. For example, inflated prices of commodities such as fuel lead to increased transportation and production costs thus affecting everyone in the country. Asset misappropriation and tax fraud lead to slow economic growth thus denying the majority of citizens rights to social amenities such as good transportation systems.
Ways in which victims facilitate white collar crime
Lack of proper legislation makes it easy for white collar crime to occur, For example, tax evasion crime is caused by government refusal to impose appropriate laws on mitigation ( Chamley, 2008) . Dishonesty and greed among individuals make it possible to commit crimes such as insurance fraud. Lack of ethical leadership from people with high ranks in institutions and government makes it easier to commit white collar crimes. Most people in authority are likely to be affected by economic crimes such as bribery compared to people at the bottom of the pyramid in a societal setup.
Ways that citizens can help protect themselves against white-collar crime
Condemning white collar crimes by citizens for example through peaceful demonstrations assists reduce the rate of crimes done. Electing ethical leaders to influential positions also helps in mitigating economic crimes. Conclusively, people in authority are a representation of the general public; therefore, citizens should practice good morals to ensure white collar and economic crimes come to an end.
References
Chamley, C. (2008). Optimal taxation of capital income in general equilibrium with infinite lives. Econometrica: Journal of the Econometric Society , 607-622.
Geis, G. (2014). White collar crime: The uncut version (Vol. 58). New Haven, CT: Yale University Press.
Godson, R. (2017). Menace to society: political-criminal collaboration around the world . Routledge.
Smith, K. (2017). White‐Collar Crime. The Wiley‐Blackwell Encyclopedia of Social Theory , 1-2.
Von Lampe, K. (2008). Organized crime in Europe: conceptions and realities. Policing: A Journal of Policy and Practice , 2 (1), 7-17.
Webley, P., Robben, H., Elffers, H., & Hessing, D. (2010). Tax evasion . Cambridge University Press.
