Is 'White Collar Crime' Crime? — Study Notes (Sutherland, 1944)
Context and central question
Sutherland analyzes whether crimes committed by business and professional elites (white collar crimes) should be understood within theories of criminal behavior.
He bases conclusions on an empirical review of court and commission decisions against seventy large U.S. corporations under four types of laws: antitrust, false advertising, National Labor Relations, and infringement of patents, copyrights, and trademarks.
Findings: 547 adverse decisions across these corporations, averaging 7.8 decisions per corporation, with each corporation facing at least 1.2 such decisions.
Of these decisions, only 49 (approximately 9\%) were made by criminal courts, thereby explicitly declaring the behavior criminal. The remaining 498 decisions were not definitively criminal in the traditional sense, raising questions about the legal definition of crime and why criminologists have not treated white collar crime as cognate with other crime.
Core methodological problem: how to apply the term "crime" to decisions where behavior was unlawful, but the decision was not rendered by a criminal court.
Core legal criteria for defining crime (as discussed by Hall and others)
Two abstract criteria are generally required to define crime:
(i) Legal description of an act as socially injurious.
(ii) Legal provision of a penalty for the act.
When applied to the 547 decisions, all are described in statutes using terms such as "crime" or "misdemeanor," or, for other laws, "unfair," "discrimination," or "infringement."
Injured parties fall into two groups:
(a) A relatively small number in the same occupation or related occupations.
(b) The general public as consumers or members of social institutions affected by the violations.
Four laws:
Antitrust: designed to protect competitors, free competition, consumers, and democracy against monopolies.
False advertising: protects competitors and consumers against fraud.
National Labor Relations Law: protects employees from employer coercion and the public from disruption of commerce due to strikes/lockouts.
Infringement (patents/copyrights/trademarks): protects owners of IP rights and institutions that promote science and useful arts.
Each law provides a penal sanction, meaning violations are, in principle, punishable. Most adverse decisions under these four laws are treated as crimes, with some specific caveats for infringement cases discussed later.
The four laws and their rationale
Sherman Antitrust Act (antitrust): Violation is a misdemeanor. Designed to regulate competition, protect consumers, and preserve democratic institutions against wealth concentration.
False advertising: Relates to common law fraud (e.g., false labels, false advertising as unfair competition). Protects competitors and consumers from deception. Enforcement via the Federal Trade Commission (FTC) with similar penal possibilities as antitrust.
National Labor Relations Law (NLRA): Designed to protect employees against coercion (e.g., yellow-dog contracts) and to safeguard public interests in commerce affected by labor actions. Violations are enforceable with penalties similar to criminal sanctions when pursued through boards and courts.
Infringement (patents/copyrights/trademarks): Aims to protect intellectual property rights and the institutions that promote science and arts. Violations are considered injuries to the rights holders. Penalties exist, such as fines, and for patents/copyrights/trademarks, some statutes allow enhanced damages (e.g., treble damages).
Across these laws, penalties include fines, imprisonment, and in some IP cases, potentially punitive and enhanced damages (e.g., triple damages). The logic links false advertising to fraud, infringements to larceny, and NLRA coercion to common-law prohibitions on restraints of freedom and extortion.
How penalties are defined and enforced under the Sherman Act (as a model)
Three enforcement mechanisms when a violation is proven:
(1) Criminal prosecution with fines or imprisonment.
(2) The Department of Justice (DOJ) and district attorneys may pursue injunctions and seek contempt for violations of these injunctions.
(3) Private parties may sue for damages, with trebled damages (three times actual damages) awarded to the injured party.
All three mechanisms rely on the notion that the legal system has determined that a crime was committed; thus, civil decisions and criminal prosecutions alike reflect criminal behavior.
The Sherman Act has been amended by the Federal Trade Commission Act, the Clayton Act, and others. Many amendments define violations as crimes, but most do not explicitly declare criminality; many violations could also be processed under the original Sherman Act.
The FTC’s enforcement uses two principal sanctions:
(i) A stipulation whereby a corporation agrees not to violate the law in the future (usually for minor or technical violations).
(ii) A cease-and-desist order; if violated, the Commission may apply to the court for an injunction (punishable as contempt).
The Wheeler-Lea Amendment (1938) established that an order of the FTC becomes "final" if not challenged within a statutory window. Thereafter, its violation may be punished by a civil fine. These interim procedures resemble probation in criminal cases and provide enforcement avenues short of criminal punishment. The core point is that unlawful acts are defined by penalties and procedures, not solely by punishment. Punishment can be procedural (e.g., contempt) or restorative (e.g., injunctions).
Consequently, many enforcement actions under these amendments are effectively treated as crimes, even if not labeled as such in every instance.
False advertising and NLRA enforcement specifics
False advertising:
(i) False labels under Pure Food and Drug Law (a misdemeanor, punishable by a fine).
(ii) False advertising generally under the FTC Act as unfair competition; cases fall under FTC procedures analogous to antitrust cases, with penalties akin to criminal penalties (fines, injunctions, etc.).
National Labor Relations Law (NLRA):
Defines unfair labor practices. NLRB decisions issue cease-and-desist orders. Violations may be enforced in court with contempt penalties.
All NLRA decisions in the sample set are treated as decisions where crimes were committed.
Infringement of patent, copyright, and trademark rights
Copyright/patent infringement: violations can be misdemeanors under those statutes, punishable by fines. However, no individual criminal cases against the seventy corporations were found in the sample for these specific misdemeanors.
Two IP cases did involve awards of enhanced damages (triple damages) and were counted as evidence of criminal behavior. This leaves 74 other infringement decisions classified as not conclusive of criminal behavior.
Nevertheless, 20 of these 74 cases contained evidence that could have supported a prima facie criminal case if approached from a criminal-law perspective.
The broader implication is that a substantial portion of IP infringements likely involved willful infringement, even if not ultimately prosecuted as crimes within the sample.
The role of “punishment” and the spectrum of penalties
Beyond fines and imprisonment, other penalties with a punitive effect include stipulations, desist orders, and injunctions (even when not formally labeled as punishments for contempt). These sanctions produce suffering and public shame, albeit in varying degrees. The suffering and public shame, though less severe than criminal conviction, are nonetheless real consequences.
A notable example of public shaming: colonial punishment of sewing a letter "T" on the thief’s clothing. This illustrates how the sequence of sanctions is arranged so that increasing severity corresponds to greater public exposure and stigma.
The consent decree is a notable device: corporations may agree to a decree without admitting guilt. Historically, some groups (e.g., meat packers in 1921) used consent decrees to avoid ongoing public confrontation and the associated stigma, though later opposition to the decree arose.
Overall conclusion about the 547 decisions
The analysis concludes that 473 of the 547 decisions indicate crimes were committed (i.e., treatable as criminal behavior under the defined criteria). The argument emphasizes that criminality was not as evident under conventional criminal-law procedures; these processes tended to blur or conceal criminality via specialized enforcement channels.
The differential implementation of the law, beginning with the Sherman Act, creates a stigma-avoidance dynamic: the law is used in ways that reduce the social stigma of crime for corporate violators.
The author notes potential criticisms: rules of proof and intent in non-criminal agencies may differ from standard criminal procedures; some enforcement bodies did not require proof of criminal intent or presumption of innocence in all cases. Yet, Hall’s work and related jurisprudence show that these exceptions exist in traditional criminal prosecutions as well (e.g., statutory offenses against which the same procedural rules are not always applied).
Ultimately, 473 decisions are treated as crimes. However, the stigma of crime can be minimized by procedural choices (e.g., civil procedures, injunctive relief, civil fines) and by the broader political and social context in which white-collar crime is prosecuted.
Differential implementation: three explanatory factors
Factor 1: Status of the businessperson and the political culture surrounding business
The enforcement system is influenced by the high status and reputation of business figures; legislators, judges, and administrators tend to fear antagonizing businessmen because of political and financial considerations (campaign contributions, influence, etc.).
Cultural homogeneity among decision-makers: lawmakers and judiciary often share a cultural alignment with businessmen, making it less likely they will view businessmen as criminals.
Evidence cited: Department of Justice actions (1890–1929) showed 438 actions under antitrust law; criminal prosecutions were 27\% against business firms versus 71\% against unions, indicating a relative reluctance to criminally prosecute firms.
The Great Depression period (beginning 1929) marks a shift toward stronger enforcement against business, reflecting a drop in business status and increasing willingness to pursue penalties.
Over the lifetime of the sample (roughly 40 years), 63\% of the 547 decisions occurred during 1935–1943, a period of particularly low status for business leaders.
In practice, while the FTC Act extends corporate liability to officers and directors, individual businesspeople are rarely convicted personally, with notable exceptions (e.g., about a 6\% case against auto manufacturers where corporate conviction occurred but directors were acquitted).
Interpretation: the high status of business individuals and the fear of political repercussions dampen the use of the criminal-penalty route against business.
Factor 2: Trend away from punitive penalties toward non-penal and rehabilitative methods
The enforcement trend toward less severe, non-penal instruments (probation, casework, civil fines) is stronger in white-collar crime due to:
The growing power and number of lower socio-economic groups, who resist harsh penalties.
Inclusion of more upper-class actors in regulatory regimes (e.g., traffic laws), fostering more lenient approaches.
Increased social interaction and sympathy across classes, leading to less punitive attitudes overall.
Diminished political support and influence for harsh penalties, alongside a weakened legal-professional culture that previously supported punitive control.
In the context of white-collar crime, this move away from the harshest penalties accelerates enforcement via civil remedies and administrative sanctions rather than traditional criminal punishment.
Factor 3: The relationship between law and mores (public ethics)
These laws are relatively recent and lack a firm public-ethics foundation; some business-ethics norms conflict with legal norms (e.g., contempt for a price chiseler vs. the law).
White-collar crimes are not always obvious like assault; they can be subtle and embedded in industry practice, understood only by experts, and may become accepted over time.
The continuum of mens rea (from mala in se to mala prohibita) is relevant. While some perceive white-collar violations as merely technical (mala prohibita), Sutherland emphasizes that many white-collar crimes carry moral implications and align with broad social condemnation, suggesting they are not solely technical regulatory infractions.
Public opinion, media, and moral legitimacy
Public sentiment toward white-collar crime is shaped by the level of public exposure and the perceived severity of the offense.
Modern urban attitudes toward crime are influenced by crime rates and descriptions in the media. However, media coverage is often controlled or influenced by the same groups that violate the laws, effectively weakening public moral condemnation.
The mores-law loop tends to reinforce itself: laws shape enforcement, and enforcement in turn reinforces societal norms. But with white-collar crime, the enforcement regime often dampens the stigma attached to crime.
Implications and important distinctions
The differential emphasis on stigma: the state may avoid labeling corporate violations as criminal to prevent stigma, even when a substantial body of evidence suggests criminal behavior.
The distinction between technical violations and moral culpability is often blurred in practice, especially given the breadth of actions captured under antitrust, false advertising, NLRA, and IP infringement.
The continuum of punishment and its social meaning is central: sanctions that avoid stigma can still have material penalties, but they may lessen social and moral condemnation, altering public perception of guilt.
Key quotes and conceptual anchors (paraphrased)
The Sherman Act and related amendments illustrate how civil procedures and private enforcement can functionally replace criminal stigma with financial penalties, while still serving punitive aims and deterring misconduct.
Wendell Berge’s plea underscores the possibility that civil penalties could substitute for criminal penalties while preserving effective deterrence, highlighting the central role of stigma in the criminal label.
Sutherland emphasizes that the stigma of crime becomes a social penalty in itself, and the state sometimes deliberately uses enforcement that minimizes this stigma to avoid political or economic backlash, affecting both corporate and individual offenders.
Foundational references and related scholarly context
Hall, Jerome: Prolegomena to a Science of Criminal Law; Interrelations of Criminal Law and Torts; Criminal Attempts—A Study of the Foundations of Criminal Liability. These works are cited as the most coherent sources for defining crime from a legal standpoint and understanding the relationship between criminal law and torts.
Livingston Hall (quoted/used to discuss statutory law and the role of intent and presumption of innocence in various offenses), providing a legal framework for the analysis.
The article situates itself within a larger debate about whether white-collar crime should be treated under traditional criminal law or as a distinct category of offenses that require different social-scientific explanations.
Numerical and statistical details (selected references)
Total adverse decisions against the seventy corporations: 547
Average per corporation: 7.8 decisions
Minimum per corporation: 1.2 decisions
Decisions by criminal courts: 49 (approximately 9\% of total)
Remaining decisions (potentially criminal or civil in nature): 498
Proportion of cases against business firms prosecuted criminally (DOJ actions, 1890–1929): 27\%; against unions: 71\% (reflecting differential enforcement).
Period with most decisions: 63\% of the 547 decisions occurred during 1935–1943, a period of reduced status for business leaders.
Specific IP infringement outcomes: 3 cases with enhanced damages (and one under copyright) were counted as evidence of criminal behavior; overall, 74 IP infringement decisions were not classified as conclusive evidence of crime, but 20 of these had prima facie evidence of criminality that could have led to criminal prosecution.
The automobile case example: a single case where the corporation was convicted but the individual directors were acquitted, representing about 6\% of similar automobile cases, highlighting the difficulty of individual conviction.
Summary takeaways for exam-ready understanding
White-collar crimes are analyzed as crimes through a lens that emphasizes statutory penalties and diverse enforcement mechanisms, not solely traditional criminal court verdicts, as only 9\% of decisions were from criminal courts initially.
The four modern legal regimes (antitrust, false advertising, NLRA, IP infringement) are designed to protect competition, consumers, employees, and IP rights. Each regime provides legal penalties and enforcement channels that can classify actions as crimes, even if labels differ.
The enforcement structure for white-collar crimes often relies on civil or administrative procedures (e.g., injunctions, stipulations, cease-and-desist orders, civil fines) that reduce stigma and may substitute civil fines for criminal penalties, thereby redefining what counts as crime in practice.
Three factors explain why white-collar violations often receive different treatment than other crimes: (i) the high status and political influence of business elites and cultural alignment with decision-makers; (ii) a societal trend away from punitive penalties in favor of non-penal, rehabilitative approaches, particularly affecting upper-class offenders; (iii) weaker public mobilization against white-collar criminals due to the subtlety of offenses, conflicting mores, and media influence/capture.
The moral and practical implications are nuanced: while many white-collar offenses involve significant social harm, the stigma of crime can be intentionally moderated to avoid political and economic pushback, potentially diluting the deterrent effect of criminal labeling. Nevertheless, Sutherland maintains that these offenses lie on a continuum with other crime and should be understood within criminology, even if the formal labels and proceedings differ.
Connections to broader themes and prior lectures
The discussion connects formal legal definitions of crime to sociological concepts of stigma, public ethics, and the social construction of deviance.
It illustrates how legal institutions shape social perceptions of crime and suggests that the true criminality of corporate actions may be obscured by procedural design and political economy.
It situates white-collar crime within a continuum of punishment and emphasizes the role of mores in legitimating or delegitimating criminal labels.
Mathematical and symbolic references (LaTeX)
Treble damages in civil suits: 3 \times \text{damages}
Proportions and counts in the study: 547, 7.8, 1.2, 49, 9\% (for criminal court decisions), 473 (total crimes identified by Sutherland), 74 (IP decisions not conclusive), 20 (IP decisions with prima facie evidence), 63\% (decisions during 1935–1943), 6\% (automobile case conviction rate for directors), 27\% (criminal prosecutions against business firms by DOJ), 71\% (criminal prosecutions against unions by DOJ).
Penalty sequence and comparison to contempt: injunctions, consent decrees, and civil fines (sanctions with punitive effect but differing in formal status from traditional criminal penalties).
Note on scope and interpretation
The notes above reflect Sutherland’s 1944 analysis as presented in the American Sociological Review, focusing on the empirical patterns of enforcement and the theoretical question of whether white-collar offenses constitute crime in the same sense as other offenses.
The discussion remains a foundational prompt for debates on crime definitions, punishment, stigma, and policy design in corporate criminology.
Quick glossary
Treble damages: A civil damages rule awarding three times the actual damages to the plaintiff (3 \times D).
Stigma of crime: Social branding and public shame associated with criminal labels and conviction, which can have independent punitive effects beyond monetary penalties.
Consent decree: A court-ordered agreement that does not require an admission of guilt but imposes obligations to remedy violations, often used to avoid further litigation and public confrontation.
Key takeaways for exam answers
White-collar crime involves legal and social dimensions beyond the mere label of crime; enforcement design often minimizes stigma to ensure political and economic feasibility.
The four major laws under study provide penalties and enforcement mechanisms that demonstrate criminal-like behavior even when the formal criminal label is not always used.
Three explanatory factors (status of business people, trend away from punishment, and mores/public opinion) help explain why white-collar crimes experience differential treatment in the justice system.