Hypotheses on the causes of financial crime
| DOI | https://doi.org/10.1108/JFC-02-2019-0021 |
| Pages | 245-257 |
| Published date | 15 January 2020 |
| Date | 15 January 2020 |
| Author | Vincenzo Ruggiero |
| Subject Matter | Financial crime,Accounting & Finance,Financial risk/company failure |
Hypotheses on the causes
of financial crime
Vincenzo Ruggiero
Department of Criminology and Sociology, Middlesex University, London, UK
Abstract
Purpose –The purposeof this paper is to examine the aftermath of the 2006-07financial crisis and attempts
to identify a range of causes that were responsiblefor it and are likely to trigger similar events in the future.
The analytical tradition establishedby the study of white-collar crime provides the background for such an
examination,which avails itself of some conceptualisations derivedfrom classical economic thought.
Design/methodology/approach –Explanations of financial crimecan resort to general theories based
on allegedly universal values.They can posit the existence of criminaloids, namely, individualswho indulge
in illegal practices, or ‘honest fraud’, whilenot deeming themselves culpable. Anomie and control theory in
criminology have highlighted how the causes of financial crime are associated with general criminogenic
contextsor with individual propensities or mindsets. This paper addsto the existing perspectives a number of
variablesthat can provide a more nuanced picture of financial crimes.
Findings –This paper attemptsto identify a range of discrete variables that can be termed interstitialin the
sense that they can accompany a variety of theoretical hypotheses, locate themselves in the space left in
between the different approaches while providing supplementary analytical foci. Ignorance, entitlement,
reverse Keynesianism,recklessness, efficiency and the finance curse may offer additional angles from which
the causation of financialcrime can be observed. Sociological and criminologicalarguments, in this paper, are
interspersedwith notions derived from classical economics.
Originality/value –The originality of this contribution is to be found in its use of different theoretical
traditions,establishing a dialogue between socialtheory, criminology and economic thought.
Keywords Entitlement, Efficiency, Ignorance, Recklessness, Reverse Keynesianism
Paper type Conceptual paper
Before and after Sutherland
When discussing ‘the brigandage of the nobility’,Tarde (1902,2012) argued that criminal
careers could easily lead to business and politics and vice versa. His analysis of what we
now call the crimes of the powerful started with considerations around the notion of value.
In his view, this notion can be applied in three fields:that of truth, that of utility and that of
beauty (Latour and Lépinay, 2009). Political economy chooses to concentrate on utility,
making it the only field worthy of attention. It is political economy,in this way, that shapes
economic behaviour, and not the reverse. Moreover, if truth and beauty are sacrificed,
economic activity per se may veer towards falsehood and ugliness. For Tarde, financial
operators exemplify these negative qualities because they conceal feelings under
abstractions such as interest and revenues,making them measurable: the economic ‘science’
is thus equated to physics or chemistry. The financial sphere, therefore, belongs to
the passionate interests predominatingin the economic ‘science’, but how can such a science
claim that it is disinterested when it is entirely based on the defense of interests? The
financial world is where ‘prodigious ambitions of conquest’prevail and where billionaires
are inebriated with the hope of winning, with the pride of life and the thirst for power’
(Tarde, 1902, p. 24). Financialcriminals, in the analytical framework provided byTarde, are
perfect incarnations of homo economicus, namely, individuals with ‘nothinghuman in their
Causes of
financial crime
245
Journalof Financial Crime
Vol.27 No. 1, 2020
pp. 245-257
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-02-2019-0021
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
To continue reading
Request your trial