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Corporate Crime - Is There Such a Thing?

I have trouble with the concept of corporations commiting crimes, and with the idea that we can punish a corporate entity. I think only individual humans can commit a crime, and therefore only individual humans should be punished. How do you "punish" an organization anyhow? The idea is flawed.

When we punish a human for behavior that is criminal he might learn not to repeat it. But is it the same with a corporation? Not at all. In fact, when we fine companies for dumping waste illegally or for falsifying their accounting, we often just encourage such behavior. Yes, I am suggesting that punitive fines and judgments for corporate crime make matters worse.

How could punitive action against corporations make them more likely to commit crimes? Because with fines we make a real crime into a simple business calculation. Once we have done that, it's all about the numbers. For example, if a company can save a million dollars annually dumping waste illegally, and the fines they pay are typically a few hundred thousand dollars each year, the numbers work, and the practice will continue.

Is there a better way to stop criminal activities that originate from within corporations? I think there is, and it is a simple idea: Prosecute the actual criminals and put them in jail. Companies don't commit crimes--people do. Those individuals who made the decision to commit a crime or knowingly went along with the crime should be put in jail. Do this and corporations will stop doing so many illegal things.

Of course it makes sense to fine a company or sue it for recovery of actual damages caused. If someone's water supply is tainted by a corporate decision to dump toxic wastes, by all means make them compensate the victim. But skip the punitive part. Just punish the decision makers. There really isn't such a thing as corporate crime after all--only humans commit crimes.

The whole issue of corporate crime can get more complicated than my few paragraphs suggest. But my intention was only to get readers thinking in new and more productive ways. With that in mind, here are a few questions to ponder:

1. Is it fair to make anonymous shareholders pay punitive damages for crimes committed without their knowledge?

2. Is it possible that the whole structure of corporations as legal entities could be changed in some fundamental and useful way?

3. Is it ever accurate to say that a "company" committed a crime?

If you find this topic interesting you might want to read our page on corporate welfare as well.

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Corporate Crime