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EXTENT AND COST OF CORPORATE CRIME

In the United States, corporate crime did not exist before the late nineteenth century (Croall, 2010). The reason for this is simply that there were no laws against dangerous or unethical corporate practices. Before the late nineteenth century, corporations were free to sell unsafe products, to keep workers in unsafe conditions, to pollute the atmosphere, to engage in monopolistic practices, to overcharge customers, and to make outrageously false advertising claims for their products. By the end of the nineteenth century and the beginning of the twentieth century, increasingly laws were passed that attempted to regulate some of the more flagrant business practices that prevailed at the time. Examples are the Sherman Antitrust Act (1890) and the Pure Food and Drug Act (1906). Since that time, a vast array of laws has been passed to regulate the various facets of potentially harmful corporate activities.

The extensive nature of corporate crime is unquestioned today, as revealed by many government investigations and much news media coverage (Payne, 2017). An early study of the 582 largest publicly owned corporations in the United States found that over 60% had at least one enforcement action completed against them in 1975 and 1976 (U.S. Department of Justice, 1979). The number of actions initiated against these corporations for illegal activities (such as price-fixing, foreign payoffs, illegal political contributions, and manufacture of unsafe foods and drugs) average 4.2 actions per corporation.

Corporate crime continues apace and costs consumers up to some $231 billion annually (Economist, 2009), including more than $65 billion lost to price-fixing (Simon, 2008).

These figures are much higher than the estimated annual loss, $16 billion to $18 billion, from conventional property crime (burglary, larceny, motor vehicle theft) (Federal Bureau of Investigation, 2016).

Undoubtedly, corporate crimes impose an enormous financial burden on society. In addition, it has been estimated that, each year, 200,000 to 500,000 workers are needlessly exposed to toxic agents such as radioactive materials and poisonous chemicals because of corporate failure to obey safety laws. Nearly half of all deaths among asbestos insulation workers are directly caused by exposure to that substance (Coleman, 2006). Many of the 2.5 million temporary and 250,000 permanent worker disabilities from industrial accidents each year stem from violations of accepted safety standards (Geis, 1978). Corporate crimes cause injuries to people on a larger scale than so-called street crimes. Far more people are killed annually through corporate criminal activities than by the 15,000 or so individual criminal homicides.

 
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