Skip to main content
Log in

The downsizing of America: A neglected dimension of the white collar crime problem

  • Published:
Crime, Law and Social Change Aims and scope Submit manuscript

Abstract

Downsizing has emerged as one of the noteworthy economic trends of the 1990's. This paper offers a preliminary exploration of the implications of corporate downsizing (real or perceived) for white collar crime. The following are among the issues considered: Can downsizing be defined, in a meaningful sense, as a crime against stakeholders (for the benefit of shareholders)? Is downsizing an alternative to the commission of illegal acts by corporations seeking to maximize profit and minimize loss, or an adjunct to such crime? Is the prospect of downsizing likely to inspire greater or lesser willingness on the part of corporate middle managers to engage in illegal acts on behalf of the corporation? Are motivations to commit crime against corporate employers — and opportunities to do so — intensified (or diminished) as a consequence of the prospect of downsizing? Does downsizing promote higher levels of engagement in white collar crime among corporate middle managers compelled to accept white collar jobs paying far less than positions lost due to downsizing? Finally, does downsizing and its prospect contribute to a broader social and cultural environment conducive to more white collar crime?

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  1. Sarah J. Freeman and K.S. Cameron, “Organizational Downsizing: A Convergence and Reorientation Framework,” Organization Science, 1993 (4), 10–29.

    Google Scholar 

  2. J.A. Simpson and E.S.C. Weiner, Editors, The Oxford English Dictionary. Second Edition (Oxford: Clarendon Press, 1989).

    Google Scholar 

  3. Clyde Haberman, “Help Wanted for Seniors.” The New York Times, 1996 (March 19).

  4. The passage of a Welfare “Reform” Bill in July, 1996, suggests that we are likely to witness massive downsizing — although this specific term may not be applied — of the welfare rolls in the years ahead (See Peter T. Kilborn and Sam Howe Verhovek, “Clinton's Welfare Shift Reflects New Democrat,” The New York Times, 1996 (August 23) A1). Many parties have already denounced this legislation as effectively a “criminal” act, in the humanistic sense; beyond the justly feared intense suffering likely to be experienced by children, the infirm, and many other vulnerable constituencies, the potential for large costs in terms of enhanced social instability, conflict, and the incidence of conventional crime is real.

  5. Robert J. Samuelson, The Good Life and Its Discontents — The American Dream in the Age of Entitlement, 1945–1995, (New York: Time Books, 1995).

    Google Scholar 

  6. See in particular Bennett Harrison and Barry Bluestone, The Great U-Turn: Corporate Restructuring and the Polarizing of America (New York: Basic, 1988), and New York Times, The Downsizing of America (New York: Times Books, 1996).

    Google Scholar 

  7. For discussion of some current trends pertaining to downsizing, and intensified anxieties within the current economy, see Alan A. Block, “American Corruption and the Decline of the Progressive Ethos,” Journal of Law & Society, 1996 (23), 18–35; John Cassidy, “All Worked Up,” The New Yorker. 1996 (April 22), 51–55; George J. Church, “Jobs in an Age of Insecurity,” Time, 1993 (November 22), 34–39; Frank Emspak, “Where Have All the Jobs Gone?” Chronicle of Higher Education, 1996 (April 5), B1; John Greenwald, “Why We're So Gloomy,” Time, 1992 (January 13), 34–40; John Tagliabue, “In Europe, A Wave of Lay-Offs Stuns White-Collar Workers,” New York Times, 1996 (June 20), A1; G. Pascal Zachary, “More Public Workers Lose Well-Paying Jobs as Outsourcing Grows,” The Wall Street Journal, 1996 (August 6), A1.

    Google Scholar 

  8. David Gordon, in Fat and Mean — The Corporate Squeeze of Working Americans and the Myth of Managerial Downsizing, New York: Martin Kessler Books, 1996, characterizes managerial downsizing as a “myth”. On the contrary: According to Gordon, the dramatic expansion of the managerial class has impacted negatively on job security and wages of ordinary workers.

    Google Scholar 

  9. For commentaries on baby boomer expectations, and the realities of the current job market for well-educated young people, see Landon Y. Jones, Great Expectations (New York: Ballantine Books, 1980), and Jon Nordheimer, “Young, Successful But Between Jobs”, The New York Times (November 7), C1.

    Google Scholar 

  10. See The New York Times, The Downsizing ..., 4. A study of the first half of 1996 found that job cuts jumped 28 percent (Reuters, “Study Says Job Cuts Rose 28% in First Half,” The New York Times 1996 (July 9), D18).

  11. The New York Times, The Downsizing ..., 5.

  12. For some documentation on this point see Donald L. Bartlett and James B. Steele, America: What Went Wrong? 1992, Kansas City: Andrews & McMeel; Donald L. Bartlett and James B. Steele, “How U.S. Policies are Costing America Jobs,” The Philadelphia Inquirer, 1996 (September 9), A1; Ward Morehouse and David Dembo, “Downsized Workers Recovered No Ground,” (Letter) The New York Times (October 20), A18.

    Google Scholar 

  13. See Zachary, op. cit.

  14. See Michael J. Mandel, “Is All This Angst Misplaced?” Business Week (March 11), 52, for one alternative interpretation of the job-related data.

  15. W.I. Thomas, “The Relation of Research to the Social Process,” In M. Janowitz, Editor, W.I. Thomas on Social Organization and Social Personality (Chicago: University of Chicago Press, 1931, 1966, 301).

    Google Scholar 

  16. George J. Church, “Jobs in an Age of Insecurity,” 1996 (November 22), 34–39.

  17. New York Times, The Downsizing ..., op. cit., 16–17.

  18. Ibid., passim.

  19. On this point, see Michael F. Smith, “Cultural Politics of Cooperation: An American Corporation and a Papuan Guinea Village,” Ethnology, 1995 (4), 191–199.

    Google Scholar 

  20. See Roderick M. Kramer and Tom Tyler, Trust in Organizations (Thousand Oaks, California: Sage, 1996).

    Google Scholar 

  21. On this theme, see Edgard Krau, “Disempowering and Downsizing Middle Management?” International Journal of Sociology and Social Policy, 1995 (15), 91–119.

    Google Scholar 

  22. The irony of trailing Republican candidates attacking corporations instead of communists, has been noted See Paddy Ireland, “Corporate Governance, Stakeholding, and the Company: Towards a Less Degenerate Capitalism?” Journal of Law and Society, 1996 (23), 318, n. 76.

    Google Scholar 

  23. D.E. Rosenbaum and Steve Lohr, “With a Stable Economy Clinton Hopes for Credit.” The New York Times, 1996 (August 13), A1.

  24. For some data on the increasing economic inequality, see Thomas B. Edsall “The Return of Inequality,” The Atlantic Monthly, 1988 (June), 86–94, and Steven A. Holmes, “Income Disparity Between Poorest and Richest Rises.” The New York Times, 1996 (June 20), A1. Some headlines from clippings in my files, since 1992: “However You Slice the Data the Richest did get Richer”; “The Rich get Richer, but Never the Same Way Twice”; “Income Data Show Years of Erosion for U.S. Workers”; “Ranks of U.S. Poor Reach 35.7 Million, the Most Since '64”; “The Rise of the Losing Class”; “Gap in Wealth in U.S. called Widest in West”; “America's Opportunity Gap”; “American Inequality: Its History and Scary Future”; “Income Disparity Between Poorest and Richest Rises.”

  25. James Medoff and Andrew Harless, The Indebted Society — Anatomy of an Ongoing Dusaster (Boston: Little, Brown & Company, 1996).

    Google Scholar 

  26. Adolph Berle and G.C. Means, The Modern Corporation and Private Property (New York: Commerce Clearing House, 1932).

    Google Scholar 

  27. On this thesis, see Mary Zey and Brande Camp, “The Transformation from Multidivisional Form to Corporate Groups of Subsidiaries in the 1980s: Capital Crisis Theory,” The Sociological Quarterly, 1996 (37), 327–351.

    Google Scholar 

  28. Mary Zey and Brande Camp, “The Transformation from Multidivisional Form to Corporate Groups of Subsidiaries in the 1980s: Capital Crisis Theory,” The Sociological Quarterly, 1996 (37), 327–351.

    Google Scholar 

  29. On this thesis generally see Otomar J. Bartos, “Postmodernism, Postindustrialism, and the Future,” The Sociological Quarterly, 1996 (37), 307–325; Carl Keane, “Loosely Coupled Systems and Unlawful Behavior: Organization Theory and Corporate Crime,” In Frank Pearce and Laureen Snider, Editors, Corporate Crime: Contemporary Debates (Toronto: University of Toronto Press, 1995), 168–180; Steve Tombs, “Corporate Crime and New Organizational Forms,” in Pearce and Snider, op. cit., 132–146. But as Bartos (1996) notes, there have been some contradictory tendencies, with at least some organizations growing larger, some jobs becoming more simplified, and some markets becoming more global.

    Google Scholar 

  30. William Bridges, “The End of the Job,” Fortune, 1994 (September 19) 62, 64, 68, 72, 74.

  31. See Ireland, op. cit.

  32. Ibid., 307.

  33. The classic statements on this thesis are Herman Schwendinger and Julia Schwendinger, “Defenders of Order or Guardians of Human Rights?” Issues in Criminology, 1970 (5), 123–157, and Herman Schwendinger and Julia Schwendinger, “Social Class and the Definition of Crime,” Crime and Social Justice, 1977 (7), 4–13. See also Robert M. Bohm, “Social Relationships that Arguably should be Criminal Although They Are Not: On the Political Economy of Crime,” In Kenneth D. Tunnell, Editor, Political Crime in Contemporary America: A Critical Approach (New York: Garland Publishing Co., 1993), 3–38. In a parallel vein, corporate downsizing may be regarded as at odds with a particular set of moral principles. When a reporter for The National Catholic Reporter wrote an article criticizing specific corporate decision-makers who implemented such downsizing, on the grounds that as Catholics they were guilty of “moral blindness” involving violations of Catholic social teaching, the newsweekly was sued for libel and invasion of privacy (See Timothy D. Schellhardt, “Are Layoffs Moral? One Firm's Answer: You Ask, We'll Sue.” The Wall Street Journal, 1996 (August 1) 1.).

    Google Scholar 

  34. Michael J. Lynch, W. Byron Groves and Alan Lizotte, “The Rate of Surplus Value and Crime: A Theoretical and Empirical Examination of Marxian Economic Theory and Criminology,” Crime, Law & Social Change, 1994 (21), 15–48.

    Google Scholar 

  35. Gordon, op. cit.

  36. E.g., see New York Times, op. cit.

  37. See Steve Lohr, “Amid Layoffs and the Recession, Executive's Pay is Under Scrutiny,” The New York Times, 1992 (January 20), A1, and Louis Uchitelle, “1995 Was Good for Companies, and Better for a Lot of C.E.O.s,” The New York Times, 1996 (March 28), A1.

  38. David Noer, “Employee Relations — 1996: The Therapeutic Approach,” Harper's Magazine, 1996 (May), 39.

  39. E.g., see New York Times, op. cit., 23.

  40. Edward Luttwak, “Symposium Remarks: Does America Still Work?” Harper's Magazine, 1996 (May), 35–47.

  41. Ibid., 46.

  42. E.g., on this thesis, see Michael C. Jensen and Perry Fagan, “Capitalism Isn't Broken,” The Wall Street Journal, 1996 (March 29), A10; Steven Rattner, “Downsizing the Downsizing Crisis,” The New York Times, 1996 (October 16), A17; Mortimer Zuckerman, “Creators of the 21st Century,” U.S. News and World Report, 1996 (July 1), 64.

  43. On this thesis see Susan S. DiMattia, “Downsizing: The Next Generation,” Library Journal, 1996 (March 15), 36–40; Alan Downs, Corporate Executions (New York: American Management Association, 1995); Roger Heller, “Downsizing's Other Down Side,” Management Today, 1996 (March), 23; Alex Markels and Matt Murray, “Slashed and Burned,” The Wall Street Journal, 1996 (May 14), A1; Martha H. Peak, “All Pain, No Gain,” Management Review, 1996 (85): 1; Louis Uchitelle, “Layoffs are Out; Hiring is Back,” The New York Times, 1996 (June 18), D1.

  44. David O. Friedrichs, Trusted Criminals: White Collar Crime in Contemporary Society (Belmont, CA: ITP/Wadsworth Publishing Co., 1996).

    Google Scholar 

  45. David O. Friedrichs, Trusted Criminals: White Collar Crime in Contemporary Society (Belmont, CA: ITP/Wadsworth Publishing Co., 1996). 222–223.

    Google Scholar 

  46. Keane, op. cit., 173. Friedrichs, op. cit., 9.

  47. New York Times, op. cit.

  48. David O. Friedrichs, Trusted Criminals: White Collar Crime in Contemporary Society (Belmont, CA: ITP/Wadsworth Publishing Co., 1996). 118–120.

    Google Scholar 

  49. Georg Rusche, “Labor Market and Penal Sanctions: Thoughts on the Sociology of Criminal Justice,” Translated by G. Dinwiddle, Crime and Social Justice, 1933/1978 (10), 2–8.

    Google Scholar 

  50. David Barlow, Melissa Hickman Barlow, and W. Wesley Johnson, “The Political Economy of Criminal Justice Policy: A Times-Series Analysis of Economic Conditions, Crime, and Federal Criminal Justice Legislation, 1948–1987,” Justice Quarterly, 1996 (13), 223–241.

    Google Scholar 

  51. David Vogel, Fluctuating Fortunes (New York: Basic, 1989).

    Google Scholar 

  52. New York Times, op. cit., 225.

  53. David O. Friedrichs, Trusted Criminals: White Collar Crime in Contemporary Society (Belmont, CA: ITP/Wadsworth Publishing Co., 1996). 36–47.

    Google Scholar 

  54. Diane Vaughan, Controlling Unlawful Corporate Behavior. (Chicago: University of Chicago Press, 1983).

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Rights and permissions

Reprints and permissions

About this article

Cite this article

Friedrichs, D.O. The downsizing of America: A neglected dimension of the white collar crime problem. Crime Law Soc Change 26, 351–366 (1996). https://doi.org/10.1007/BF00138901

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF00138901

Keywords

Navigation