Why They Do It
Book

Why They Do It

Inside the Mind of the White-Collar Criminal

Public Affairs, 2016 more...

Editorial Rating

9

Qualities

  • Comprehensive
  • Eye Opening
  • Concrete Examples

Recommendation

Financial fraud in the United States costs nearly $400 billion annually. The executives responsible for this corporate duplicity usually earn excellent salaries. So why do they become criminals? Harvard Business School professor Eugene Soltes shares his findings after years of extensive research. His numerous case histories make for fascinating reading. He speaks almost exclusively about men so don’t look for gender-neutral pronouns. As Soltes explains, “Women are conspicuously absent from the ranks of prominent white-collar criminals.” getAbstract recommends his compelling study to business students and professors, executives, business pundits, financial law enforcement officials and anyone who handles the money.

Summary

Public Disgrace

In 1639, a court in Great Britain’s North American colonies fined merchant Robert Keayne £200, about $42,228 in 2016 dollars. The Bostonian’s crime was selling thread, buttons and nails at jacked-up prices that earned him 50% to 100% profits. Today, firms like Apple routinely earn such profits. But in the 17th century, earning that much profit by hiking up the prices on household items was seen as the morally unsound crime of “oppression.”  

In addition to his heavy fine and court censure, Keayne became the target of opprobrium by his local church. Keayne’s shaming lasted the rest of his life. Community attitudes about business malfeasance at that time stand in stark contrast to modern attitudes about white-collar crime.

In 1927, General Electric chairman Owen Young delivered a speech to dedicate the opening of Harvard Business School. He described what happened to fraudulent businesspeople in the early days in New England. Anyone who broke the law, violated church tenets or flouted the conventions of ethical business was publically named and shamed. A town or city would bring its moral and legal force against any transgressor...

About the Author

Eugene Soltes is the Jakurski Family Associate Professor of Business Administration at Harvard Business School. The Wall Street JournalFinancial TimesEconomist, USA Today and Bloomberg News have cited his research on corporate malfeasance.


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